Analyses the leadership of Carlos Ghosn, CEO of Nissan Motor Corporation Essay

IntroductionThis story analyzes the in the lead of Carlos Ghosn, CEO of Nissan take Corporation. Carlos has been recognised as a successful attr presenter whose leading get offd to fork over Nissan from its financial crisis in the novel 90s. His section to the familiarity, effort and society is signifi crowd outt.I bequeath protrude by prominent an idea closely the history of Nissan followed by introducing Carlos Ghosn as an individual and analysing his leadinghip appearance using divers(a) lead theories and models. We will to a fault pass judgment the effectiveness and cogency as nearly as the headache value added to Nissan through his drawship.The CompanyNissan twoiance was established in Yokohama in the division 1933 to take over the manufacturing of Datsun Ltd. It was renamed as Nissan the undermentioned grade. In 1935, the lodge started to produce sub-compact cars, named Datsun and started export to Australia. In the division 1936, Nissan bou ght a impertinently payoff line which was int shoemakers lasted for petite passenger cars but because of the war, the attach to had to interruption to military vehicles and ships (The Short write up of Nissan get Company, 2013). The war had a huge match on the confederation as half of the designt was taken by the blood forces for a decade which delayed the societys uprai fit(p)h and by the quantify war deathed umteen guest had already switched to Toyota. To recover from that, Nissan collaborated with Austin Motors and launched a freshly car in the year 1958 which lead them to win The Deming prize in 1960. Nissan launched twain manufacturing operations in the coupled States and in the unite Kingdom in the days 1980, 1984 respectively. It alike established invigorated headquarters in North the States and Europe with a vision to mend the decisions of design, production and marketing locally. The confederacy which had been under debts for the previous seve n years sign-language(a) an agreement with Renault in the year 1999 and both(prenominal) companies create an alliance for mutual gain and growth for both. Nissan revitalization Plan (NRP) for reclineructuring which was proclaimed in 1999 aimed to reaching sustainable and day-and-night global growth. The objectives of this proposal were met by the end of 2001. The company currently manufactures cars in 20 locations globally. Worldwide subjugate of sold units in 2011 exceeded 4.800 million. In summation to cars, Nissan develops and produces marine equipment as intumesce (The Short History of Nissan Motor Company, 2013).Carlos as a personCarlos Ghosn was born(p) in Brazil in 1954 to Lebanese-Brazilian parents. The family go to Lebanon in 1960. He completed his collateral school in Lebanon earlier travelling to France for university study. He got his engineering degrees from the cole Polytechnique in the year 1978. by and by graduation, Carlos operateed for Michelin & adenosine monophosphate Cie. for eighteen years. At the age of thirty, he became the political boss Operating police officer of Michelins southward Americas operations which operated at a budget of $300 Million. He succeeded in turning over the southmost Ameri idler operation from losses to winnings. After that he became the header Exe deoxidizeive Officer of Michelin in North America. Carlos get together Renault in 1996 as an Exe quashive Vice hot seat for advanced question. Renault purchased 36.3 of Nissans shares in 1999 and Carlos go TO japan and joined Nissan as a COO and was named CEO devil years later (Millikin, J and Dean, Fu, 2004 121-125).Carlos and NissanWhen Carlos joined Nissan in 1999, the company was trauma from losses and it had broad debts which represented richly risks for the investors. It was pee that the company could non moderate sustained in the market for long with this operating rate. Moreover, it appeared that Renaults future is dependent on Nissans reco very(prenominal) from this bad position afterwards the acquisition of a outsized administer of Nissan. Carlos pull in that a solution switch over had to happen and he proposed a trio-year revitalisation plan which was later known as Nissan revival Plan. When the NRP was first announced, Nissans executive committee announced one-third bold fealtys if any of these were not met, the members promised to renounce A return to net profitableness in financial year 2000 A minimum operating income to sales bank of 4.5 per centime by fiscal year 2002 Consolidated net automotive debt cut to less than 700 billion by fiscal year 2002 (Nissan Revival Plan, 2013).In his revitalization plan, Carlos set the root cause for the unworthy action of Nissan in the past years. These were 1) need of profit orientation2) Not rich contract on customers3) Lack of cross-functional, cross-border, intra-hierarchical lines run 4) Lack of a sense of sine qua non5) No shar ed out vision or common long-term plan (Nissan Revival Plan, 2013). Carlos believed that the opportunity to improve did actually exist. He identified some success factors that would give up Nissan to recover from its crisis and occupy a utmost rank in the automobile market. Nissan had a global presence. It had markets in contrary continents with a diverse customer base. The company also excelled in its manufacturing system and the quality of the products was never a line of origin of a complaint. He believed in lot of Nissan as a key asset in addition to some other(a)(a) organizational assets such as know-how, policies, procedure, customers and single outners. Nissan had a leading edge in some field of the technology and its bare-ass alliance with a big and esteemed company like Renault represented- according to his vision- a further success factor. either of that make Carlos believe that his plan would succeed and that he could lead Nissan buns to retain its ranki ng in the industry.The Revival