Critical Case Study: Using the McKinsey 7S Framework

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 Critical Case Study: Using the McKinsey 7S Framework
Introduction
Effective management of human resources is crucial for attaining the success of any

organisation, especially in public sector institutions responsible for ensuring economic stability

and regulatory excellence. The paper aims to explore the human resource management dynamics

of the Saudi Central Bank (SAMA) by utilising the McKinsey 7S framework. The evaluation

seeks to explain how the Saudi Central Bank's human resource management strategies,

organisational structure, and cultural values contribute to its general performance and approach

to organisational behaviour. The paper shall evaluate the Saudi Central Bank's alignment of

human resource management practices with its mission to ensure monetary stability and

regulation of the financial sector, emphasising its critical role in ensuring Saudi Arabia's

economic reforms and visions.

The Bank's mission is to foster financial and monetary stability and support unending

economic growth in the Kingdom of Saudi Arabia through efficient supervision and regulation of

the financial sector, ascertaining the resilience and soundness of financial institutions.

Additionally, the bank's vision is to be a leading bank worldwide in contributing to financial

stability and economic success, which is in line with the Kingdom's vision 2030 to promote a

sturdy and creative financial environment (Alsayari & Saudi Central Bank, 2022). The bank

plays a crucial role in advising the government concerning money, banking, and financial affairs

and acts as the government's bank. Additionally, it plays a role in controlling and issuing Saudi

national currency, managing monetary storage, creating and executing monetary policy, and

stabilising the Saudi currency's internal and external value.

exchange. The SAMA controls and operates payment systems. It also issues directives and

controls links to other financial institutions. The bank manages and provides oversight to

financial institutions, credit data providers, payment systems, and services. The banks create,

develop, and operate fintech platforms. The bank puts the procedures required to stop money

laundering, puts proper processes in place, and ensures protection against financial institutions

linked crimes (Alsayari & Saudi Central Bank, 2022). Finally, the bank serves as a representative

in regional and international organisations and protects consumers from financial institutions.

The evaluation will clarify the organisation's workforce management strengths and

weaknesses by looking at how the seven aspects of the McKinsey 7S framework, comprising of

strategy, structure, systems, shared values, style, and skills, are incorporated. The paper will

follow the following structure: a brief introduction, application of the McKinsey 7S framework,

critical analysis, recommendation, and a personal reflection of the insights obtained from the

study and their effects on management practices and individual leadership. The systematic

approach ascertains an exhaustive assessment of the Saudi Central Bank's organisational

structure and human resource management, generating valuable data for the real-world and

academic applications.

Application of the McKinsey 7S Framework

an ordinary model for all regulatory organisations. A central decision-making process, specific

roles and duties, and clearly defined authority lines are features linked to the structure (Alsayari

& Saudi Central Bank, 2022). The SAMA is capable of effectively overseeing and regulating the
financial industry in Saudi Arabia, guaranteeing tight oversight over its operations. It ensures

standards of compliance with the utilisation of the system.

The governor serves as the head of the SAMA. The governor serves as the board chair,

executes policies, represents the bank internationally and within the country, and conducts

associations with the government and the Minister for Finance (Yousef & Ghafar, 2023). The

vice governor assists the governor, who serves as the Deputy Chairman of the Bank's Board of

Directors. Immediately below the governor comprises the vice governor for supervision and

technology, the assistant governor for monetary affairs, and the assistant governor for executive

affairs. According to Ramady (2021) the vice governor for supervision and technology is crucial

in providing oversight and advancing regulatory, superintendence, and technological functions.

The Assistant Governor for Monetary Affairs at the SAMA plays a pivotal role in shaping and

executing the monetary policy framework of Saudi Arabia. The Assistant Governor for

Executive Affairs at the SAMA manages and oversees the bank's administrative, operational, and

deliberated support functions.

practices. Positively, it fosters authority and clarity of communication, ascertaining that staff

know their responsibilities and whom to send in their reports. Within the regulatory setting,

where agreement to standards is critical, this clarity ensures accountability, order, and continuity.

Nonetheless, the hierarchical organisation brings forth various challenges. Challenges

comprising multiple levels of approval may be needed for decisions to be made, which can slow

the execution of programs and mitigate responsiveness to changing market structures or

personnel needs. The centrally managed nature of decision-making can hinder flexibility in the

human resource process, comprising training, management, and recruitment.

According to Maurer et al. (2023) human resources, the hierarchical structure demands an

extreme emphasis on developing leadership and open communication to bridge the gap between

management and staff. The restrictions can be mitigated while preserving the advantages of a
structured organisational model by executing strategies to encourage staff members within the

overall structure, such as delegation of structure, organisation of feedback systems, and

engagement of employee programs.

