Transnational Mgt. Case Analysis

Problem Statement

McKinsey & Company is a highly successful consulting firm worth over 1.8 billion dollars. However, its leader Rajat Gupta wondered if the company could better utilize the knowledge of its employees to better serve its worldwide clients. It was obvious that McKinsey

& Company had a strong base of core competencies among its employees, but Gupta was unsure if knowledge development was meeting its clients' needs in an information and knowledge

driven age. Clients hired McKinsey & Company expecting leading edge information from to

assist them in their decision-making processes. Gupta felt a process was needed to develop,

capture, and leverage this information which he considered an asset to the company. So,

the task lay before them on how to accumulate and store the information quickly and make it

readily available to consultants on a global scale.

List of Symptoms

* McKinsey & Company desired to provide state-of-the-art knowledge to its clients but

currently had no means of measuring exactly how well they were doing in developing their knowledge.

* Employees were not being properly developed for the new direction of the McKinsey & Company. McKinsey & Company still had the ability to provide excellent advice to its Clients. However, they were not as prepared as their competitors for dealing with the upcoming technologies of the future.

* McKinsey & Company had experienced rapid growth. McKinsey & Company had 3,800

consultants in 69 offices worldwide. In its present state, the large number of employees

and offices it managed actually hindered McKinsey from effectively performing its

operations worldwide. Essentially, McKinsey & Company had become too large for itself under its current architecture.

Alternative Solutions

McKinsey & Company did not desire to rest on its laurels and remain content with the

status quo, rather they aggressively sought out to find answers to their dilemmas. They

realized that being a 1.8 billion dollar company did not come easily and also that without

modifications they would not remain in their top position in consulting.

* (1) McKinsey & Company must implement a system of knowledge management in which

the entire organization is able to benefit from the sharing of knowledge between employees.

This will allow the company to benefit internally.

Alternative Solution One: (2) In order to measure the results McKinsey & Company must revisit their goals to develop, capture, and leverage their knowledge to better serve their clients.

Alternative Solution Two: Know the audience to be measured and what benefits they seek from their relationship with McKinsey & Company.

Alternative Solution Three: Define exactly what is to be measured and the approaches that will be used. All measurements must be valid, actionable and reliable.

Alternative Solution Four: Decide what data will be collected and how it will be collected. Focus on the most pertinent information.

Alternative Solution Five: Refer back to the original goals and the audience in the

presentation of the results.

Alternative Solution Six: Monitor and evaluate how the measures are working.

Using the steps mentioned above will provide quantitative results for measurement.

* McKinsey & Company must implement procedures that modify their hiring practices.

McKinsey & Company currently hires employees who have specialized skills. Their hires excel

in their specific area of expertise. However, they know little about areas outside their areas of

specialization. This does not add value to McKinsey & Company nor does it ready the company

for change. The goal is for McKinsey & Company to be prepared for imminent changes in an

information and knowledge-driven age. McKinsey must hire multi-faceted employees who will

increase the value of the company through their additional competencies while allowing

McKinsey to respond to the marketplace before its competition does. McKinsey & Company

must actively seek employees who not only display the current competencies McKinsey

currently desires, but they must also actively seek out employees who are also fundamentally

sound in the various technologies. The hiring of multi-faceted employees will allow McKinsey

to better grasp changes and will also maintain their competitive advantage as their employees are

better prepared to observe and implement changes.

* Executives must implement structural change through the managers at McKinsey &

Company. (Bartlett, Pg.346) Managers must be reoriented to reshape the decision-making

systems that are now centralized. The hub must remain centralized and the sub units both locally

and globally must be decentralized. This will allow for more on the spot decision-making and

less dependence upon the hub, which slows down the entire operation. McKinsey must develop

a transnational mindset.

Advantages of each Alternative

Alternative