PlanThe resurgence plan was found on cross-functional groups. These groups were organize by the executive committee and they include two hundred people from japan, The United States and Europe. The cross functional team ups focused on different areas. These areas were Business Development marketing & SalesPurchasingSG & AManufacturingFinancial concernR & DProduct Phasing tabuOrganization & Decision qualification Process (Nissan Revival Plan, 2013). The cross-functional teams assessed two pace ideas and proposed four hundred proposals to the executive committee. The plan aimed at growth with increased profits and reduced debts. Business gardening tidy sum of the plan aimed at developing untried- doly products and models, reducing the lead time which could be arrive atd by reducing the product development cycle and order delivery periods as well as the time to start selling in new markets. The plan had to target twenty per cent reduction in bells by the end of the third year. The plan fireed to centralize procurance and to shor x the list of suppliers as well as including services as a buying strategy. The plan also suggested increase the utilization of the manufacturing capacity by shut dispirited three assembly plants and forcing the rest to work in two shifts. The industrial memorial tablet was also changed into a simpler and more than(prenominal) than effective way. Cost reduction was an of import aspect of the plan and for this purpose some(prenominal) action were make such as reducing incentives and stressing more on the precedent of the brand name, closing 10% of sell outlets and opening for longer hours, utilizing the alliance with Renault and employing E-commerce.R&D costs were cut down by leveraging with Renault as well. Carlos has changed the model of the company from existence multi-regional to being a global organisation. That required a global head quarter, worldwide s trategy, alter planning and the global control of some(prenominal) function of the Nissan. Carlos realized that this could not imbibe been achieved without the key asset of the company, its people. For that, he em king the directors for cross-functionality and orientation towards profit. He also introduced compensations for performance which included bonuses and shares options. The opportunity for career forwarding existed for those as well (Nissan Revival Plan, 2013). By implementing this plan, Carlos achieved the goals a year earlier than what was ab initio proposed. He managed to save the company two hundred billion Yen. On the other hand, the plan had an impact on people. 20 one thousand people befuddled their jobs as a result of the cost headcount reduction he embraced and therefore, Carlos was subject to criticism by media in japan and worldwide. Nevertheless, Carlos has been recognized as a drawing card of change whose leadership and management not only turned losses back into profits but also contributed to a morphologic and cultural change inwardly the company. His method and vision has been take by many leadership schools. Therefore, his contribution exceeds Nissan to other credit linees and fields worldwide (Nissan Revival Plan, 2013).Carlos the leaderCarloss personal and career profiles brooked him to be a successful leader. This can be illustrated by analysing different dimensions as suggested by Kotter (1990). Carlos sayed from his give with Renault as a vice president of advanced research to keep an eye on looking at the prospect while creating and executing strategies. An example of this oracle leadership is his empathy to the new generation of cars which runs on electric power as he anticipated that this is the future trend of the industry and wanted Nissan to lead it. He managed to take a shit his followers share his vision and loose the door for them to grow and advance in their career. His revival plan relied on having the cross-functional teams brainwave and share suasions away from the bureaucracy and structural limitations. The plan also suggested a large matter of thoughts to be assessed and presented to the board which reflects his nakedness and automatic to listen to others thoughts rather than directional them to adopt his own (Nissan Revival Plan, 2013). i of the success factors for Carlos is that he believes in having no perception of the organisation or the acculturation before he actually gets overt to it. He wanted to learn by experience I asked people what they thought was going right, what they thought was going wrong, and what they would suggest to make things better. I was trying to attain at an analysis of the situation that would not be static but would cite what we could do to improve the companys performance. It was a period of intensive, active listening. I took notes, I accumulated documents that contained very tiny assessments of the different situations we had to deal with, and I pull up my own personal summaries of what I learned. In the course of those three months, I must have met more than a thousand people. During that time I constructed, sting by bit, my image of the company found on hundreds of concussions and discussions (Ghosn C, 2006 93-94).His leadership created a radical change to the company that lead the company towards restoring its position in the market, a agency that would have seemed to be impossible to many. Carlos also believes in sharing knowledge and experience that may help other firms grow and succeed. This is clearly depicted by the new service introduced by Nissan, the consulting services which allow the transfer of Nissans Production steering (NPW) which relies on Kaizen (improvements) to other firms. Nissan Production counseling is a key ingredient of our success. I hope that you will make it part of yours (Nissan production way, 2013). Nissan consulting services also represents a radical change from a company that adopts continuous improvement theories to a consulting company that help others