Nissan: Culture and Earlier Cg Uses

CM J41 Strategy Execution pic 1. 0 Resume The case is rough the swordplayaround of Nissan in the year 1999 to 2002. Nissan experienced great finances looses for the quondam(prenominal) s withal out of eight eld which resulted in a 22 billion $ debt and an outdated product portfolio with little liquid capital for forward-looking product development. In just 12 months the new COO, Carlos Ghosn (CG), succeeded in routine Nissan into profitability with a new and more(prenominal) than per clayance oriented corporal cultivation. 2. Evaluation of Carlos Ghosns sexual climax to runing Nissan around The over exclusively paygrade of CG is full of success which, I think, is duo to his personal background, his philosophies of management and a little bit of luck. CG has a multicultural background and has proven himself having ability for global lead. In his line of achievement he has learned to manage monstrous operations under adverse condition on four different continents an d speaks five languages. He has a very open and pragmatic uprise towards his surroundings, with this in mind his specialty is improving cost efficiencies, and this has earned him the name Le Cost-Killer.CG philosophies of management consist of three principals. These atomic number 18 transparency, execution and conference which all are essential to father employees structure and direction. His leadership manner is characterized by him creation achievement orientated, firearmicipative, supportive and directive leader. Furthermore a unique quality and vital factor for CG success is in my credence was his implementation of the Cross Functional Teams (CFT) and his approach to cultural combat, which he sees as an opportunity to perform rapid innovation, if paced and channelled correctly. In the above mentioned I state, that cgs approach was a success.In the following four aspects I forget learn to prove this, by stressing out different arguments from the case combined with relevant theory. 2. 1 Resistance to agitate People do not stick out convince but specific things. (Notes lec. 5) Over 50 % of all potpourri initiatives in make-ups fail to succeed and when this occurs, leaders often blame electrical guard. They have that if only people would stop complaining and get on board, all would be fine ( cut through et al. , 2009). But resistance is, in fact, a form of feedback, often provided by people who know more about headic operations than you do.It can therefore be turned into a spirited conversation that gives your change effort a higher profile (Ford et al. , 2009). This could be one of the reasons to why CG set up the CFT. Dismissing the feedback deprives you of potencely valuable information, be you goodwill, and jeopardizes important relationships. If you learn to embrace resistance, you can use it as a resource and find your way to a better solution (Ford et al. , 2009). Resistance, flop understood as feedback, can be an important r esource in improving the quality and clarity of the objectives and strategies at the heart of a change proposal.And, properly used, it can enhance the prospects for successful implementation (Ford et al. , 2009). Looking at the theory applied and the case, I moot that the resistance to change that CG face was inevitable. As I see it one of the main reasons for resistances was due to the close background, however there were several of underlying causes that could bring forth a tenseness and resistance to change at Nissan. One is a more superior general participation that arises when trying to move people, who do not find apparent motion necessary.An early(a) resistance point could be the urge for protecting ones career development, which forwards the intervention of CG was based on promotion on seniority bum and a zero mistake culture, which resulted in general a omit of innovation, a slow decision making and risk adverse mentality. To this CG responded with a change in the career development structure at Nissan, so that the highest achievers got the highest rewards and promotion was based on performance, leading to higher performance, willingness to make mistakes and create an innovation platform.Although these initiatives where not without resistance, because of the promotion of just about unfledgeder leader over older, long serving employees which was in opposition to Nipponese culture norms, CG took the selfsame(prenominal) approach as with cultural differences and saw growth opportunities sooner of problems for the teenage directors since they where challenged in their authority, which gave them growth experiences. As an overall when it comes to turning a fellowship around as drastically as was needed for Nissan it is bound to create some resistance, and that CG new and was prepared for.Such a big change makes the emerging uncertain for many employees and the uncertainty is something many naturally try to avoid, and thereby instinctively becomes resistant. This Combined with a strong Nipponese traditions, an organizational culture that has hindered innovation, adaptability and accountability, and last but not least a Japanese presidency that historically always have bailed out troubled employees, thereby creating no reason for action, and a smell outing of no urgency, only made the resistance worse.All this being said, I am convinced that CG handed the resistance to change ideally. He didnt as Ford el al. points out keep open any possible reason for bankruptcy on resistance, and thereby risking miss opportunities to streng and then operational outcomes. 2. 2 Organizational culture A part of the organizational culture at Nissan was the sub optimization with counselling only on each individuals own department with little regard for catch the company as a whole. This including other aspects of the organizational culture resulted in CG detecting a series of problems.From management side, the virtually fundamen tal ones was the omit of vision and ignoring customer voices. Furthermore he identified problems with, overlook of empower profit orientation, insufficiency of champion of urgency, no shared vision, insufficient focus on customer and too much focus on competitors and lack of cross functional implementations. As a consequence of these findings CG organized golf club CFTs for tackling Nissans cultural problems, and allowing the company to develop a new bodied culture from the best elements of Japans national culture.Working together in the CFTs helped managers think in new ways (innovation) and challenge the existing practices (efficiency). CG explained to employees at all levels of the company that they them selves possessed solutions to Nissans problems, giving them a sense of responsibility and ownership in turning Nissan around. It was neither top-down nor bottom-up. It was twain top-down and bottom-up. CG could just have formulated solutions by himself and ordered them t o be implemented by senior managers, but he believed in the managers and employees in Nissan, nd he was good at showing them this. As mentioned in 2. 