Nissans Need for Leadership and Change

Nissans Need for Leadership and ChangeCase SummaryThe compositors case call for of departure is Nissans troubled fiscal position and loss of documentation in 1999. As a Nipponese fraternity Nissan had built stately manufacturing platform for its 43 car models. However callable to poor caper decisions in the past the company lucrativeness suffered, hence the need for a new leading. Carlos Ghosn stepped in at 1999 promising to turn the company virtually in two historic period.The case describes the challenges that he dealt with in restructuring the company, building cartel trough transparency in operations and promoting new type of leadership styles at Nissan. There are internal and external factors that affected the Nissan exercise prior to Carlos Ghosn arrival as COO.The internal factors refer to the current precaution style that tapered on short-term performance and applied science reading and neglected the customer satisfaction and service. The precaution showed ignorance to designer trends and customer preferences, which had part the Nissan brand image.The external factors refer to the devaluation of the yen in relation to the US$. The economic conditions were non in a favor for Nissan as the governance support to the industry seemed to evaporate. The rating agencies Moody and Standard Poor menace to lower the Nissan investment rating from investment grade to junk if Nissan did not acquire support from another car company.The exam requirement is to the highest degree evaluating the Carlos Ghosn approach in turning Nissan around in relation to the pursual aspects 4Question 1 Resistance to tradeWas justification required? What were the underlying causes of the resistance?With Carlos Ghosn becoming the new COO the managers and the employees credibly had multiform fillings about what his intentions were in relation to their job certificate. Known as the Le Cost Killer Ghosn did not hesitate to challenge the current organisational elaboration and internal processes.The core of the resistance at Nissan was the COO Brazilian ethnicity with Lebanese heritage and cultural differences of approaching the problems. It is wholesome cognize that the Japanese management cultivation is masculine with large power distance and regard to the higher(prenominal) ups (Hofstede). Ghosn had shown a proactive management style at Renault by improving cost-efficiencies and out-of-pocket to the good management record previously, he was headhunted and induce a COO of Nissan. It is logical to assume that the new COO should be someone who knows the local culture and customs, but in this case Ghosn was probably aware of the fact that despite of his shortage of knowledge about it, he had an advantage to rent worked on four continents and overcome cultural differences.antecedently in 1991 Nissan had been successful by producing good quality cars, but the company distanced itself from the customers needs of stylish, innovative ca rs. The company stall and later the disruptive management style which was short-term market share oriented, instead of long-run profitability oriented, contributed to the Nissan need of strategic change. The keiretsu investments in suppliers equity and real-estate had created a false security net. The keiretsu tradition is wide spread in Japan and in that champion Nissans managers believed that the investments equal to loyalty and cooperation within the suppliers family. It could be assumed that despite the higher purchasing be the Nissan managers did not terminate the unprofitable relationships repayable to vertically-integrated long-term interdependencies. The managers involved in the negotiations and decision make probably had been afraid of losing their jobs and placement quo if the plant closes gloomy and discontinue the suppliers relationship.In order to overcome the challenges Ghosn use the Nissan Revival Plan. In the plan he set strategic targets to be reached by 200 1. His plan was to reduce cost by closing slash unprofitable plants, terminating keiretsu agreements, developing new cars and improving the Nissan image. One of the reasons why Ghosn was heedful about the Japanese culture was the agreement that Hanawa made with Renault before the strategic conjunction took place. The agreement stated clearly that the new COO has to period sensitive and in respect to the Japanese culture. Without the cross-functional teams the resistance of implementing the change would own been too strong for Ghosn to execute its plan. The CFTs were members of key business operations and with their sub-teams they account back to the supervisors. Ghosn put and emphasis on accountability and responsibility by eliminating positions that did not drop direct influence on the company performance. The resistance was inevitable due to Ghosn management style, however in the process of restructuring he managed to convince the managers that the new strategic approach of decentralization will clear Nissan, respectively the employees on the long run.Question 2 Organizational cultureIn your opinion how did different split of the Nissan organization feel about Ghosn and why? Was Ghosn successful in enlisting their support?The paradigm of the decelerate decision-making process and the in stiff meetings in order to achieve consensus as well as aligning the decision making process must extradite caused tensions with the Ghosn arrival. However when he assembled the CFTs, he restructured the organization by flattening the decision making process. Within the organizational restructuring Ghosn implemented the matrix structure, which required change in the leadership styles within Nissan, as well as change in the working process. Five factories were closed and 21,000 jobs within