Introduction
The case study of Carlos Ghosn in relation to his management of the partnership between Nissan and Renault illustrates the wealth that could be derived from cultural diversity if buoyed with proper and positive management. Indeed, as the study notes, both companies were faced with unique and different problems but needed the synergy and diversity present in either of them for survival and growth. However, the leadership and managerial practise stands out as the most critical in such cases. It should be noted that Nissan had indelible and traditional Japanese set up being a Japanese company while Renault having been established in France, had grown to embrace and practise French ideals only buoyed by other European cultural practises in business. The case on Carlos Ghosn shows how these two diverse approaches can be reconciled with successful outcomes admired by all in the business world. This paper would highlight the issues, undertake an analysis of these issues and identify the alternatives pursued within the organisations and finally make recommendations that it considers of beneficial bearing on the companies’ futures given the continuity of business even after the scathing global financial meltdown.
Issues
The case study presents a number of issues that faced and continue to confront the leadership of Ghosn. Ghosn faced a sceptical reception at the Nissan Company in Japan. This was essentially due to his French origin. The Japanese were apprehensive of the leadership and management of a European in a Japanese setup. This played out on his maiden trip to the company. What he witnessed at the lifts illustrated the deep cultural divide that would need to be addressed. In addition, the fact that the Japanese had a different cultural practise at the work place was from the onset an issue necessitating action.
Secondly, Ghosn knew nothing about Japan. He came full in the knowledge about Renault from where he had served for several years but with little to no knowledge concerning Nissan. It should be appreciated that the company (Nissan) was deeply in debt having posted losses consistently in the last few years preceding the arrival of Ghosn. It was going to be uphill task overturning this situation by someone who knew close to nothing about the culture of Japanese. The wise decision not to carry out prior research on the culture explained by the fact that he was not in the habit of forming pre-notions goes deep to show the positivity in Ghosn despite his ignorance of Japan which was indeed an issue.
The other major issue perhaps could be seen in light of the fundamental managerial culture practised at Nissan as compared to the practise at Renault. The reconciliation of the two cultures was evidently going to be difficult. It should be appreciated that Renault practiced European style of management in which it management incorporated more of the employees’ point of view in the business operations. In Japan, employees had adopted to the culture of silence. The views from employees could not find their way to the management. In fact, it is noted that Ghosn had a difficult time bringing on put the employees to the new culture of contribution. He had to come out strongly and illustrate to the group that the company needed to approach issues and circumstances more cohesively. This approach mirrored the practice at Renault where employees were allowed avenues to put through their suggestions and convince the management that their ideas were viable. One thing Ghosn succeeded in doing was making these employees own the process. They would be allowed brainstorming sessions in which they gave their positions on matters and equally suggested solutions.
Another outstanding issue Ghosn had to face was the need to create a responsibility culture among the managers. Ghosn had observed that the managers had not taken the failure of the company within their strides. To them, the failure was attributed to poor industrial performance, bad economic times, among other external causes of business failure. Ghosn had to make the managers see the bigger picture. He had to show and prove to them that the failures were out of internal lapses that needed quick fixing. He also had to create in the management and by extension the employees a sense of urgency in reaction to their failures. Once this was achieved he would be in the path towards progress.
Finally another issue that confronted Ghosn was the need to tackle the indifference and incoherence among the various professionals. As he noted when different professionals were put together to work, Japan lost its ability to perform effectively. He had noted that a multifunctional approach was frown upon at the workplace and departments desired to work autonomously and discharge their duties independently without sharing and working in groups. This portended a big problem to Ghosn who preferred a multifunctional approach and knew the positives of teamwork and collective action. He was set to reduce the practise of blame game where department shifted blame from one to the next.
Analysis
The managerial and leadership matters facing Ghosn were largely multicultural and to some extent the financial woes of the companies. It should be noted that the fact that Japanese and European managerial cultures was being blended was the being put to test for the first time. In addition, Ghosn took over the reins at Nissan when the company was posting poor performance and was wrought with debts eating into its cashflows. The fact that he was from a culture alien to Japanese was equally a tough challenge. However, the approach he assumed was lauded given the state of affairs. He insisted on turning the company around and attempting to bridge the gap between the company and Renault but was careful enough not to discard its cultural identity. Ghosn’s belief that culture needed to be accepted and capitalised on instead of frustrating one in recognition of another informs the success that he posted during his maiden tenure at the helm of managing the company. In equal measure, it should be appreciated that he effectively managed to win over scepticism which was soon replaced by hope and adoration. Finally, the application of the synergies aided in many ways in cushioning the companies from major setbacks effectively making the partnership a success even in the face of a cultural divide.
Alternatives
Ghosn had his own approach in solving the issues facing the organisation. In less than two years, he had succeeded to offset the debt levels and increase the sales. He had employed a different managerial approach in which the employees’ voices were welcome, the manager was no longer a commander but a leader and the suppliers had to cut down on their excess costing. While his approach were welcome and effective towards addressing the issues, one still could consider another set of alternatives to solve the managerial issues.
The company ought to have started by reorientation and retraining of the departmental managers. Ghosn should have had his managers visit Renault premises and observe the European approach to management of business. He could then have domesticated the European approach to the Japanese context. This would involve the deliberate creation of matches and benchmarks borrowing from the Renault concern. While implementing this approach would have been difficult and would be faced with more resistance that Ghosn’s muted approach, it would have effectively reconciled Renault and Nissan and enabled perpetuity and succession leadership even with the exit of Ghosn. This is because this approach through the domestication would have brought Nissan in consonance with Renault consequently occasioning a smooth progressive path. As it stands, the mechanisms put in place by Ghosn depends on the leader at the helm for success and the successor of Ghosn may lack the principles, ideals and vigour to follow them religiously.
In addition, nothing prevented Ghosn from embracing the management by agreement form of management. Since the culture of the Japanese was rather rigid and necessitating an individualistic approach in operations. Ghosn would have taken advantage of this opportunity and set up a mechanism in which each employee would agree with the manager on a set of objectives to be attained. In this way, each employee would collectively yet separately worked for the common good of the company while still retaining their cultural practise as to work.
Finally instead of closures of plants which had created bad blood between him and the employees, some managers and even the board of directors, Ghosn could have opted for an expansive production that would utilise the plants to 100% maximum. This it could do by ensuring the sales are increased while maintaining the production plants. This way no employees would be reassigned or retired early as the culture of Japan was in line with permanent employment. Employing this approach as well as the previous one on management by agreement would mean he was true to his remarks the in the partnership, cultural identity was to be retained and not frustrated in favour of others considered seemingly superior.
Recommendations
Given the prevailing situation at Renault and Nissan companies and the relative state of economy, it is essential that Ghosn fully realises his doctrines and management styles before exit. Like he has started doing, he has to fully demonstrate to the world and the companies in particular that cultural differences should not necessarily frustrate business operations and that the buck stops with the employees and the management. It should be his and the management’s objective to develop a succession structure that believes in their approach and managerial styles and would continue to realise this import even after the exit of the current management exit. In addition, it should be appreciated that cultural identities are not cast on stone and can softly be twisted and blended together with other approaches to realise business overall objectives. This should inform the mentalities of the current managers in global business in pursuit of success.
References
Deresky, H. (2013). International Management: Managing Across Borders and Cultures, Text and Cases. New York: Pearson College Division.
Hayton, J., Biron, M., Christiansen, L., & Kuvaas, B. (2012). Global Human Resource Management Casebook. New York: CRC Press.
Magee, D. (2010). Turnaround: How Carlos Ghosn Rescued Nissan. New York: HarperCollins.