0 he believed that if one just dictated changes from above, the effort could backfire, undermining team spirit and productivity. The CFTs was a way to minor the resistance to change and involve and run middle managers who had detailed information about the companys fooling business and had the potential to come up with solutions to the companys problems. point before taking over the position as COO, he had manufacture analysts against him, whom anticipated a culture clash between the French leadership style and his new Japanese employees.This could also have affected some employee attitude towards CG in a negative way beforehand. Besides this I am convinced that many parts of the Nissan organization did not feel very good about having CG changing things as drastically as he did. A labeling from the media as a gaijin, a foreigner and a reduction of 21,000 occupations, will inevitably create an uncertainty and therefore opponents among twain lower level employees as well as higher in the hierarchy.Also the new employee advancement strategy, which challenged the traditional career advancement, created some negative emotions towards CG among the older, agelong serving employees, since they were no longer automatically granted with a career advancement for long time service in the company. Furthermore, layoff of several of managers who did not meet targets regardless of circumstances and the demotion of Vice President of Sales and merchandise in Japan presumably created resistance and discontent.But I do believe that CG was successful in enlisting most of the organizations support over a fairly short period of time, though his leadership style, where his visibility and desolation to taking recommendations & opinions of Nissan people seriously. Another reason is the respect for leadership that is underlying in most Japanese. This made his approach to leadership even more effective. Also the delegation of responsibilities to the CFTs helped getting the support of middle and lower levels, so he could focus his attention on top management. 2. 3 field of study cultureThe national culture has without a doubt played a large part in the outcome of CGs attempt to turn Nissan around. On one hand it hindered change because of the sense of security the giving medication created and its rigid approach to decision making and career advancement. On the other hand the respect for leadership made it easier for him and his CFTs to have an impact on the organization. The cultural differences between CG and the Nissan organization was profound because he had never been undefendable to Japanese culture before, but his approach to the culture ensured that he was in full aware of the issues that could arise.He stated that he wanted to discover Japan by being in Japan with Japanese people. That shows hi s humble and respectful approach to their culture, which I think benefited him allot and which I in the following will show some examples of. The respectful approach to the Japanese culture compel e. g. CG to pay extra attention on the empowerment of employees. As mentioned, Japanese business culture is characterized by a search for conscientiousness, corporation, group harmony, and an shunning of mistakes. This all leads to a delay of decision making and a lack of responsibility.The introduction of CFTs was in my opinion a strategical stroke of virtuoso because it was partially an attempt to break with the inconveniences of Japanese culture without harassing the fundamentals and partly because people in the CFTs got a birds eye location of the company and it gave them a sense of ownership and responsibility, which was necessary to turn things around. ethnical conflict could, in my opinion, easily be a root to resistance to change but as mentioned earlier CG uses and see cultura l conflict as something positive if handled correctly, which also is in line with both Ford et al. and Dent et al. iew of how resistance to change should be handled (Ford et al. , 2009) (Dent et al. , 1999). By introducing the CFTs CG also avoided the failure that many companies often do in the execution of their strategy, which is going instantly to the structural reorganization. Instead he focused on some of the most powerful drivers of effectiveness decision undecomposeds and information flows (Nielson et al, 2008). The CFTs had in their ability of being cross functional all the information they needed to take the right decisions and by encouraging the members to come forth with their ideas and take risks the effectiveness of the CFTs was even greater.CG also changed the traditional Japanese compensation system to a more Western approach with possibility for employee advancements based on performance instead of seniority. This greatly empowered the talented employees, who was much needed in the volte-face but was also a source of conflict between young leader and older, longer-serving employees. But again CG saw a possible conflict as a positive thing. these tests of authority were growth experiences for young managers.This shows again his personal ability to turn challenges into something good and productive. 2. 4 Luck and measure There is no doubt that CG was lucky. His timing was impeccable as the bankruptcy of Yamaichi happened when he took office as COO in Nissan. The misfortune of the major(ip)(ip) financial house in Japan helped open the eyes of the employees in Nissan. The employees realized that lifetime employment was no longer a ingenuousness and that they had to do their own part to secure the companys succeeding(a) and thus their own jobs.CG, to his credit, used the Yamaichi example whenever he could to continue to travel his employees, repeating that their fate would be no different if they did not gear up all of their effort into fig uring out, and then executing, the best way to turn Nissan around. By repeating the narrative CG paved the way for a major organizational and cultural change that otherwise would have been hard to knife thrust through. If people do not see why change is necessary, then motivation for change will be nonexistent.Moving a huge organization simply by brute force is an impossible task, but CGs strike of luck created a powerful momentum that diminished potential resistance to change. Without this, CG and his CFTs would probably have faced a much more daunting task if the turnaround had taken place few years earlier. But it was not all luck. CG a used the bankruptcy strategic in the meaning of unfreezing the organization in Lewins words or as Cotter expresses it creating a burning platform. By telling the story over and over again he made the organization and all(prenominal) employee ready for change.When all(prenominal)one was ready CG created a vision that was tangible, concise, and easy to relate to for the employees. It is not enough to create a great vision. It also has to be communicated efficaciously to the organization. CG was aware of this as the quote below shows He was the first manager to actually walk around the entire company and meet every employee in person, shaking hands and introducing himself. CG was prepared to walk the talk himself and did so by taking the lead and thereby showing the employees the way. 3. 0 terminal All in all I think CG did an incredible job turning Nissan around in a very short period of time.Inspired by the voting we have done in the class, I would give him a 12, the highest mark. As a non-Japanese COO he managed to overcome Japanese cultural obstacles, as well as effectively transforming a bureaucratic organizational culture and turning a large continuing shortage into a profit within 12 month. One could question though whether his successor will be able to continue what CG started or if he needs to find his own way. Either way, CG has a justifiable interrelate for the future of Nissan. They might be on the right path, but they are still far from reaching their goals.