Carlos Ghosn: Organizational Change and Leadership (Case 3)
1. What are the different management practices that are unique to Japanese organizations and how do they differ from the French and European practices? Cultural background is the source of organizational designs. What characterizes a culture is eventually influencing the way organizations tend to take shape. A common company structure in Japan is the Keiretsu, where a lot of departments and small firms are embrace into one big corporation. It reflects a lot of elements of the Japanese culture and somehow making this structure really unique. The way they do business in this country is the result of a set of values such as a long-term orientation and collectivism. In fact, Japan has a strong high context culture, which means that communication is not only based on words but rather on implicit messages and signals. People from these cultures tend to trust each other personally; they don’t mind accepting informal/oral agreements rather than written contracts. Moreover, Japan is one of the most collectivistic countries, in which people from their birth all the way to their retirement consider themselves being loyal group members. Consequently, they take personally any group achievement that occurs during their career. This explains the traditional life-long orientation that characterizes the Japanese employment. Therefore, the companies invest significantly in training their workers. Through this mechanism, a mutual trust is built upon the organization and its workforce, which leaves the employees thinking their organization as an actor responsible of all their competences. Despite that France has a high context culture as well, the French culture doesn’t have a lot of similarities with the Japanese culture. In fact, their business culture is characterized by a strong individualistic identity that tends to create less commitment to the firm; the employees don’t identify themselves to the firm. Furthermore, the French culture is typically a “western” one and favors a short-term orientation. It is crucial to nuance those observations in the case of Ghosn with Nissan. He does not represent the typical French manager in a way that his culture was influenced by his experiences from different countries.
2. Do the management practices followed by Japanese organizations enable them to remain competitive in a changing global economic environment? Why, how? Firstly, it is crucial to make a difference between the Keiretsu (which is proper to Japan) and other Japanese organizations that follow more or less this rigid structure. Let’s focus our analysis on the Keiretsu due to the fact that it permits us to outline more easily the Japanese cultural particularities. Although those elements create possibilities to have trust-worthy workers producing high quality work, they provide too much rigidity. They create a path to follow that is almost impossible to avoid. This means that firms that are part of those Keiretsu keep suppliers on a long-term basis and consider employees as a fixed asset. By acting with a long-term orientation in mind, there is no point in changing business partners with whom a good relationship was built upon in order to find better and more profitable partnerships. In the actual economic environment, the organizations are expected to adapt quickly to change thus shortening their products life cycles. This is due to the business increasing clock speed, which means coming up with new innovative products faster than your competitors. More often, decisions are made to influence the share value. For example, the car industry has totally changed during the last 50 years. The way we look at cars now is not what it once was. Car companies used to build less than 10 models and offering them in 2 colors. Nowadays, cars are being personalized to each and every client with a list of options and...
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