Culture Change at Nissan
For Organizational Behavior Course
Dr. Rabaa Amr
Marwa El Masry
Culture Change at Nissan
Nissan is an originally Japanese company that markets both locally and in the UK and USA and is one of the world’s most leading manufacturers of cars. Nissan’s vision is ‘enriching people’s lives’ and the mission statement is ‘Nissan provides unique and innovative automotive products and services that deliver superior measurable values to all stakeholders in alliance with Renault’. In the 1980s, Nissan was in crisis, which influenced the organization’s perception. There was a slow-down in demand in Japan and a fall of the domestic market share from 30% to 24% in 1987. This invariably caused employees to become discontented and blame the top management for focusing all their attention overseas than on the local market. This caused deterioration in the labor-management relations. Primarily Nissan’s growth was due to the labor-management cooperation in the 1960s and 1970s, which was the heart of the Nissan culture. This breakdown in the structure and culture of the company caused the labor and the management to not communicate. In 1985, Mr. Yakata Kume was appointed as CEO of Nissan in an effort to save the downfall of the company. He placed a new motto: “management and the labor union should both discharge their duties properly” and he asked everyone “to change the traditional currents and create a new corporate culture”. Throughout his new motto, he encouraged the workforce to focus on the marketplace without being restricted by the company’s hierarchical structure and customs. The new corporate structure had emphasized customer satisfaction and the importance of expanding the customer base. Yakata also decided to actively create new products and emphasized on the need to develop the people of the company. Yakata visited the company offices and firms throughout Japan to create bold attempts to improve communications with employees and other companies in the Nissan group. He made all employees to address each other using “mister” instead of their rank. The organization’s previous culture involved calling employees by their titles, which was the main source of the break that occurred within the organization. He also stopped female employees from wearing traditional company uniforms and introduced flexible working hours. After he began to implement the new organizational culture to influence the organization’s behavior, Nissan experienced another blow. There was a sharp appreciation of the Yen that translated into a decline of competitiveness overseas that caused a huge loss in the Nissan fiscal year of 1986. The gradual drive of the organization to implement a cultural change had paid off and their created the Be-1 limited production model that was a hit in the Tokoyo Motor show and two years later in China the car was a smash hit. With Yakata’s changes, the company’s organizational behavior became sustainable regardless of external events indicating his OCB. Currently, the CEO of Nissan is Carlos Ghosn, a French-Lebanese-Brazilian, which has been reviving Nissan. After Yakata had established a new culture of flexibility and communication amongst its employees, Carlos brought the company to a global level of success. He revolutionized Nissan by improving the quality of its products and its marketing strategies. The creation of the Nissan GTR rivals the Porsche in both performance and price. The new limited edition product was featured highly, along with Carlos being promoted as a superstar, in the manga comic book which spoke directly to the Japanese culture. He recruited engineers from Japan’s Nissan plants to other plants around the world to construct assembly lines which increased the motivation of local employees providing the sensation that they are the best of the best and that plants around the world needed...
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