Leadership at Nissan

NISSAN

1. Detail how Ghosn demonstrated the 3 basic leadership competencies (Personal, Team, and Operational) in his rehabilitation of Nissan. What leadership styles (or combination of styles) did Ghosn use at Nissan? (Charismatic, Transformational or Transactional) Support your answer with examples (10)

Answer 1: Ghosn demonstrated all the three basic leadership competencies in his rehabilitation of Nissan:-

1. Personal: (Continuous learning initiative and risk taking, honesty and integrity, flexibility, self –confidence).

Before assuming the position of COO at Nissan, Ghosn met hundreds of people to include employees, union officials, suppliers, and customers etc. to learn more about the company and its strength and weaknesses. His creation of the cross functional teams at Nissan were unusual in a Japanese company, where a team of managers determined change. He along with his executive committee signed a pledge that in the event of a failure to reap profits by 2000, the team would resign demonstrating sincerity and commitment.

1. Team: (Judgement and problem solving, teamwork, creativity, innovation, change communication and influence).

From meeting the above mentioned groups of people Ghosn realized that dictating changes would yield no results. So he created cross-functional teams and gave them responsibility the future action required to revive the company. He did not set himself apart from his employees and did not want to change Japan, but change Nissan.

        He toured the company, shop floors, and explained the employees the need of the hour to be precise, factual and measurable evidence to prove positive results. He also helped the Nissan team come out of depression of a long time by re-establishing their self-confidence that they were capable of competing with rivals Honda and Toyota.

1. Operational: (Responsiveness to internal/external customer planning and organizing, quality results, orientation).

The cross functional teams identified many interrelated problems which matched Ghosn’s initial impressions about the company. The management was in-coherent and without customer focus and stressed only on production and profit. He took strategic steps to increase efficiency by closing five factories and laying-off more than 21,000 employees.  The employees were not given a shock and were explained gradually over a period of time about the issues faced by the organization. The ill effects of job loss and factory closure were reduced by giving them early retirement benefits, using natural attrition, other part time opportunities etc. The suppliers were reduced in numbers and bulk orders were procured, thereby reducing costs.