Strategy: The SAMA has introduced the Open Banking program, part of the National

Fintech Strategy, aiming to make Saudi Arabia a worldwide fintech hub. The strategy comprises

an Open Banking Lab, which performs technical testing on banks and fintech companies to

create, evaluate, and certify open banking services. The Financial Sector Development Program

(FSDP) under Saudi Arabia’s Vision 2030 will play an integral role through open banking as it

seeks to transform the financial services sector from its conventional system based on banking

secrecy and brick & mortar to one infused with the latest technological advance. According to

Khard (2024), the program aims to support financial institutions, develop a robust capital market

and also assist financial planning. The initiative aims to boost financial inclusivity and bring up

new chances for digital monetary administrations. Open banking technologies play a role in the

overall Kingdom object of digital transformation (per the Vision 2030), by seamlessly and

swiftly offering more accessible and efficient financial services to consumers (Alsayari & Saudi

Central Bank, 2022). The strategy is in line with Vision 2030 targets of diversifying the economy

by using technology to enhance access and efficiency to the financial services. The Council of

Ministers approved the bank's strategy in 2022, intending to make the Kingdom a global fintech

hub to promote the economic empowerment of people and society.

The Open Banking program and the correlation with the human resource management

strategy closely align with the Saudi Central Bank's organisational objectives. One of the main

pillars of the vision 2030 is diversification of the economy, which Open Banking fosters by

making new financial services and products available. Lastly, the SAMA ensures regulatory
excellence that employees hold and the knowledge and skills to execute Open Banking soundly,

guaranteeing stability while acknowledging creativity.

Systems: To ascertain that its employees are highly skilled, involved, and aligned with its

precedent objectives, the SAMA has set up solid human resource systems and processes.

Moreover, to foster creativity and support Saudi Vision 2030, these instruments help the Saudi

Central Bank control and consolidate the financial sector. SAMA recruits highly skilled and

competitive employment processes to attract world-class talent from international and domestic

markets. In line with Vision 2030, the SAMA prioritises recruiting the country's citizens to

reinforce the country's workforce and contribute to the Kingdom's employment objectives

(Alotaibi & Campbell, 2022). The SAMA employs targeted talent recruitment to support

strategic programs such as Open Banking, particularly fintech, cybersecurity, and data analysis.

Additionally, the bank continues to provide its employees with training opportunities and

continuous learning to maintain a highly-skilled, competent workforce. The SAMA delivers

workshops and training sessions focusing on various important aspects such as financial

technologies and leadership development. Moreover, the institution uses transparent and

structured management systems to guarantee accountability and success. Employees are assessed

based on clear key performance indicators that align with particular goals within the

organisation's aims. The institution has provided feedback mechanisms to foster continuous

improvement and professional development. The highly performing employees are awarded and

recognised to ensure that employees are motivated and top talents are retained.

Furthermore, the SAMA recognises the significance of engaging its employees in driving

productivity and organisational success. It is achieved by conducting regular surveys to evaluate

employee fulfillment, identify areas for improvement, and guarantee employees are listened to.
The bank supports its employees' well-being by offering health programs and work-life balance

policies, crucial to promoting a positive culture within the institution (Alenezi, 2024). The bank

provides an open communication channel between its employees and leadership to foster

collaboration and trust.

The human resource systems are aligned and exhaustive with the Saudi Central Bank's

strategic plans, especially its objectives to ensure creativity and regulatory excellence.

Nonetheless, challenges remain, such as the urge to adapt to systems of the younger generation's

changing expectations, such as recruiting more technology-skilled employees. Moreover, as the

SAMA builds on its programs, such as Open Banking, uninterrupted investment in advanced

human resource technologies and employee development will strengthen its employees'

efficiency.

Skills: As a controller and promoter of financial stability in Saudi Arabia, has several

crucial expertise. Therefore, to guarantee consistency with its strategic objectives, the bank

emphasizes creativity and modernization under Vision 2030, necessitating constant assessment

of talent gaps (Rahman et al., 2018). The SAMA is an expert in ensuring compliance with the set

standards and regulatory guidelines and in guaranteeing the stability of financial institutions

conducting business in Saudi Arabia. It comprises competence in the supervision of banks,

monetary policy execution, and management of financial risks. The banks have shown

significant competency in ensuring financial technologies, such as executing programs like the

Open Banking framework. The banks' capability to adopt technologies such as data analytics,

Artificial Intelligence, and blockchain enumerates its capabilities to incorporate creativity into

financial regulation. According to Rahman et al. (2018), the bank's vision is aligned with Saudi
Vision 2030, enumerating its strategic planning and long-term goal setting, especially in

enhancing financial inclusivity and supporting economic diversification.

