Renault-Nissan partnership was a Japanese strategic alliance between Nissan based in Yokohama and Renault based in Paris. The two companies agreed to enter into a partnership on the condition that Renault assumes about $5.4 billion of Nissans liability. The partnership was to make the fourth largest car manufacturer company in the world. The performance of the two great companies helped Renault to reduce Nissans liabilities (Ghosn, 2002). The performance was boosted by the innovative nature of Renault and the fact that Nissan was the best company in engineering of the cars. Carlos Ghosn was selected as the CEO of the two partnered companies to save the business of Nissan and to ensure that the company competed favorably than the competitors in the market. The article is important as it helps the reader to understand the way the partnership between the two companies yielded perfect performance. When Carlos Ghosn was elected as the CEO of Nissan in the late 1990s, the company was making a lot of losses and facing a lot of debts. Carlos was the most important person in engineering the partnership which ensured that the company was able to pay its debts with the resources of Renault.
Japanese management style and work ethic
Japan was a more of a collectivism society where people valued loyalty. The culture considered people as parts of groups nd therefore no one was identified on individual basis. The power distance was high in the Japanese culture. Also Japan was a masculine society where men were preferred to be of more value as compared to women.
Brief overview of Nissan, its history and its problems
Nissan was a car manufacturing company that had been struggling for eight years to turn its profits. The companys margins were extremely low. It was estimated that the company gave away $1000 for every sold car that it sold in the U.S because it lacked brand power. The company had a larger plant capacity as compared to Renault though it was faced with many debts and this was the cause of its low profit margins (Ghosn, 2002). The CEO was left with the turnaround strategy or to take a retrenchment strategy. The latter wass too difficult to be undertaken as it wass only done by the failures. The CEO took a turnaround strategy by partnering with Renault, the company that had large operating capital and assets.
Carlos Ghonss leadership/management style.
Mr. Ghosn was not an autocratic leader, but rather was interested in discussing with his subordinates on how to make the company better off. He was able to make effective decisions by discussing with the companys major stakeholders. Mr. Carlos Ghosn was a leader that valued transparency among his employees. He was a charismatic and transformational leader. He also practiced democratic style of leadership. For instance, he permitted his employees to decide on some of the measures that they wanted to be undertaken to meet the companys objectives (Ghosn, 2002).
This refers to a team comprising of individual of different functional skills towards achieving a common objective. For instance, employees from finance, operations, marketing and human resources. In cross-functional teams, a task is assigned to employees of a multi-disciplinary expertise. Each employee offers a suggestion on a decision to be undertaken by the firm and potential solution obtained after the parties have agreed (Ghosn, 2002).
Carlos joined Nissan when the company was facing a lot of debts and recording small profit margins. The company had a larger capacity but it was not making use of it. As a leader, he had to understand the Japanese culture and later on took a turnaround strategy by partnering with Renault. This helped in reducing the companys liability and increase its profit margins.
Ghosn, C. (2002). Saving the business without losing the company. Harvard Business Review, 80(1), 37-45.
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