Question
Section B – BOTH questions are compulsory and MUST be attempted
2 Company information
Clonyard is a private company which sells shoes to adults and children. Clonyard has several retail shops. The mission of Clonyard is ‘to satisfy customers by providing footwear（鞋类） of excellent quality for the modern world.’ Clonyard has built its reputation on providing footwear to those who have specialist needs in footwear, such as minor medical issues, and Clonyard’s staff excel at（擅长） spending time with customers to determine customers’ correct requirements. Clonyard has achieved modest（不太大的） growth over the past five years.
Twelve months ago, Clonyard was the subject of a successful but hostile（恶意的） take-over bid by Elrig, a listed company. Elrig’s mission is ‘to return value consistently to our shareholders by growing our market share and by offering unrivalled（无可匹敌的） value for money for our customers.’

Elrig’s primary motivation for the takeover was to enhance its market share（市占率） by acquiring a niche operator. In addition, Elrig’s directors also believe that there is likely to be consolidation in the industry in the near future and the purchase of Clonyard by Elrig is a reaction to that belief. Having acquired Clonyard, Elrig is keen to retain（保留） the Clonyard brand and is also keen to ensure that all aspects of Clonyard’s business operations（运营） are integrated into（整合） those of Elrig.

Current situation
Elrig has taken a decision at board level（董事会上） that a similar range of inventory（产品统一起来） is maintained throughout all Elrig and Clonyard shops. Managers of Clonyard’s individual shops（单店们） are unhappy with this as this is contrary to the individual specialisms which shop managers were encouraged to develop previously. As a result, several managers have left the business.
In order to help with the integration of Clonyard into Elrig’s business, Elrig has ensured that each Clonyard shop will have at least one of Elrig’s employees working there. Clonyard’s staff have complained that the Elrig members of staff are more focused on ensuring a sale is made（只顾销售） than spending the required time with customers. Clonyard staff have also expressed concern（担忧） about the lack of technical product knowledge of Elrig’s staff.

Elrig has retained most of Clonyard’s directors. These directors have found it challenging to adjust to Elrig’s focus on pursuing market share and recently said, ‘It’s as though they don’t measure anything else. Every report we get is about
market share and the message is always that we need more of it, as quickly as possible.’（考核太狭隘，只盯着市占率）
The chief executive officer （CEO） of Elrig was recently told by a management consultant that Elrig should consider using the McKinsey 7S model （Appendix 1） to help with the integration of Clonyard into Elrig’s operation. The management
consultant indicated that she felt that Elrig should only focus on the four soft elements in this model for now.

Introduction of an ERPS
Elrig and Clonyard are currently utilising different computer systems. It is therefore difficult for staff at all levels of Elrig’s operations to obtain access to Clonyard’s performance data. The board of Elrig has complained that any information it receives on Clonyard’s operations or performance is too late to enable the board to make decisions. （各种问题）
The director of operations for the group, for example, has indicated that she does not see any reports on inventory levels at each Clonyard shop until at least three months into the financial year. She has also indicated that Clonyard shops appear to wait too long for goods to be delivered to them from their suppliers.（各种问题）
The group sales director indicated that the data he receives on Clonyard’s monthly financial performance is at least three weeks late. This offers no opportunity to introduce discounted products at an appropriate time, which is a very common sales approach for Elrig.（还是问题）

Elrig’s employees in general have expressed concern that Clonyard’s computerised information systems are outdated and that Clonyard’s employees do not use the computer system as much as they should. For example, it was reported that it is common practice for a Clonyard employee to place an order for inventory over the telephone and not enter the order onto the computer system until after the order has been delivered.（依然是问题）
The board of Elrig has decided that it needs real time access to Elrig’s overall business operations, including Clonyard, and is considering the purchase of an enterprise resource planning system （ERPS）. Further, a director of Elrig has
indicated: ‘the use of a shared up-to-date information system such as an ERPS will ensure that the Clonyard operation is completely integrated within the Elrig one. The Clonyard employees will also be delighted with the brand new system.’（看看ERPS能否解决上述问题）

