Nissan Case Study

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The Global Leadership of Carlos Ghosn at Nissan

During March 1999, Brazilian Carlos Ghosn took over as the first non-Japanese Chief Operating Officer of Nissan, when Nissan had been incurring losses for seven of the prior eight years. Many of the industry analysts expected a culture clash between the French leadership style and his new Japanese employees. Analysts said, because the financial situation at Nissan had become critical so the decision to bring Ghosn in came at the worst possible time. The continuing losses were resulting in debts (approximately $22 billion) that were shaking the confidence of suppliers and financiers alike. Furthermore, the Nissan brand was weakening in the minds of consumers due to a product portfolio that consisted of models far older than competitors. In fact, only four of the company’s 43 models turned a profit. With little liquid capital available for new product development, there was no indication that Nissan would see increases in either margin or volume of sales to overcome the losses.

Some of the issues Carlos Ghosn faced are

Consensus Decision-Making and its Relationship to Career Advancement

Addressing Corporate Culture Issues

Carlos Ghosn’s Philosophies of Management

The First Months in Japan and the Cross-Functional Teams

Reforms in Full Swing

Reducing Redundancies

Keiretsu Partnerships


Performance Evaluations and Employee Advancement

The next leader of Nissan was either going to turn Nissan around within two to three years, or the company faced the prospect of going out of business.Understanding the immediacy of the task at hand, Ghosn boldly pledged to step down if Nissan did not show a profit by March 2001, just two years after he assumed duties. But within eighteen months Nissan began to operate profitably under his leadership.

Background of Carlos Ghosn

Carlos Ghosn was borned in Brazil in 1954 to French and Brazilian parents, both of Lebanese heritages; he received his university education in Paris. After graduation at age 24, Ghosn joined the French firm, Compagnie Générale des Etablissements Michelin. After a few years of rapid development to become Brazilian subsidiary, he learned to manage large operations under difficult conditions such as the runaway inflation rates in Brazil at that time. Similarly, as the head of Michelin North America, Ghosn faced the pressures of a recession while putting together a merger with Uniroyal Goodrich. Because Michelin was a family-run company, regardless of his successes in his 18 years with Michelin, Ghosn realized that he would never be promoted to company president. Therefore, in 1996 he decided to resign and join Renault S.A., accepting a position as the Executive Vice President of Advanced Research & Development, Manufacturing, and Purchasing. Ghosn led the turnaround initiative at Renault in the aftermath of its failed merger with Volvo.Because he was so focused on increasing margins by improving cost efficiencies, he earned the nickname “Le Cost-Killer” among Renault ‘s top brass and middle management personnel. Three years later, when Renault formed a strategic alliance with Nissan, Ghosn was asked to take over the role of Nissan COO in order to turn the company around in a hurry, just as he had done earlier in his career with Michelin South America. To Carlos Ghosn this would be the fourth continent he would work on, which combined with the five languages he spoke, shows his capacity for global leadership.

Background of Nissan

A company called Jidosha-Seizo Kabushiki-Kaisha (which means “Automobile Manufacturing Co., Ltd.” in English) was established in 1933, in Japan. It was a blend of several earlier automotive ventures and the Datsun brand which it acquired from Tobata Casting Co., Ltd. Shortly after that in 1934, the company name was changed to Nissan Motor Co., Ltd. After the Second World War, Nissan grew steadily, expanding its operations...
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