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Abstract: The social and psychological needs of an employee must be understood in order to motivate him to complete the assigned tasks. Unless the leaders fully support the premise that organizations must have a high degree of communication to meet employee’s psychological needs, it will remain stagnant. This may further give rise to grapevines and conflicts which adversely affect the organization. Effective internal communication is needed for management to develop and sustain a competitive advantage for organizational performance and improvement. Transformational leaders have a  tremendous influenceontheworkplaceandorganization’sculture. If they wish to institute change, their leadership styles must be strategically aligned to accommodate the organizational culture. McKinsey’s 7S framework is a model for analyzing organizations and their effectiveness. It looks at the seven key elements that make organizations successful: strategy, structure, systems, shared values, style, staff and skills. It can be aligned with any organizational issue that needs to be corrected. Utilizing past literature, survey questions, and interviews, this research paper will find out the strategy and implementation issues in communications flow that the private service sector faces and how a leader can initiate and bring change by alignment with McKinsey’s 7S Framework. [PUBLICATION ABSTRACT] Links: Linking Service, Linking Service, Linking Service Full text: Headnote Abstract The social and psychological needs of an employee must be understood in order to motivate him to complete the assigned tasks. Unless the leaders fully support the premise that organizations must have a high degree of communication to meet employee’s psychological needs, it will remain stagnant. This may further give rise to grapevines and conflicts which adversely affect the organization. Effective internal communication is needed for management to develop and sustain a competitive advantage for organizational performance and improvement. Transformational leaders have a tremendous influenceontheworkplaceandorganization’sculture. If they wish to institute change, their leadership styles must be strategically aligned to accommodate the organizational culture. McKinsey’s 7S framework is a model for analyzing organizations and their effectiveness. It looks at the seven key elements that make organizations successful: strategy, structure, systems, shared values, style, staff and skills. It can be aligned with any organizational issue that needs to be corrected. Utilizing past literature, survey questions, and interviews, this research paper will find out the strategy and implementation issues in communications flow that the private service sector faces and how a leader can initiate and bring change by alignment with McKinsey’s 7S Framework. Keywords: Change Management, McKinsey’s 7S Framework, Organizational Communication, Transformational Leadership Introduction An organizational setup is a conjoint effort of leaders and followers who work for the accomplishment of certain predefined objectives. The leader’s role is paramount and he has the ultimate responsibility of taking the resources in the desired direction. The concept of leadership has evolved across a period of time. Balgobind (2002), in a comparative study of different transformational leaders, has found that in the past the leader was transactional who was aware of the link between effort and reward. This kind of leadership was responsive and its basic orientation was to deal with  current issues. These leaders would rely on standard forms of inducement, reward, punishment, and sanction to control followers. They motivated followers by setting goals and promising rewards for desired performance. Leadership depended on the leader’s power to reinforce subordinates for their successful completion of the bargain. But times have changed and so has the role of a leader. The leader of today is transformational. These leaders arouse emotions in their followers which motivates them to act beyond the framework of what may be described as exchange relations. Leadership is proactive and forms new expectations in followers. Leaders are distinguished by their capacity to inspire and provide inspirational motivation, individualized consideration, intellectual stimulation and idealized influence in the followers. They create learning opportunities for their followers and stimulate them to solve problems and possess good visioning, rhetorical and management skills. They motivate followers to work for goals that go beyond self-interest. The success of any organization depends largely on the processes and flow of internal communications. The flow of information can be one way or two ways, formal or informal and personal and impersonal. The relationship between employees is based on personal, professional and ethical roles. The communication flow has a great influence on the kind of relationships that exist in the organization. As long as the right messages are conveyed within the defined limits of authority and responsibility, it is helpful for goal attainment. But there are instances when the formal channels of communication are not used and the need to exchange and share ideas gives rise to grapevine communication. The messages are distorted and the