Required:
It is now 1 September 20X5.
（a） Using the soft elements of the McKinsey 7S model, evaluate whether Elrig is properly aligned with Clonyard. （15 marks）
（b） Evaluate the introduction of an ERPS into Elrig’s overall business, including Clonyard. （10 marks）
（25 marks）
Appendix 1

Mind set

Answer
2
（a）
Skills
With regard to the skills element, it is clear that Clonyard and Elrig train and develop their staff in different ways. Clonyard has placed an emphasis on detailed product knowledge and on ensuring that the individual’s needs are met. Such training
and development is very much aligned with a company that has a specialist niche. （Skills和Strategy）
It is also clear that Elrig’s focus is less on meeting individual requirements than in pursuing a sale and it is likely that Elrig’s staff have been trained and developed more in terms of sales techniques than with regard to product knowledge. This means that the staff from Clonyard have a different skill set and it is clear, from their reaction to the Elrig staff working in Clonyard shops that no attempt has been made to develop the skill set of either group of employees in order to align them with（匹配） each other.（要结合案例背景去说）

Staff
It is clear, especially given the point above, that staff are treated in a different way in both organisations. It is also evident from the scenario that Clonyard staff are leaving the organisation. It is likely that staff have been given responsibility for inventory and shop management in Clonyard and that the focus in the company has been on developing the individual to enhance their range of specialist knowledge.（Staff 和Structure）
Elrig’s singular focus on market share would suggest that Elrig’s staff are more likely to be trained and developed in the areas of financial performance measures and be aware of costs, margins and the financial implications of the decisions being made. Indeed, the fact that Elrig’s staff are seeking to make a sale quickly suggests that they are aware of the cost of the time they spend with each customer and it is likely that there is an ideal time per sale that they will work towards.（Staff和Strategy）

Style
Style usually represents the corporate culture of the organisation and it is clear that the cultures are very different within Elrig and Clonyard. The issue of the takeover being hostile in the first instance is perhaps an indicator that the styles of the organisations are very different.
Style is also indicative of how an organisation presents itself to the outside world and again it is clear, through the interactions with customers, which Clonyard would seek to satisfy the customer’s specific requirements whereas Elrig would try to sell a product to the customer with the minimum time spent on the transaction. （叙述清楚Style，结合案例）
Such a contrast（对立） in styles would inevitably be reflected in the customer experience and it may prove to be very damaging for Clonyard if its style is aligned with that of Elrig. Customers may feel that there is no longer any reason to visit Elrig if its main differentiators of individual service, product specialism and time spent with the customer are removed.

Shared values
All of the above elements illustrate that the companies have very different values. The element of shared values should reflect the guiding beliefs of people in the organisation as to why it exists and it is clear in Elrig and Clonyard, even at the level of their mission statements, which they exist for quite different reasons. It is clear that the attitudes and behaviours which reflect these differing strategic approaches are reflected in the differing shared values of the staff in the scenario.（陈述一个道理）
Elrig, for example, expects that it should be able to impose its own business model upon a very different type of business. This is because its underlying objective is that its business only exists to return as much value for shareholders as possible and that the people in the organisation should all be focused on making that happen. There should be no reason, in terms of Elrig’s values and beliefs, as to why this structure should not be accepted in Clonyard.（Elrig的values）
Clonyard’s values are very different to this, however, and rely on individuals taking responsibility, and making decisions accordingly; to pursue things which they feel would benefit both the customer experience and Clonyard. Clonyard’s lack of pursuit of shareholder value in its mission is reflected in it achieving modest growth, which has most likely ensured that most stakeholders in the organisation have been satisfied. （Clonyard的values）

Each company does appear to have shared values within its own organisation – for example, staff in both Elrig and Clonyard appear to have a set of shared values for the organisation they work for. This makes the alignment of values for the new
organisation very difficult. From the scenario, Elrig does not appear to have tried to do anything to help in this regard（在这方面）.
Conclusion
In conclusion, it is clear that there is overlap and interconnectivity between each soft element of the 7S model. Elrig appears to have made no attempt to align these differing elements and as a result there is no sense of shared values, different styles of operation and different skill sets in the respective staff.
The 7S model has been useful in addressing this lack of alignment and provides evidence to Elrig that it must revert to the mission of Clonyard and decide if this now needs to change in the light of the takeover. If not, and as the 7S model has shown, Elrig might be best advised to allow Clonyard to operate as it was doing quite successfully beforehand and consider integration and alignment as a long-term rather than a short-term goal.（model的作用）