Additionally, the bank strongly emphasizes training and development, developing highly

skilled individuals to handle challenging regulatory and regulatory concerns. Developing leaders

through various initiatives guarantees several leaders for the succession plan. The bank actively

participates in international financial forums, equipping its employees with global perspectives

and best practices.

The bank utilizes various learning tools and technologies to ensure that its employees are

well-equipped with skills. The SAMA utilizes e-learning platforms to provide employees with

continuous training by covering essential areas such as regulatory compliance. The SAMA also

uses simulations and scenario-based learning to train employees in risk evaluations, monetary

policy scenarios, and crisis management to foster decision-making skills. Furthermore, the bank's

human resources provide technological support skills for tracking and recognizing areas that

require more training in ascertaining data-informed development initiatives.

Nonetheless, there are various gaps and areas for improvement regarding skills.

Regardless of adopting technologies such as blockchain and artificial intelligence, deeper

incorporation of the technologies needs additional upskilling among its workforce, specifically in

areas such as extensive data analysis and advanced cybersecurity. As SAMA continues to build

its FinTech activity around its regulatory sandbox and Open Banking policy, launched in 2021,

the organization is supporting the development of Saudi Arabia’s financial technology ecosystem

(Albarrak & Alokley, 2021). There are so many changes that are taking place in the financial

sector. Therefore, leadership should adopt more flexible and agile management and decision-

making techniques.
 Style: Leadership is critical to a financial institution's success in the financial industry.

Banking is a knowledge-intensive industry requiring a high level of intellectual capacity and

workforce engagement for growth and quick strategic adjustment, and the leadership style is

specifically noticeable. The SAMA has adopted the directive style of leadership, which is in

tandem with the hierarchical nature of the organization: the leadership style guarantees a well-

defined decision-making process, conformity with strict regulations, and maintenance of

consistent operations (Alotaibi & Campbell, 2022). The leadership style supports the Saudi

Central Banks' mission of fostering a well-structured surrounding where staff can concentrate on

particular responsibilities.

The SAMA has also adopted the transformational leadership style of inspiring its

employees to commit to a shared organizational mission and vision, which empowers them to

think creatively. The bank has embraced creativity and modernization efforts such as Open

Banking and financial technology programs. The leaders have inspired their employees to

engage with the broader objectives of Vision 2030, promoting a sense of commitment and

purpose to national economic reforms.

Leadership styles such as directive leadership have impacted workforce performance and

motivation, promoting clear expectations and accountability. However, continuous reliance on

leadership style could result in limited creativity, especially among young employees. Notably,

ensuring a balance between traditional hierarchical leadership and modern techniques is a

problem. Employees feel constrained, limiting their creativity (Meirinhos et al., 2023).

Moreover, adopting transformational leadership motivates staff by aligning the employees' vision

with the Saudi Central Bank's expectations for financial innovation and economic
transformation. The technique efficiently engages employees in high-profile programs such as

Open Banking.

Staff: To achieve Saudi Vision 2030, the bank maintains many highly skilled employees.

The workforce at the SAMA aligns with the Saudization policy, with many employees being

Saudi nationals. The focus supports the national goal of promoting local talent and mitigating

dependency on foreign employees. Regarding gender representation, the SAMA ensures gender

diversity, especially by employing more female employees, which aligns with Vision 2030's

social reform objectives of empowering more women (Moshashai et al., 2020). The workforce

comprises experienced professionals and young employees who bring in new ideas, particularly

in areas requiring innovation, such as fintech.

The employees working at SAMA are highly competent in working on financial analysis,

risk management, regulatory compliance, and execution of monetary policies. They also have

technical skills such as artificial intelligence, which is crucial to the Saudi Central Bank's fintech

and open banking programs. Additionally, the bank has hired experienced individuals with

knowledge of global finance systems and economic policies.

Shared Values: It forms the foundation of the Saudi Central Bank's procedures, directing

its organizational culture, affecting human resource processes, and defining employee conduct.

These basic principles are deeply embedded in the Saudi Central Bank's dedication to creativity,

regulatory excellence, and association with Saudi Vision 2030. The core values of the SAMA

emphasize the need for integrity and transparency as crucial ethical standards. It ensures public

trust is earned throughout the bank's regulatory operations and decisions. Another shared value is

guaranteeing professional excellence via continuous learning and development within the SAMA
(Fund., 2024). The bank also actively promotes a culture of creativity as evidenced by programs

such as Open Banking Framework and FinTech technologies.

The shared values impact employee recruitment and talent management since the bank

prioritizes employing candidates who show the organization's fundamental values, such as

ensuring integrity, professionalism, and versatility. In ensuring professional excellence, the bank

provides employees with training initiatives that strengthen ethical decision-making, creativity,

and professional excellence. Additionally, the shared values impact the financial institution's

behavior. It fosters integrity and transparency, establishing a surrounding where employees

emphasize ethical behavior and accountability. The bank also encourages its employees to

remain innovative, inspiring the staff to seek creative solutions and adapt to the evolving

challenges in the financial industry.