incorrect information is spread across. Many times this exchange results in conflicts and strained relationships. If the situation is not taken care of it may affect the organization greatly and may even result in a loss of job for some and may put the organization in severe crises. This situation needs to be corrected and a leader’s intervention can bring a positive change. McKinsey’s 7S framework is a model for analyzing organizations and their effectiveness. It looks at the seven key elements that make the organizations successful: strategy, structure, systems, shared values, style, staff and skills. It can be aligned with any organizational issue that needs to be corrected. The private service sector plays a major role in the growth of any economy and employs large number of people. The interrelationship across all levels is largely dependent on the communication flow in this sector. Most of the information is not communicated in the right manner and employees resort to grapevine for their satisfaction. As such the communication problems in this sector multiply and threaten the survival of the organization. Based on present survey and past studies, the paper aims at highlighting the role of a transformationalleaderinsolvingthecommunication problems related to the private service sector. The McKinsey’s 7S Framework has been aligned with leader’s role for bringing organizational change and excellence. Literature Review Transformational leadership theory has captured the interest of many researchers in the field of organizational leadership over the past three decades. This theory was developed by Bums (1978) and later enhanced by Bass (1985, 1998) and others (Avolio &Bass, 1988; Bass &Avolio, 1994; Bennis &Nanus, 1985; Tichy &Devanna, 1986). Bums (1978) first introduced the concept of transformational leadership in his research of political leaders, establishing the concepts of transforming leaders and transactional leaders, and concluded that leaders and followers help each other to advance to a higher level of motivation. The major premise of the transformational leadership theory is the leader’s ability to motivate the follower to accomplish more than what the follower planned to accomplish (Krishnan, 2005). Transformational leadership has four components: idealized influence, inspirational motivation, intellectual stimulation, and individualized consideration (Bass, 1985). Bums postulated that transformational leaders inspire followers to accomplish more by concentrating on the follower’s values and helping the follower align 06 November 2014  these values with the values of the organization. Furthermore, Bums identified transformational leadership as a relationship in which the leader and the follower motivated each other to higher levels which resulted in value system congruence between the leader and the follower (Krishnan, 2002). Leaders have a tremendous influence on the work place and effect on the organization’s culture. If leaders wish to institute change, their leadership styles must be strategically aligned to accommodate the organizational culture (Sheahan, 2012). The effectiveness of organizational communication is determined by leadership and leadership traits that allow for an open path of communication with employee and organization (Pirraglia, 2012). McKinsey’s 7S framework provides a strategic approach to HRM. It was developed in the early 1980s by Tom Peters and Robert Waterman, two consultants working at the McKinsey &Company consulting firm. The basic premise of the model is that there are seven internal aspects of an organization that need to be aligned if it is to be successful. These seven features are interrelated and have to be considered jointly to achieve a better integration between HR practice and organizational strategy (Talwar, 2006, p.210). The staff element within the McKinsey 7S Framework refers to employees and their need for development and motivation. Style refers to the actions and behavior of senior executives, rather than what they say. The conduct of top management is an extremely valuable management tool that conveys and reinforces strong messages to stakeholders, particularly employees, throughout the organization (Fleisher and Bensousan, 2007, p.49). A range of highly respected management scholars including Armstrong (2008) and Adair (2009) have emphasized the importance of formulating and promoting shared values within organizations. System relates to processes and procedures that are necessary in order to conduct the business (Murphy and Willmott, 2010). The disadvantages of a tall hierarchical structure have been specified by Dlabay (2011) as inflexibility to respond to changes in the marketplace, loss of communication messages between the layers, de-motivated workforce etc. Johnson (2006) defines corporate strategy as a plan aimed to achieve corporate objectives, Skills, for the organization relate to competencies and capabilities required within the organization in order to achieve organizational objective in an effective way (Schuler and Jackson, 2007). Communication is one of the most dominant and important activities in organizations (Harris &Nelson, 2008). Fundamentally, relationships grow out of communication and the fu nctioning and survival of organizations is based on effective relationships among individuals and groups. In