Abstract
Nisan started its operations in 1933 and today it is a leading car manufacturing company. The company operations started just after the World War II. Today, the company has a global presence selling automobiles around the globe. The company is the market leader in engineering capabilities, its technological processes, its productivity and quality management that it had.
The focus of the company has totally shifted in the recent years. The management is focussing on long-term as well as short-term success. Nissan's design had not reflected customer’s opinion. Blue to Nissan's strategy of joining with Kiersten investing Nissan moved towards failure, and it was in a sudden need of good strategic planning. Nissan sought to increase its products to the areas where they were unknown. The company is capitalizing on each opportunity for expanding its operations. They have partnered with many players globally to expand the business. The strategic allegiance with Renault to cater to the needs of European customers is noteworthy in this regard.
Introduction
Nissan has witnessed extensive growth and profitability in the last decade of the twentieth century. However, after joining of Carlos Ghosn, the results of profitability became totally opposite. The company started incurring losses. The profitability vanished. He was the first non-Japanese CEO and was French by origin. Due to the difference in the nationality, he was weak in understanding the cultural norms of the Japanese. It led to many cultural issues among the employees in the company. However, Ghosn paid keen attention to the Japanese values and understood their specification to address the problematic areas in the culture of the company. The decisions of the Ghosn were bold regarding the engagement of the employees. He possessed the skills that could change the position of the company and can take the company from its current position to heights of success. His attributes led to the introduction innovation in the business operations of the company which was a leading factor in the success of Nissan Company (Francis).
Nissan's Strategic Alliances
The future is uncertain, and it is not predictable after the joining of a new person in such a key position. At first, when it started to work and started making different strategies it focused on making Short term plans. It forgot to link its short-term plans with the long-term plans which were a major problem because the company’s focus on the long term planning so short term plans should be linked with the long-term planned
The management strategies aimed at people engagement ensured that the employees should know their work so that they can enjoy their duties. These strategies were aimed at perfect information flow among the employees through the creation of strong intra-organization communication systems. The awareness regarding the roles and their fulfillment also leads to the increased satisfaction and motivation among the employees (Francis).
Quality Management
Quality Management can be achieved by working from each and every perspective of the organization. It cannot be achieved by focusing on a few one and ignoring the others. It can be achieved by giving importance to everything in the organization. Ghosn achieved quality management in the organization by working on both the management and other factors of the organization. He improves the management by linking the management of the top level and that of the lower level. He also focused on the compensation of employees along with this factor. He focused on the culture of the organization and resolved different issues related to that (Francis)
Nissan’s Keiretsu
Ghosn introduced the concept of product development into the product line of the Nissan. He considered that constant development and innovation is a key to becoming competitive and profitable. Therefore, he joined hands with Keiretsu. This partnership was aimed at debt servicing and the incorporation of innovation into the products through new product development techniques. The key area affected by this partnership was the cost structure of the company. Keiretsu not only reduced the cost of the supplies, but it also changed the total resource allocation of the company. The reduced costs led to the increased sustainability of the business. Another important task performed by Ghosn was the restructuring of the hiring efforts. He ensured that hiring techniques are directed at the diversity and motivated workforce. It reduced the costs as well as minimizing the elements of envy among the workforce of the company (Francis).
Nissan’s Compensation System
Ghosn also focused on the compensation system of Nissan and improved it. He opposed the view of seniority by the time spent in the organization. The new compensation system was aimed at valuing the skills of the people. This view is typically against the view of the labor unions and faced much criticism and resistance from the employees. It turned the employees against him, but as it was a good step, it led to the success of organization when talented and capable people came in the top level management of the organization (Francis).
Ghosn named as “Blame Culture.'
Ghosn was from a different culture, so the organizational members at the start were not satisfied with his working techniques because he implemented some of the techniques of French that they use in their organizations. So this was a big culture class for the employs of the organization. However, then after some time instead of using the French policies, he understood the Japanese policies and implied them upon the organization which removes the sense of culture class from the minds of employees (Francis).
Cross-functional teams
Another important reason for the declining profitability was the absence of the control measures. A good strategy never means success until properly implemented and a proper control mechanism is established. It is because Nissan's operations were not synchronized with top management while top management strategies were not passed through the operational departments. It means that the middle and lower managers had no precise idea where the company was moving. Ghosn released this misalignment he implemented a very good program to turn around this structural problem by creating fictional cross teams. The CFCT’s were created to take actions regarding the restructuring decisions. The basic purpose was to support the decisions of the management. This support system became a focal point of the future decisions. The feedback from this system allowed management to come with strategies aimed at the gaps in the operations. The cross-functional teams put their recommendations before the management, and the future decisions were made in the light of those recommendations. The recommendations of the CFTC’s were purely unbiased, accurate and quantifiable figures (Francis).
Turnaround Strategies
Ghosn paid special attention to devising efficient turnaround strategies. The CFTC’s recommended that the company need improvement in the areas of a turnaround as it was a major reason for the declining profitability. It was taken care of, and new strategies improved the overall turnaround of the company. The effect of the new strategies became evident on the profitability of the company and Ghosn announced in last quarter of 2001 that the profitability of the business has improved. The company was again on the road to the growth. The regained profitability after many years marks a spectacular win for Ghosn a Savior and turn around strategist. He by his abilities and quality management led the company towards success gain (Francis).
Conclusion
The crux of the whole matter is that Nissan went from profitable to a loss-bearing company in the initial phase of Ghosn’s service. The obvious reason for this loss is the cultural clash. The details above showed that any organization can be successful if it gets a good management and a person with good leadership skills that take it to the heights of success. It is how’s that everything is possible if you focus on every aspect of the organization and work with dedication.
Bibliography
Francis, Abey. "Case Study: Nissan's Successful Turnaround Under Carlos Ghosn." MBA Knowledge Base. N.p., 2015. Web. 4 Mar. 2016.
