CM J41 Strategy Execution
The case is about the turnaround of Nissan in the year 1999 to 2002. Nissan experienced great finances looses for the past seven out of eight years which resulted in a 22 billion $ debt and an outdated product portfolio with little liquid capital for new product development. In just 12 months the new COO, Carlos Ghosn (CG), succeeded in turning Nissan into profitability with a new and more performance oriented corporate culture.
2.0 Evaluation of Carlos Ghosn’s approach to turning Nissan around: The overall evaluation of CG is full of success which, I think, is duo to his personal background, his philosophies of management and a little bit of luck. CG has a multicultural background and has proven himself having capacity for global leadership. In his career he has learned to manage large operations under adverse condition on four different continents and speaks five languages. He has a very open and pragmatic approach towards his surroundings, with this in mind his specialty is improving cost efficiencies, and this has earned him the nickname “Le Cost-Killer”. CG philosophies of management consist of three principals. These are transparency, execution and communication which all are essential to give employees structure and direction. His leadership style is characterized by him being achievement orientated, participative, supportive and directive leader. Furthermore a unique quality and vital factor for CG success is in my opinion was his implementation of the Cross Functional Teams (CFT) and his approach to cultural conflict, which he sees as an opportunity to create rapid innovation, if paced and channelled correctly.
In the above mentioned I state, that CGs approach was a success. In the following four aspects I will try to prove this, by stressing out different arguments from the case combined with relevant theory.
2.1 Resistance to change:
People do not resist change but specific things. (Notes lec. 5) Over 50 % of all change initiatives in organizations fail to succeed and when this occurs, leaders often blame resistance. They assume that if only people would stop complaining and get on board, all would be fine (Ford et al., 2009). But resistance is, in fact, a form of feedback, often provided by people who know more about day-to-day operations than you do. It can therefore be turned into a vibrant conversation that gives your change effort a higher profile (Ford et al., 2009). This could be one of the reasons to why CG set up the CFT. Dismissing the feedback deprives you of potentially valuable information, costs you goodwill, and jeopardizes important relationships. If you learn to embrace resistance, you can use it as a resource and find your way to a better solution (Ford et al., 2009). Resistance, properly understood as feedback, can be an important resource in improving the quality and clarity of the objectives and strategies at the heart of a change proposal. And, properly used, it can enhance the prospects for successful implementation (Ford et al., 2009).
Looking at the theory applied and the case, I believe that the resistance to change that CG faced was inevitable. As I see it one of the main reasons for resistances was due to the culture background, however there were several of underlying causes that could create a tension and resistance to change at Nissan. One is a more general conflict that arises when trying to move people, who do not find movement necessary. Another resistance point could be the urge for protecting ones career development, which before the intervention of CG was based on promotion on seniority basis and a zero mistake culture, which resulted in general a lack of innovation, a slow decision making and risk adverse mentality. To this CG responded with a change in the career development structure at Nissan, so that the highest achievers got the highest rewards and promotion was based on performance,...
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