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Leading a Global Organization

In: Business and Management

Submitted By Emilie91
Words 1695
Pages 7
Case study: Leading a Global
Organization
This paper will evaluate Carlos Ghosn’s approach to turning Nissan around from his appointment of COO at a very critical time in Nissan’s history. After many years of success, Nissan began facing difficulties in the 90s and Carlos Ghosn was invited to help turn the organization around. Both national and organizational culture was very strong in Nissan and made changes difficult, but Ghosn’s management style enabled him to implement the Nissan revival plan (NRP), which turned the company around to profitability.
Background
The case revolves around Nissan and its management. The company was established in 1933 under a different name, but quickly changed to Nissan Motor Co. Ltd.
Following the Second World War, Nissan expanded its operations around the world and grew steadily. By 1991 Nissan was highly profitable and had four out of the top ten cars in the world. The success didn’t last though.
In the years 1993-1999 Nissan had seven consecutive years of losses and credit rating services were threating to lower their status from “investment grade” to “junk”. Part of the problem was the managerial decision to emphasize short-tem market share growth rather than long-term success. Inspired by local Japanese culture and customs, especially keiretsu, Nissan invested heavily in suppliers. This was done to encourage loyalty and cooperation between members of their value chain. Unfortunately, the
Asian financial ended up devaluating the yen from 100 to 90 yes = 1 dollar, a 10 % decline in valuation. Obviously, Nissan were in trouble and looking for a way to turn their business around.
An alliance opportunity came in March 1999, where CEO Yoshikazu Hanawa gained an alliance with Renault, who took a 36.8 % equity stake in Nissan as both parties could see opportunities for the future. Hanawa then asked for Carlos…...

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