（b）
Advantages
An ERPS would help alleviate（减轻） the problems detailed with regard to inventory control in that the current inventory levels would be very clear on the ERPS and any sale would register immediately, thereby showing the effect on the inventory overall.
Minimum inventory levels may be set within the ERPS and an order to the supplier automatically triggered（触发） when inventory reaches that level.
An ERPS will also allow details of the delivery to be tracked（跟踪） and the ERPS will enable staff at the appropriate level to discover how long deliveries are taking and to manage the supplier relationship accordingly.
The discounting of product lines in certain areas is clearly a key part of Elrig’s strategy to enhance its market share and the sales manager is correct in that it is impossible to impose this strategy on Clonyard with such old data. An ERPS would ensure that the sales manager has access to immediate（实时的） sales of each product and could compare this with both planned sales of the product and past sales of the product.

The ERPS may also permit the inclusion of some external data which could inform the company of any changes in the market for particular products or distinct product lines. This would certainly enable the sales manager to take real time decisions with regard to which products might be discounted and to what level. The ERPS would be of great benefit to him in this endeavour（这一努力）.
The ERPS, as highlighted above, has the ability to remove the responsibility for the ordering of inventory from the employee and undertake this function based on the minimum inventory levels that have been input. This would certainly solve the problem of Clonyard employees not entering the purchase order into the computer system and would ensure that the relevant people in the organisation are fully aware of the inventory both on order and in store.

Disadvantages
However, the view of the director of Elrig appears to be that he can use the introduction of an ERPS to impose Elrig’s strategy on Clonyard and this is something which should be avoided. The strategies of the two companies should be aligned initially and any shared computer system, and the information that it might generate, should be agreed thereafter.（不匹配就可能不利）
There are other significant potential negative effects of introducing the ERPS based on the director’s view. For example, it may further enhance the feeling of alienation（疏远） that many Clonyard employees appear to be feeling if another system is imposed on them without discussion and agreement. Their motivation would suffer and Clonyard’s ability to maintain its position in the market may be affected. This market position is, after all, the main reason for Elrig’s purchase of Clonyard in the first place.
There is evidence from the scenario that Clonyard is delaying the information that it offers Elrig as even manual systems could offer more up-to-date data than that detailed by the operations manager and the sales manager. This sub-optimal behaviour has perhaps been a reaction by Clonyard staff to the imposition of Elrig’s systems.

Much as the removal of any sub-optimal behaviour should be encouraged, the introduction of the ERPS without discussion and agreement may enhance those feelings of Elrig imposing its operations upon Clonyard. This stresses again the dangers of introducing a computer system to integrate one company’s operations into another and further highlights the need to come to a common approach with regard to the future strategic direction of Clonyard.（结合题目背景，合理演绎）
It is also naive（想当然） of the Elrig director to assume that Clonyard employees will be enthusiastic（热情的） about the introduction of a new computer system. Aside from the potential negative aspects associated with control that are highlighted above, there is evidence from the scenario that Clonyard employees are not engaging fully with their own computer system. This may be because they have not been properly trained and the prospect of the introduction of a new and much more complex system may be very threatening for them.

Alongside the difficulties associated with the introduction of the ERPS into the Elrig/Clonyard operation, an ERPS has other well-established and more generic disadvantages such as its cost, its difficulty in adapting to the specifics of some individual business operations and the time taken to implement the system.
Overall, the introduction of an ERPS would certainly help with regard to some operational aspects detailed in the scenario. The overall benefits are likely to be much wider than this with, for example, the access to real-time information being very useful to Elrig/Clonyard in their current environment. However, the introduction of the ERPS should not be used as a way of integrating Clonyard within Elrig’s operation. This needs to be done at a much more fundamental level where strategic direction is agreed. （总结下，一般都要结构上有这个部分）
Using an ERPS to integrate without this agreement first is likely to lead to more problems with regard to integration than it will solve.