Critical Analysis

The human resource management and organizational behavior at the SAMA is in alignment

with Vision 2030. It stresses the Saudization policy and promotes gender diversity; the SAMA

actively adds to the national recruitment goals while guaranteeing a diverse workforce (Rahman

et al., 2018). The SAMA has efficiently integrated creativity into its human resource and

organisational practices. Practices such as Open Banking Initiatives enumerate its commitment to

technological growth and versatility in the rapidly changing financial landscape. Moreover, the

bank has a hierarchical structure utilises the directive leadership style that guarantees clarity in

decision-making and accountability. The structure ensures a robust framework for compliance,
which is crucial for a regulatory institution. The bank insists on professional development and

learning via training initiatives, international collaborations, and workshops. Incorporating e-

learning platforms provides staff with the knowledge and skills required to effectively face

emerging challenges. The SAMA fosters a positive work environment and encourages employee

motivation. It promotes a positive work environment by promoting a culture of inclusivity and

wellness by participating in employee fulfillment surveys and executing programs to support

work-life balance.

Nonetheless, the SAMA faces various challenges, such as the hierarchical structure limiting

faster responsiveness. It may also slow down the human resource process and adaptation to new

challenges, especially in the fast-evolving financial technology. Directive and transformational

leadership coexistence may result in conflict and hinder creativity and employee autonomy. The

recruitment of the younger generation may bring forward new skills and expectations, which

may result in the bank struggling to meet changing needs and, in turn, affecting talent retention.

The SAMA has an impact on global human resource management concerns, such as ensuring

diversity within the workforce by recruiting more women, which is in tandem with Saudi's

Vision 2030. Nevertheless, more efforts are required to ensure inclusivity, especially in

leadership roles, and to guarantee diversity goes beyond sex to comprise global talent (The

World Bank, 2020). The banks focus on a hierarchical structure that may result in challenges

towards shifting towards remote work, which is the new global trend. The SAMA should

integrate advanced human resource technologies to enhance performance and remain competitive

worldwide. Investing in technology can help the financial institution bridge the gap and adapt to

the workforce's changing needs.

Recommendations
 The SAMA should introduce aspects that decentralize decision-making within the

hierarchical leadership structure at the financial institution. It can be achieved by delegating to

mid-level managers to make decisions in human resource-associated areas such as recruitment

and education, mitigating administrative issues, and enhancing responsiveness. Additionally, the

bank must invest in artificial intelligence (AI) human resource tools for employment,

performance tracking, and employee engagement. Technology can foster efficiency, recognize

training needs, and promote workforce fulfillment and capability.

The SAMA needs to invest in training in various vital aspects such as data analysis and

cybersecurity. For example, the bank may collaborate with international fintech organisations to

create geared learning experiences that will close gaps and promote creativity. The bank may

also integrate flexible working arrangements such as hybrid models to cater to younger

employees. To encourage creativity, the bank may establish initiatives recognizing and

incentivizing employees' innovativeness across all levels. It will motivate employees to provide

feedback and integrate their concepts into the institutions' strategies to boost creativity.

The recommendations will ensure that SAMA will remain prompt, creative, and staff-

centred. Enhanced human resource management practices will drive employee engagement,

foster skills, and attract top-tier talent to an institution. Versatility and recognition will encourage

staff, encourage efficacy, and promote a culture of consistent improvement.

Conclusion
The evaluation of the SAMA utilizing the McKinsey 7S framework demonstrates the

crucial relationship between human resource management practices and organizational

performance. The Saudi Central Bank's hierarchical model supports compliance with regulations

and stability of operations, while its devotion to creativity is proven through various activities
such as Open Banking Initiatives. The institution's dedication to enhancing a skilled workforce

and developing economic change is demonstrated by its comprehensive educational frameworks,

emphasizing professional development and convergence with Saudi Vision 2030.

Nevertheless, the SAMA continues to face challenges such as integrating flexibility

within its conventional framework, adjusting to the diverse nature of its workforce, and dealing

with the challenging expectations of employees. The need for these changes is demonstrated by

global changes comprising the rise in remote work and the need for continuous education. The

Saudi Central Bank's mission to promote financial stability and the economy's progression is still

primarily driven by its shared fundamental values of professionalism, creativity, and

transparency.

Combining personal skills with strategic goals is critical for public sector organizations

such as SAMA to have efficient human resource management. The SAMA can hold onto its

leadership in regulatory excellence, enhance staff engagement, and attract top-tier talent by

addressing concerns raised and utilizing its benefits. In the present-day climate, this instance

insists on the broader significance of versatile human resource strategies in managing

organizational and societal shifts worldwide.

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