Introduction
While many consider leadership and control similar processes in organizations, Carlos Ghosn, the chairman of Renault and Nissan, proves the importance of differentiating them. Instead of relying on some theories and empty promises, this leader shows how to solve real problems and achieve the desired results, even if a high price must be paid. His contributions to the recovery of Nissan, known as the Nissan Rival Plan (NRP), and a merger with Renault have become powerful examples of successful motivation and collaboration based on transparency, truth, and action. Ghosn’s work has its benefits and drawbacks, along with all leadership styles. This paper will examine the common issues, solutions, barriers, and reflections related to the NRP and the impact of upward communication and emotional bonds on Nissan employees.
Issues
Despite the intention to promote its products and services across the global market, Nissan faces problems that affect its reputation and must be solved quickly. Although executives changed the brand name and added drifting options with little technological infusion, Nissan continued experiencing a long-lasting decline and no flexibility in its supplier relationships (Spector, 2013). In addition, the challenging issue was related to a high level of competition introduced by Honda and other well-known American companies.
Nissan needed to understand how to deal with the situation when sales declined, and costs did not change (Spector, 2013). Ghosn, invited to manage change and improve leadership, saw the challenge of the discrepancy between what was professed and what was done (Spector, 2013). Therefore, his main idea was to offer a novel strategy and start from the top.
Proposed Solutions
At the moment of the Renault-Nissan merger, Ghosn had several critical ideas and was ready to propose several solutions, addressing his brutal but effective organizational standards. First, he believed focusing on performance according to the already established business objectives was necessary to avoid unnecessary cultural disputes and promote great opportunities (Spector, 2013). Second, Ghosn wanted to “change people rather than to change persons” and ensure leaders “do what they say and say what they do” (Spector, 2013, pp. 166-167).
Finally, his proposal was rooted in three strong principles of working fast, assuming nothing, and gaining respect, which resulted in three significant changes in Nissan: English as the official language, transparent publicity, and cross-functional management (Spector, 2013). It was important to underline the worth of collaboration at all levels and help managers recognize and solve the existing challenges together.
Upward Communication
One of the evident strengths of the Renault-Nissan Alliance and the NRP was the recognition of upward communication. According to Spector (2013), this process implies a regular flow of information from lower to higher organizational levels and allows employees to discuss the problems and understand the required changes. Instead of trying to control everything, Ghosn was interested in transformational leaders.
Bolton (2005) underlines that even the best leaders cannot control everything and change people, but implement management practices and motivate a team. Therefore, Ghosn decided to involve more than 5,000 people, listen to them deeply, take notes, and draw personal summaries (Spector, 2013). His strength lay in listening, engaging, and learning from what the lower hierarchical employees knew about the company’s problems and how they could change.
Barriers to Change
However, some executive managers and ordinary employees raised concerns about Ghosn’s approach because of poor attention to cultural peculiarities and the intention to cut costs as the only way to success. Ghosn seemed to neglect the opinions of current executives and developed his vision of the situation. On the one hand, it was a rational decision because the already-made attempts did not bring benefits. On the other hand, his method lacked the so-called beneficiary contact when task identity and significance were explained to strengthen employee motivation and contributions (Grant, 2012).
As a result, employees’ morale and performance were increased at the expense of cultural preferences and personal commitment. In other words, Ghosn’s decision was harsh and specific: if people did not accept new rules, they were no longer appropriate to be a part of a team. Therefore, barriers such as low commitment, lack of attention to organizational culture, and a rush to achieve positive changes cannot be ignored in the NRP.
Emotional Bonds
Another challenge observed in the chosen leadership case is the company’s lack of emotional bonds. At first sight, Ghosn proved himself to be an effective leader who was ready to collaborate and listen to the opinions of other employees with lower hierarchical levels. However, most of his attempts remained egoistic because his primary goal was to gather information for his evaluation and analysis.
According to Spector (2013), an emotional bond is an integral part of any organization where people with their skills and attitudes develop relationships based on a commitment to the organizational goal. Ghosn did not pay much attention to employees’ emotions because he neglected all cultural interests and concentrated on particular tasks. He defined the keiretsu system (a big family) with suppliers as ineffective and cut the number of stakeholders in half (Spector, 2013). While some executives admitted they had never worked under demanding conditions that challenged them regarding commitment and targets, Nissan achieved a high profit due to the offered cost reduction (Spector, 2013). Emotional bonds were weak indeed, but organizational progress was recognized.
Personal Reflections
The effectiveness of Ghosn’s leadership style can be examined by relying on various personal reflections and contributions the Nissan team made over several years. In this case, three controversial reflections were introduced to describe Ghosn. Some believed he was a “golden touch” who brought success, while others did not believe he brought something new, but cost cuts, or doubted his ability to lead two large companies effectively (Spector, 2013). Each opinion had a solid background for existence, but the results Ghosn presented proved his correctness.
Chowdhury (2011) suggests several core values for organizational change management: integrity, excellence, passion, balance, trust, and entrepreneurship, and Ghosn succeeded according to every point. The lessons obtained from this case study include the importance of transparency and collaboration through the prism of cross-functional team-building. Still, more attention should be paid to cultural issues to ensure that high-level commitment and motivation are present in the company.
Conclusion
In general, the work done by Ghosn deserves recognition for two main reasons. First, this leader showed how a well-known organization should identify its mistakes and problems. Second, his approach was practical, even if some misunderstandings and concerns emerged in the team. He gathered employees’ opinions, followed his philosophy, and proved that, despite specific strengths and weaknesses, the NRP could bring profit if performance and people were in focus. Upward communication, emotional bonds, transparent publicity, and cross-functionality are crucial to organizational success and global recognition.
References
Bolton, B. (2005). Control or lead? It’s your choice. Information Systems Management, 22(3), 81-82. Web.
Chowdhury, R. (2011). Organizational design and firm-wide collaboration: Retrospective appreciation of a change-led consulting intervention in India within a systems thinking paradigm. Systems Research & Behavioral Science, 29(4), 402-419. Web.
Grant, A. M. (2012). Leading with meaning: Beneficiary contact, prosocial impact, and the performance effects of transformational leadership. Academy Of Management Journal, 55(2), 458-476. Web.
Spector, B. (2013). Implementing organizational change: Theory into practice (3rd ed.). Prentice Hall.