Case 2.

3: Carlos Ghosn: Leader without Borders

Executive Summary
Analysis of the case study related to the leadership style of the Carlos Ghosn who is a current
Chairman and CEO of the Nissan provided a deep insight of the leadership strategies used in the
restructuring of the organizational culture of the Nissan. Organizational culture of the Nissan was
too much ineffective and it was not capable of delivering policies and decisions for the
management of the business activities of the company. There was also lack of consensus decision
making process, and conflict among the workforce and management of the company was also
rising. Management of the company was also not capable of handling expansion strategies and
dealership of the company in the different countries of the world.
When Ghosn joined company in 1999, he reshaped the infrastructure of the company. He also
provided effective business strategies for the management of the different business activities and
expansion of the business across the globe. Ghosn sis also considered as a leader without borders
because he is managing the diversity in the culture of the organization in an exceptional way that
is motivating the employees of the company to work for the achievement of the shared goals and
objectives of the company.
Introduction
Nissan is one of the most famous company of the automobile industry, which was established by
Yoshisuke Aikawa in 1933. Main objective of the company was manufacturing and selling of the
auto parts and small Datsun cars in automobile market. In 1935, company started exporting its
vehicles to the different countries. As when world war II started, Nissan changed its product line
from the manufacturing of cars to the manufacturing of the military trucks so that changes in the
demand pattern would be met. Nissan attained a competitive edge in automobile industry till the

end of 1960. At that time one of the main competitor of the Nissan was Toyota. Nissan also
merged with the Prince Motors during 1966. At the end of 1980s, company faced a decline in its
sales due to decentralization in its production process. Executive management of the company
changed structure and culture of the organization to enhance its productivity and profitability.
Analysis of the case study i.e. Case 2.3: Carlos Ghosn: Leader without Borders is based on the
study of the different approaches of effective leadership style used by the Carlos Ghosn who was
assigned the position of the chief operating officer of the Nissan. As company was in a
continuous loss for seven years so it was necessary to change the business strategy of the
business to achieve a sustainable position in the automobile industry. Ghosn was assigned the
responsibility to regain the financial and economic stability of the company within a period of
two to three years. So Ghosn applied different effective and efficient business strategies to rescue
the company from downturn. So this case study is also evaluated to obtain a deep insight of the
approaches used by the Ghosn in the business environment of the Nissan. (NAKAE, 1985)
Nissans Organizational Culture Prior to Ghosn
Nissan was one of the well-known company of the automobile industry after the end of second
world war as at that time it expanded its business operations on global scale. Company was also
using advanced technology and techniques of the engineering, and it also used advanced plants
in the production of the vehicles and an effective management of the quality was exercised. But
goodwill and productivity of the company could not persist on a continuous basis and in early
90s company faced an adverse economic downturn and lost it position in automobile industry on
global scale. There were production plants of the company that were installed at the different
locations. And their operations effected as a result of the downfall in the revenue and economic
activities of the company. (Klimas, 2016)

Organizational culture of the Nissan was enriched with the different types of the values that were
focused on the expansion of the operations of the company, and to increase its product line.
Management of the company was more focused on the attainment of the short term growth rather
than making strategic decisions related to the long term growth objectives. Corporate culture of
the company was not based on strong values that would affect its planning and decision making
process. Communication channels used in the business environment of the company were also
affecting the achievement of the goals and objectives of the company. Top management of the
company was not capable of providing a cohesive working environment to enhance business
performance. Use of the strategic decision making was also neglected in the corporate culture of
the Nissan that resulted in the failure in the operations of the company at different locations in
the world. Expansion of the business was not based on policies that would provide long term
effective results. Organizational culture of the Nissan was not capable of providing a sound
environment for the success of the company after the end of second world war.

(Leonard,

2004)
Different types of the cultural issues were also existing in the company like there was lack of
consensus decision making process. Informal meetings were also increased which did not
provide any useful results. Use of the experience and knowledge was also lacking and there was
no promotion of the innovation in the organizational culture. Finger pointing was also favoured
rather than accepting the work of the labour. Some of the traditional business practices of the
Japanese were also exercised at the workplace that provided certain barriers in the use of
innovation and management of diversity. Product orientation was also lacking and there was no
clear vision of the company that would provide information about the goals and objectives of the

