Carlos Ghosn: Multicultural leader as CEO of Nissan and Renault

Résumé du document

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.

Extraits

[...] 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[1], the alliance sold a record of 8.03 million units worldwide 10% increase from the previous year). This result mainly comes from its huge amount of sales in emerging market and in the United States. [...]

[...] 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 identified it as a major problem and found a way to solve it by creating cross-functional teams. “Value, Transparency and Performance“ are his major attributes for effective leadership. Its what he has used successfully in the two companies and he is convinced that any CEO could be successful by incorporating it into its style of management (paragraph p441). Conclusion Carlos Ghosn has been very successful managing Nissan since he became CEO of the company in 1999. In a couple of years he was able to turn the troubled Japanese car company around. [...]

[...] Sectionalism: In big Japanese companies, employees are used to stay with their own kind. They don't like getting mixed up with people from other departments. There is a designer department, a sales department, R&D department, etc. There are no cross-functional teams. It is another big problem that had to face Carlos Ghosn at Nissan. Lifetime employment: Lifetime employment is very common in Japan. It's a specificity that comes from its culture. Samurais for example (the Japanese warriors) were very faithful to their master. [...]

[...] Carlos asked them to build plans and identify areas where Nissan could cut costs. In order to cut costs, Carlos Ghosn had to attack the Keiretsu practice. He opened the purchasing offer of materials to all the suppliers to find the lowest prices. He also forced them to offer discounts up to 30%. This led to a huge decrease of suppliers (from 1145 to 600) and cut 20% of its purchasing costs. Carlos also cut costs and reduced its dept by laying-off 21,000 employees and giving them pre-retirements, golden handshakes or alternative jobs in other plants of the company of the retail outlets were closed and the company separated itself from 20% of its dealer affiliates. [...]