Carlos Ghosn: Multicultural leader as CEO of Nissan and Renault
- What are the different management practices that are unique to Japanese organizations?
- Do the management practices followed by Japanese organizations enable a company to remain competitive in a changing global economic environment?
- What steps did Carlos initiate to bring about change in the organization?
- What are the challenges in heading two diverse cultures at Renault and Nissan?
- Evaluate the global leadership skills of Carlos Ghosn
As we have seen in class ?Cross-cultural management studies the behavior of people in organizations around the world and trains people to work in organizations with employee and client populations?. This case study is a perfect example of a good cross-cultural management. In this case study we are going to talk about the Renault-Nissan alliance and the cross-cultural problems that had to face Carlos Ghosn when he took the head of the two companies.
Today, Carlos Ghosn is still successfully heading Renault-Nissan. The Alliance now has five major brands: Renault, Nissan, Dacia, Renault Samsung and Infiniti. As is stated on the Renault-Nissan official blog , the alliance sold a record of 8.03 million units worldwide (a 10% increase from the previous year). This result mainly comes from its huge amount of sales in emerging market and in the United States. It was the third consecutive year that the sales were higher than the previous year.
[...] An interesting anecdote is when Carlos Ghosn arrived at the Nissan headquarter for the first time. He took the elevator with several Japanese workers who knew who he was. Carlos noticed that each time the elevator stopped nobody dared to leave the elevator. When he arrived at his floor and left the elevator, he saw all the employees bow to salute him. They were so respectful that they didn't want to leave the elevator before their superior. The Keiretsu system: It is an inter-firm network system that is very used in Japanese management. [...]
[...] Carlos Ghosn encouraged employees to work together and learn to respect the differences. He organized regular meetings between them and made English the common language to make sure Japanese and French employees understood each other. All those decisions were part of the Nissan Revival Plan (NRP) implemented by Carlos Ghosn. It turned out very successful as the company increased its sales and profits while liquidating its dept. What are the challenges in heading two diverse cultures at Renault and Nissan? [...]
[...] Japan is a very high-context culture; meaning that though and feelings are not explicitly expressed. Therefore there can be some misunderstandings between the two cultures that can't be simply overcome by using the same language. It is also important for them to know all the specificities and practices of the other culture in order to understand the other workers and avoid being disrespectful to them without knowing it. As we have already seen, management practices can be very different from a country to another. [...]
[...] It was seen very badly when Carlos Ghosn started to cut the Nissan workforce. Seniority-based promotion: In Japan, there is often no performance-based promotion. Japanese employees are used to lifetime employment and therefore it is normal for them to be promoted when they have been in the same company for a long time. Business relations: For Japanese employees, their company is a big part of their life and the people they work with are almost considered as family. They are used to go out and party with each other in bars after work. [...]
[...] They don't try to find solutions; they just live with the problems. What steps did Carlos initiate to bring about change in the organization? In order to bring change in the Nissan Company, Carlos initiated a couple of steps: First he set the goals he wanted the company to achieve. To do that he had to make sure everything was very transparent by making employees understand the need for radical changes in the company. His main goal was to make it profitable in a short time period. [...]