company. Coordination problems were also rising in the culture of the Nissan. Bureaucratic style
of the leadership was prevailing in the organizational culture.
Problems faced by Nissan in its Business Environment
Nissan faced different problems in the organization of its business activities that created a
decline in the revenue and profitability of the business. Managers of the company were also not
able to analyse the performance of the company as they were more focused on the achievement
of the short term objectives of growth of the company. They also increased the equity of the
suppliers by investing retained earnings in the them, instead of reinvestment of the earnings in
the production of the new products of innovative and unique designs. It also declines the
competitive position of the company in the market. (Leih, 2014)
Asian crisis had also a great impact on the failure of the business operations of the company as
yen was devalued as a result of these crisis and Nissan was gone at the edge of facing
bankruptcy. Financial needs of the company were not fulfilled and inappropriate business
strategies created a decline in the goodwill of the company. Nissan was also facing huge debts
due to the lack of the proper funds and revenue. Financial distress in the business environment of
the company was due to certain reasons like there was no clear and proper orientation of the
profitability of the business, opinions of the customers were not considered and their demands
and wants were ignored by the management of the company, lack of the customers orientation,
more focus on the achievement of the competitive position on the automobile industry by
chasing different competitors, diversity was not encouraged in the working environment of the
company and it led to the non-existence of the different hierarchical lines in the company, sense
of urgency was also ignored and shared vision and mission of the company was also nit devised
that would be capable of achieving long term results. (Gill, 2012)

Marketing strategy of the company was also not aligned in an appropriate way. And investments
in the different overseas projects was made in an aggressive way without using strategic planning
and policies. There were also increasing clashes and conflicts between the management of the
company and its workforce. As business expansion strategies were ineffective so these created a
decline in the sale of the products and also in the share value of the company. Some of the issues
and problems in the business environment of the Nissan were solved in the era of the Ishihara
and Kume.
Ishihara planned a proper business plan for the company and tried to improve the financial
performance and position of the company in the market. Global Ten plan was formulated by
him and it helped him to attain 10 percent shares of the company in the global market of the
automobile. He also undertook different overseas projects and invested in them to improve the
production of the company. But his era did not contribute in the achievement of the planned
success as there were ineffective marketing strategies and increasing conflict between the
management and the workforce. So achievement of the success in the organizational goals and
objectives was not observed. (Anitha & Begum, 2016)
Kume provided some of the effective business strategies that were capable of improving the
performance of the company. He provided corporate philosophy and principles to improve the
performance of the different business activities of the company. He considered customers
satisfaction as a prime focus to improve the production of the vehicles according to their choice.
He also focused on the expansion of the customers. Production of the innovative and advanced
products capable of meeting the requirements of the new technology was also considered by him
in his business plan. Improvement in the communication with the global market was also focused
in the corporate principle of the kume. It was also stressed by the kume to consider global trends

to improve the organizational culture and growth of the company. Active development plan
capable of meeting the challenges of the globalization was also provided by him. He also
expanded the dealership network of the Nissan in the world and helped in the production of the
cars of new designs.
But at the end of the 90s, bubble economy of the Japan burst and it led to a rapid and huge
decline in the performance of the company and financial instability. It created such situations that
led to the failure of the corporate principles and philosophy of the Kume. Huge debts were
brought in the business and crisis of the Nissan existed till the end of 1999.
Dealership problem was one of the deadliest issue that played a great role in the achievement of
the crisis in the business environment of the Nissan. Monetary incentives that were provided to
the different dealers of the Nissan were too high and these were not capable of sustain the
customers of the company. There was no proper plan to incur different cost related to the
dealership operations. Huge costs were incurred to improve dealership relationships. Such a type
of situation led to the accumulation of the huge amount of the debts in the business environment
of the Nissan. Company also introduced number of the profits that were capable of achieving a
high revenue but it could not persist for a long period of time and company was not
manufacturing products that were attractive to the customers. Brand identity of the Nissan was
also under estimated and it effected the global operations of the Nissan. There was $ 20 billion
debt of the Nissan it was creating issues of the bankruptcy for the company. Recession in Japan
in early 90s was also on the main cause of the decline in the growth of the Nissan. Complacency
was more promoted in the organization and cross regional and cross functional communication
was also lacking. Different designs of the cars were also out of touch and they were not meeting
the needs of the changing trends of the automobile industry. Degree of the bureaucracy exercised