addition, organizational capabilities are developed and enacted through â€Å"intensely social and communicative processes† (Jones et al, 2004). Communication helps individuals and groups coordinate activities to achieve goals, and it’s vital in socialization, decision-making, problem-solving and change-management processes (Berger, 2008). The focus of organizational communication is on the whole system, rather than on parts of the system (Katz &Kahn, 1996). The study of organizational communication centers on processes of interaction, means by which people obtain information, form opinions, make decisions, merge into the organization, leave the  organization, and create rapport with one another (Shockley-Zalabak, 1999). Through communication, people coordinate their actions to achieve individual and organizational goals (Shockley-Zalabak, 1999). Effective organizational communication can be achieved through transformational leadership and will generate greater organizational and employee performance within small organizations (Dario Martinez, 2012). Effective communication is needed for management to develop and sustain a competitive advantage for organizational performance and improvement (Avolio, Lado, Boyd &Wright, 1992; Rowe, 2001). Effective communication succeeds when employees support the leader and the organization if there is a belief that employees’ efforts will be rewarded. Leadership succeeds when initiating response or responding to change and leadership is inextricably linked to the credibility of those leading. Constituents will become willingly involved to the extent that they believe in those sponsoring the change (Kouzes &Posner, 2003). Methodology and Data Collection The experiential survey has been used for the purpose of the paper. Data is qualitative in nature and has been collected through primary and secondary sources. The questionnaire consisted of open ended questions related 06 November 2014  to communication flow and processes. Five private service organizations comprising of hospitality, academia, telecommunication, retail, and insurance were included in the survey. Ten employees from each sector have been taken in the survey and their experiences related to communication problems in the organization have been considered for the purpose of study. Analysis The analysis is based on present survey and past studies. The findings revealed that organizational communication is one of the most important determinants of sound interpersonal relationships within the organization. In a reputed retail store, information was not transmitted through proper channels. There was ambiguity regarding the instructions communicated to employees. This caused discomfort and conflicts in the organization and affected the quality of work. The General Manager-Marketing of the retail store admitted that most of the miscommunication led to conflicts which were difficult to resolve. When asked about the negative influence of past workplace experience on the present organization, the HR Manager of a well known hospital revealed that most of the employees were always thinking about their past work environment and their self-fulfilling prophecies were leading them to live with fear and poor emotional management. In many organizations, most of the information was not communicated to the employees and the decisions were thrown at them. The instructions were not seriously obeyed and the employees turned violent during work. The Area Manager of an insurance company revealed that closed communication gave rise to violent behavior in employees. Grapevine communication has prominence in all organizations and has its own benefits but the Principal of a Technical College revealed that their organizational communication largely depended on grapevine and it was a major cause of dissatisfaction among the employees and resulted into high turnover. The employees of a telecom company expected encouraging behavior from their senior manager. A lower level employee revealed that the absence of compassion in communication and humiliating remarks of their departmental head was extremely offensive to their self-esteem. When these findings were considered around the elements of the McKinsey’s 7s model, it was felt that the 7s model could be linked to the problems related to organizational communication as: Strategy – Improper communication flows give rise to conflicts and hamper the organization’s image. It is important to make the right communication strategies for conflict resolution and sustainable advantage. Structure – Most organizations use formal channels of communication. This results in choking of essential information giving rise to grapevines. The organizational structure has to be designed in a way that information is not choked. Systems – The internal processes and procedures facilitate good communication and it is important to understand how effective they are in maintaining the correct flow. Skills – Communication can flow smoothly if the staff possesses the right skills. Staff – The staff can facilitate effective communication and value needs to be attached to communication skills during recruitment and selection. Style – The management is responsible for promoting a culture of open communication. Shared goals – The organizations’ belief system and attitude towards communication is at the core of other elements.