Ghosn's Nissan Strategy Implementation
EVALUATION OF USE OF STRUCTURE AND SYSTEMS IN IMPLEMENTING STRATEGY OF NISSAN
LIST OF CONTENTS
1. Introduction 4 2. Structure 4 2.1 Organisational architecture framework 4 2.2 Mintzberg’s Six Basic Parts of an Organisation 5 2.3 Integrated Strategic framework of organizational design and structure 6 3. Systems 6 1. Organisational architecture framework 6 2. Simple rules 7 3.3 Simon’s four levers of control 7
Appendices:
A: Mintzberg’s Six Basic Parts of the organization 16
B: Integrated Strategic framework of organizational design and structure 17
List of References 21
1. Introduction
In 1999 Carlos Ghosn was elected as the Chief Operating Officer (COO) of Nissan, which had recently formed an alliance with Renault, another large global motor company (Yoshino and Egawa, 2003). It was evident that the organization was experiencing financial, strategic and operational difficulties attributed to a lack of profit orientation, cross-functional coordination and cooperation, customer focus, a sense of urgency, a shared vision and strategy. Ghosn and his team later proposed and implemented the Nissan Renewal Plan (NRP) aimed at a wholistic transformation of the organization, focussed primarily on implementing necessary improvements whilst maintaining the corporate identity of the organisation.
The ensuing discussion will consider the tangible aspects, being the structure and systems in the implementation of Nissan’s strategy, utilised in the NRP to institute change.
2. Structure
Ghosn asserts that “if the company did poorly, it was always someone else’s fault…one of the root causes of this problem was the fact that managers did not have well-defined areas of responsibility” (Yoshino and Egawa, 2003: 1). Consequently, there was no proper organizational structure within Nissan. Ghosn sought to transform the organization from that of a
LIST OF CONTENTS
1. Introduction 4 2. Structure 4 2.1 Organisational architecture framework 4 2.2 Mintzberg’s Six Basic Parts of an Organisation 5 2.3 Integrated Strategic framework of organizational design and structure 6 3. Systems 6 1. Organisational architecture framework 6 2. Simple rules 7 3.3 Simon’s four levers of control 7
Appendices:
A: Mintzberg’s Six Basic Parts of the organization 16
B: Integrated Strategic framework of organizational design and structure 17
List of References 21
1. Introduction
In 1999 Carlos Ghosn was elected as the Chief Operating Officer (COO) of Nissan, which had recently formed an alliance with Renault, another large global motor company (Yoshino and Egawa, 2003). It was evident that the organization was experiencing financial, strategic and operational difficulties attributed to a lack of profit orientation, cross-functional coordination and cooperation, customer focus, a sense of urgency, a shared vision and strategy. Ghosn and his team later proposed and implemented the Nissan Renewal Plan (NRP) aimed at a wholistic transformation of the organization, focussed primarily on implementing necessary improvements whilst maintaining the corporate identity of the organisation.
The ensuing discussion will consider the tangible aspects, being the structure and systems in the implementation of Nissan’s strategy, utilised in the NRP to institute change.
2. Structure
Ghosn asserts that “if the company did poorly, it was always someone else’s fault…one of the root causes of this problem was the fact that managers did not have well-defined areas of responsibility” (Yoshino and Egawa, 2003: 1). Consequently, there was no proper organizational structure within Nissan. Ghosn sought to transform the organization from that of a
References: 2. Leadership Harrison’s open system’s model cited in Amos (2006) enables leaders to view organizations wholistically, however, as Ghosn already proved himself as a capable and experienced strategic leader, this model is not applicable in this context 3.3 Force field analysis Lewin cited in Amos (2006) proposed a process of force field analysis which considers the forces for and against change 4. Conclusion and implications for future Ghosn provided effective leadership, as per Amos (2006) by: Delegating of authority The COO’s overall intention was to transform the organization from functioning as a hierarchy in a bureaucratic fashion to a divisional/matrix form (Yoshino and Egawa, 2003) (adapted from Johnson cited in Boojihawon, 2006) [pic] (adapted from Lewin cited in Amos, 2006) [pic]