in the working environment of the company was also too high. (Yoshikawa, 2014) Nissan was
also not capable of competing with the Toyota. Only few of the resources of the company were
used by the production department of the company. Economic stagnation was also increasing in
the business environment of the Nissan. Strategic future of the company was also not considered
by the senior management of the company. Cost control was also not exercised and it led to the
decline in the performance of the company.
Decision Making and Teams Establishment in Nissan Before and After Change
Decision making process was too much ineffective and lacking business strategies in the
organizational culture of the Nissan and led to the decline in the growth of the company. Team
development and establishment was also carried out in an in efficient way that created an adverse
situation for the promotion of the business activities. Organizational culture was also lacking
coordination and communication due to which there was no harmonious working environment in
the company. Clashes between the workforce and management were also rising day by day and
there was no proper system for the management of the conflict. Shared decision making was
prevented and only dictatorship rule. Strategic decision making process was also neglected so
there was no appropriate plan for the achievement of the organizational goals and objectives in
an effective and efficient manner. Crisis management was also lacking. Risk taking was not
promoted and decision making process was also too slow that there was lack of an efficient and
motivating working environment. (Edward Nissan, 2012) Different obstacles in the working
environment of the Nissan made its performance too slow and as a result its revenue also
declined. Dealership program of the company was also facing lot of issues and management of
the Nissan spent a lot of amount on the expansion of the business locations. Nissan also faced an
economic downturn that had an adverse impact on the financial position and performance of the

company, and it also led to the financial instability. Team development at the workplace of the
Nissan was also facing lot of problems due to the clashes between the management and labour.
As team development is an effective factor to increase the performance of the company but
development of the team was facing lot of problems due to the mismanagement of the company.
Decision making process was also too much ineffective as there was no shared decision making
process and strategic decision making process that would provide a strong platform for the
management of the activities and for the expansion of the business at different locations.
Company also lost its competitive position in automobile industry due to the ineffective policies
of the management. (Stuart, 2013)
When changes in the business environment of the Nissan implemented, an improvement in the
performance of the business activities of the company were observed. After building strategic
alliances with the Renault, Nissan adopted an important combined strategy based on the bear
model that was Theory Economic and Organisation Development. Coexistence of this strategy
improved provided a favourable environment for the performance of the business activities and
for the motivation of the employees. After the implementation of the change, Nissan also
observed an effective and efficient team development process that was capable of collaborating
and communicating according to the goals and objectives of the company. Decision making
process was also improved after the implementation of the change as shared decision making
was promoted by considering the management of the diversity at the workplace. Organizational
culture of the Nissan was also improved that it was capable of enhancing the values of the
organization that were embedded in the vision and mission statement of the company. Change
implementation was occurred due to the effective leadership style of the Carlos Ghosn who
revived the business plans of the company on the basis of the strategic decision making process.

Team development was more focused and factors motivating employees were also considered. (J
H Wesseling, 2013) Team development process was based on the shared decision making
process, effective communication and collaboration process. It also provided a cohesive working
environment that played a vital role in the achievement of the shared goals and objectives of the
company. Decision making process of the Nissan was also changed from the authoritative style
of the leadership to the consensus based decision making process. Effective and efficient
development of the team and shared decision making process also improved resource
management and diversity management.
Leadership Style of the Ghosn and Nissans Organizational Culture
Carlos Ghosn is one of the renowned leader who is current CEO and Chairman of the Nissan.
And he reshaped organizational structure of the Nissan on the basis of strong business strategies
that helped it to attain a competitive edge in the automobile industry. Carlos Ghosn spent a lot of
his time in attaining cultural awareness on global level. He also spent 18 years of his life with the
Michelin. He also joined Renault in 1966 as an executive vice president. He joined Nissan in
1999, and remains there as a COO. Strategic alliance between the Renault and Ghosn was one of
important step in the history of the automobile industry that was the results of the efforts of
Carlos Ghosn. Both companies entered in a strategic alliance in 1999. Ghosn identified all the
problems faced by the Nissan and provided a strategic policy to reshape the culture of the
organization. Management of the philosophy was one of the important step of the Ghosn that he
helped him to implement change in as successful way. (A. Kompalla1, 2012)
Different cross functional teams are also developed by the Ghosn to achieve sustainable growth
and development of the company. Plant closures and layoffs were also carried in an effective way
that company achieved success in a minimum period of time. Ghosn provided a Nissan Revival