management, manufacturing and dealer net were reduce in the process. As a gaijin Ghosn had to prove to the media, the investors and the stakeholders that his NRP requires the Ni ssan employees full cooperation and trust. The performance establish incentive 6system in terms of cash and sprout options was unknown in the Japanese culture before. Also the seniority vantage system had been removed and replaced with KPI (key performance indicators). This caused insecurity within the workers and lack of cooperation, peculiarly among the older managers who probably had expected their rightful rewards. There must have been strong resistance within the different parts of the organization due to Ghosn carrot and the stick way to put things in perspective. By breakup unprofitable production and demanding responsibility from the managers he showed determination and also cautionfulness about the Nissan organizational culture. In the process he enlisted the organizational parts on his side by letting the managers to be involved in the restructuring as well.Ghosn successfully executed the NRP as the case describes, Nissan had the best financial performance in history . He also managed to reduce the purchasing costs by 20%, the supplier base and the keiretsu influence.Question 3 depicted object cultureHow pronounced have cultural differences been between Ghosn and the organization? Was culture a helper or hinder for Ghosn?As described in the text under Addressing national cultural issues career advancement stack only be achieved by Nennkou Jyoretu, where the senior manager had the power, and the responsibility of the decision-making. Although the managers had affirm over the operations, the team-members were hindered of contributing in the decision-making, hence the slow development process. The fear of loosing face and failure disrupted the value chain at Nissan and when Ghosn came on board, he had to make some restructuring changes and to adjust the power distance. Japan is known for high employment security country and employees take pride in their work. However, Ghosn faced a challenge discovering that every team believed that their depa rtment is not responsible for Nissan problems and therefore unaware of the fact that the company is close to bankruptcy. The formal and informal decision making was not efficient at Nissan as the managers did not arrive-up on their orders. There was too much focus on the functional structure and cost per unit. 7Instead the managers should have focused on the customer satisfaction and meeting the investors demands for improving the hire and the stock value.Ghosn listed five urgent problems that Nissan was facing and despite the cultural differences he believed that diversity was a strength rather than weakness. He communicated the 3 managerial mavens to the employees transparency, execution and communication. With his open management style he turned down barriers of power and empowered the middle management by establishing the cross-functional teams.Despite the major(ip) cultural differences between Ghosn and the organization it worked well in the end due to Ghosn leadership skill s of letting the employees to contribute to the changes by involving them in the decision management the initiation process and the implementation phase.Question 4 Luck and clockWould Ghosn and his cross-functional team been able to make the same changes a few years to begin with?There are some pros and cons in answering this question. As mentioned in the text the government practice of bailing out troubled companies did not appear in the case of the bankrupt financial house Yamaichi. This character played a psychological role for the Nissan employees and Ghosn used it cleverly to command his new strategy.Carlos Ghosn has a background as VP at Renault. The management skills and resources acquired at Renault most evidently helped him to execute the strategy changes at Nissan. This raises the question whether he could be capable to execute such a management excellency at Nissan without the management experience at Renault, probably not. A few years earlier Ghosn would not have h ad the support from Hanawa.The cross-functional teams worked well due to the internal and external economic conditions. They were with the sole purpose to drive change and transform Nissan from a consensus culture, where those with different opinion did not have to accident 8to pledge their point of view to a consensus culture with root to the western organizational culture style.In 1999 Nissan had probably reached the lowest point in financial performance and brand equity. Few years earlier the situation was bad, but not worse in the financial sense. 9Additional question Other aspects of the evaluationRenault Nissan allianceThe CEO Hanawa gained an alliance with Renault who took 36,8% equity stake in Nissan. Hanawa negotiated agreement as followsNissan retains its own discloseThe Nissan CEO would continue to be selected by Nissan board of directorsNissan would take the principal responsibility to implement the revival planBenefitsEconomy of scale sensitive marketsShared distrib utionSharing technology and know-howDeveloping new technology based on the shared experienceBeing able to respond timely to the market needsBenefits for the both companiesBy selecting the most commit suppliers, the number of the suppliers can be reduced, hence gaining advantage of controlling the suppliers for price negotiationSharing the same platform in productionTo fixate smooth transition in the allianceCooperation comity secured the implementation of the decisions interpreted during the transition periodThe managers acted upon the transition decisions, become better to give feedback and follow throughNew ideas of synergies merged in the aftermath