adopt them. Theories of leadership metamorphose in their approach toward the analysis of a leaders bolt. somewhat of these theories strain on the behaviour of the leader. In other words, they suggest that individuals are considered leaders when they act as such rather that by their personal characteristics. This is a more possible approach than trait theories which assume that leaders are born not made (University of Leicester, 2011 247-254). Lewin et al (1939, cited in University of Leicester, 2011250) identified three styles of leaders, autocratic, democratic, and laissez-faire. We can bet of Carlos as a democratic leader who demonstrated a sound direct of concernment to the team during critical decision making. The cross-functional teams were asked to think, discuss and assess ideas and present a reasonable number of thoughts to the management. This level of engagement to the team boosted their tactile property and improved the quality of the decisions made.Fleishmans (1953 cited in University of Leicester, 2011251) two factor theory of leadership emphasises on two dimensions, consideration and initiating structure. Carlos managed to achieve efficient balance between these two dimensions, allowing employees to communicate their thoughts and ideas and respecting them without losing the lines of responsibilities which are required to manage such a multi-cultural and a multi-national organization. In other words, he stands in the philia between being people-centred and task lie this is referred to by Blake and Mouton (1964 cited in University of Leicester, 2011253), as Middle of the road. Carlos believed that the solution for the companys problems existed at bottom the cross-functional teams and he shared this with them. On the other hand, he set the process, targets and timelines for his plan which represented a high up level of task-orientation.Conti ngency theories suggest that leadership style may vary base on the situation in which the leader works (University of Leicester, 2011255-262).They also relate to various parameters such as the leader, his/her followers and the character of the tasks which the leader is trying to complete. It is clear that Carlos possess many characteristics that allowed him to lead efficiently. He is Lebanese by origin, was brought up in Brazil, got improve in France and has worked in different countries. All of that enhanced his capability to lead in a diverse milieu and subdue the challenge of being one of few non-Japanese leading a Japanese company. His work experience gave him exposure to various areas of the business ranging from business development to top level management including research. This allowed him to bring back Nissan to its financially healthy position and- at the self homogeneous(prenominal) time- make advancements in other business areas.Carlos believed in Nissan as a compa ny, in its people as assets and in Japans goal as a platform. For him to succeed, he had to secure the cooperation of those under his leadership. He had to make them see him as an efficient leader. He believed that this cannot be achieved without bridging the cultural jailbreak between his origin, experience and the new environment he had to work within. He started encyclopaedism about Japan, its culture, language and even the food. He believed in respecting and understanding the culture of these people while trying to make a contribution. I would say even though the term today is not very popular, love the unpolished and love the culture in which you are in. And try to learn about its strengths, dont focus on the weaknesses, and make sure that all the people you are transferring with you are of the same opinion (The transcultural leader, 2013). Carlos benefitted from the culture of Japan. In an interview with MTV channel, he stated that the commitment he and the committee w ill resign if the revival plan objectives were unmet, had been inspired by the culture of the Samurai who would defend his land and would murder himself in case of failure. He realised that importance of commitment to Japanese (Interview with Carlos Ghosn MTV Lebanon, 2012). one of the reasons for his effective leadership in Nissan relates to the record of his mission. It was obvious that the future of the two ally companies depended on his success in leading Nissan out of its crisis. He also time-tested to use urgency as a motivation factor therefore he committed dates for his tasks to be accomplished and held himself as well as the team responsible for achieving them.The Path-goal theory of Robert House(1971 cited in University of Leicester, 2011259) suggests that a leader can motivate his/her subordinates towards reaching the goals by helping them draw a clear path to those objectives and by giving more recognition to members who achieve those goals. When Carlos first forme d the cross-functional teams, the team felt lost as of what is required from them and how to achieve it. Carlos realized this and he invited them to a meeting in which he explained the purpose of forming these teams and his expectations from them. He also promised his directors rewards and incentives for achieving the goals of his plan. In fact, before Carlos came up with his revival plan, he spent some time meeting with people at different levels of the organisation in order to understand the culture and the challenges he was going to face. The establishment of the cross-functional teams allowed him to engage large number of the companys staff in idea generation, reflecting a participative leadership style. As a Chief Executive Officer of the two companies, Renault and Nissan Carlos enjoyed a high level of authority on his subordinates which allowed his ideas to be easily adopted. The leadership of Carlos during crisis is seen as a good example of what thick (1985 cited in Uni versity of Leicester, 2011264) identified as Transformational attracter.He managed to raise the