Plan that was based on the keirestu partnership, reorganization, evaluation of the performance,
and advancement of the employees. He also implemented Nissan 180 in the culture of the
organization. Ghosn leadership style is based on the shared decision making and he is exercising
democratic nature of the policies. His leadership style is very effective as it is customers and
employee oriented, and it provided a higher level of the motivation to the employees of the
company to work for the achievement of the shared goals and mission of the organization. Ghosn
policies were more focused on the production processes and product line as compared to the
customers because it was a basic to attract a large number of the customers in the automobile
industry. Product portfolio improvement is also one of the plan of the Ghosn. Risk taking and
employees attitude to consider risk factor is also promoted in the business environment of the
Nissan. (Sohvi Leih, 2014)
Leadership style of the Ghosn is achievement oriented, participative, supportive and directive.
Nissan increased its profitability to a greater extent under the leadership style of the Ghosn.
Different types of the obstacles in the communication process are also resolved by the business
strategies of the Ghosn. Designing various cross functional teams helped organization to improve
the management of the diversity. Some of the fundamental principles of the management that are
used by the Ghosn are transparency, emphasis on execution, and effective communication
process. Leadership style of the Ghosn is too much encouraged by the employees and
management of the Nissan. People at Nissan have a great respect for the culture of the
organization, they are more focused on the career development and opportunities, credit for the
success of every person is also provided, acceptance and participation in the management
process is also encouraged, and embracing new ideas is also motivated among the employees of
the Nissan. Support of the employees is considered by the Ghosn in such a way that they are

capable of moving in the whole company, meeting with all the employees, discussion sessions
and sharing of the new ideas and information is also promoted. (Ren Bohnsack, 2015)
Addressing different issues of the middle and lower management to the top management level is
also easy in the organizational culture of the Nissan. Recommendations and opinions of the
people are also regarded and used in the business environment. Management of the cultural
diversity in an effective way to increase the collaboration and communication among the
employees is also an important effort of the Ghosn that also helped in the expansion of the
business at different locations on the globe. Dealership strategies and export policies of the
Nissan are also devised by Ghosn by considering changing trends of the globalization. He also
provided a platform for the achievement of the competitive edge in the industry of the
automobiles all over the world. (Mark E. Mendenhall, 2000)
Strategic alliance between the Renault and Nissan is based on respective and common objectives.
Respective objectives of the Renault are to improve the quality of the products and to
internationalize its products. Respective objectives of the Nissan are to reduce the costs of the
production and also to reduce the increased debt. There are also some of the common objectives
of the Renault and Nissan are economies of the scale, know-how of the technology and effective
leadership qualities, and also providing attractive products and services. Strategic alliance of the
both companies helped in combining the strengths of both the companies, and this strategy of
using potential synergy provided a win-win approach for the orientation of the results. Autonomy
of the company was also preserved and it helped in the effective identification of the brand.
Value and quality of the products was also considered according to the marketing segment.
Achievement of the greater value of the operating profit was also an important objective of the
strategic alliance between both of the companies. Some of the important levels of the corporate

culture introduced by the Ghosn are physical settings and observable symbols. Industry
dynamics are also considered by the Ghosn that are based on the achievement of the
competitiveness in the industry. Five forces of the porter are also considered and a mature
industry life cycle is also introduced in the business environment of the company. Different types
of research projects are also introduced in the company, and further expansion of the market of
the Nissan is also an important strategy introduced by the Ghosn. Restructuring policies
introduced by the Ghosn were based on the competitiveness and profitability. (Steven H.
Appelbaum, 2009) Partnership orientation was also changed by the leader and a flexible working
environment is provided to the employees for the operations of the business.
Conclusion
Strategic alliance between the Renault and Nissan is one of the greatest platform for the
promotion of the automobile industry in an innovative way. As Nissan faced different types of
the crisis inn its financial and economic environment, and there was also mismanagement of the
conflict and diversity in the company that also led to the decline in the performance of the
company. Different strategies of the Nissan related to the dealership and its expansion at the
different locations also failed. And leadership style exercised in the business environment of the
company was also not capable of managing different issues at the workplace and it did not
handle roles and responsibilities in an effective way. During the initial years of the establishment
of the Nissan, its performance and management style provided a sustainable position to the
business of the company. And it also helped company to attain a competitive position in the
automobile industry.
Company faced different types of the issues in the achievement of the goals and objectives of the
organization after the start of the second world war. And these crises ended till the end of the

1999. When Carlos Ghosn joined Nissan in 1999, he changed the business strategies of the
company and improved the financial performance of the company and also enhanced its
economic stability. Leadership style of the Ghosn is participative and supportive, and he
provided effective strategies for the management of the diversity and conflict in the culture of the
company. Ghosn also provided a clear vision and mission of the company and provided plans
and policies that are capable of achieving organization goals in a planned way. Ghosn leadership
style provided a strong platform to the Nissan to attain a competitive edge in the automobile
industry and to provide high quality products.

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