awareness, commitment and devotion among his team. He envisioned a new future of Nissan, broke the frame that existed before him and personally committed towards this new vision. Carlos underscore on team vicissitude and gender equality. Under his leadership, Nissan reached twice the rate of competitors in terms of number of female managers within the company. On gender equality, the CEO says that when he started at Nissan, only one per cent of the top management at Nissan were women. charm that was twice as good as his competitors, he was determined to increase the number of women in management still further. straight off the number of women in management is basketball team per cent, and the objective is to raise that figure to ten per cent. Ghosn says that although such targets are good, its more important to set a lasting, doable trend for women that will prove that diversity d elivers. (The transcultural leader, 2013).Transactional leadership is based on transactions and exchange. It usually occurs in steadfast and predictable situations (Bass 1985, cited in University of Leicester, 2011263-265). Carloss style is more transformational than transactional due to the dynamic and irregular nature of the industry as well as his personal characteristics. We can think of few people who are willing to relocate to a new country whose language and culture were totally new to him and lead a crisis recovery.The notion of a transformational leader has been criticised by Khurana (2002) who believed that transformational leaders can become over convinced of their personal magnetism and may drive the company towards derangement in order to allow a room for radical changes. However, these concerns seem to be invalid in the case of Carlos Ghosn whose interviews and general speeches show a greater emphasis on skills and techniques rather than personal charisma. Although he believes in changes and he directs his team to keep an eye on the horizon, he makes decisions based on rationality. SummaryIn this paper we have analysed the leadership of Carlos Ghosn, the CEO of Renault and Nissan companies. Having joined Nissan in the year 1999, when the company was suffering from a severe financial crisis, Carlos managed to rescue the company and turn it back into a profit generating firm. Carlos presented a successful leadership based on vision, participation, and passion about his employees as well as contribution to the culture of Nissan. We have used different theories and models for this analysis including behavioural theories, contingency theories as well as transformations theory of Bass. In my opinion, these theories and models are complementary rather than exclusive. They can all be used to analyse the leadership model and obtain a better understanding as of what made Carlos a successful leader of a change. Carloss leadership has been the subject of many researches in management and his method has been adopted by many schools. Cross-cultural dimensions have a high importance in leadership. Carlos succeeded in leading people in different countries and organizations that varied in power distance, uncertainty avoidance and differed from his own culture, overcoming what was identified by Hofstede (1992, cited in Linstead et.al, 2009 254) as challenges. Carlos managed to cut the costs by shutting down plants which made many people redundant. Some analysts argue that he could have achieved his goals by a different strategy. The fact that Carlos enjoyed high power being the CEO of both companies raises a question as to whether he would have succeeded had he been the CEO of Nissan only. Wouldnt he have faced additional challenges from the main shareholder of Nissan, Renaut.ReferencesBass, B. (1985), Leadership and implementation Beyond Expectations, New York Free matterBurns, J.M. (1978), Leadership, New York Harper & class 278 Organisational BehaviourFielder F.E. (1967), A hypothesis of Leadership Effectiveness, New York McGraw-HillFleishman, E.A. (1953), The Description of supervisory Behaviour, Personnel Psychology, 37, 16Ghosn, C. 2006, electric switch Inside Nissans Historic Revival. clear Business.Hofstede, G. (1980/1992) Motivation, leadership and organization Do American theories apply abroad, in Lane, H.W. and Stefano, J.J. (eds) global Management Behavior, Boston PWS/Kent.House R.J. (1971), A Path Goal Theory of Leadership, administrative Science Quarterly, 16 (2), 321338Interview with Carlos Ghosn MTV Lebanon, 2012. for sale at http//www.youtube.com/watch?feature=player_detailpage&v=_1Dc7VDQ3yw accessed 29 April 2013.Kotter, J.P. (1990), What Leaders genuinely Do?, Harvard Business Review, MayJuneLewin, K., Liippit, R. and White, R.K. (1939), Patterns of combative Behavior in Experimentally Created kind Climates, Journal of Social Psychology, 10,271301Linstead, S et.al.(2004), Manag ement and Organization A Critical textbook ,Palgrave Macmillan LimitedMillikin, J., Dean, Fu. 2004 The global leadership of Carlos Ghosn at Nissan, Thunderbird International Business Review, 47(1)121137Nissan production way, 2013.Nissan production way. Available at http//bcove.me/pm3yqd9c accessed 29 April 2013.Nissan Revival Plan, 2013. Nissan Revival Plan. Available at http//www.nissan-global.com/EN/DOCUMENT/PDF/FINANCIAL/REVIVAL/ spot/1999/fs_re_detail1999h.pdf accessed 29 April 2013School of management (2011), organizational Behaviour, University of Leicester, 1241-279.Stephen Linstead, Liz Fulop and Simon Lilley, 2009. Management and Organisation A Critical Text, Second Edition. Palgrave Macmillan.The Short History of Nissan Motor Company. Available at http//www.nissan-global.com/GCC/Japan/History/history/index-e.html accessed 29 April 2013.The transcultural Leader Carlos Ghosn, CEO of Renault, Nissan Available at http//knowledge.insead.edu/leadership-management/operations-ma nagement/the-transcultural-leader-carlos-ghosn-ceo-of-renault-nissan-1904 accessed 29 April 2013.