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Nissan Company’s Strategic Leadership Essay

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Updated: Jun 27th, 2020

Introduction

Leaders may adopt different headship styles to ensure that things are done in the right way within organizations. Leadership styles include autocratic, authoritative, democratic, and strategic leadership among others. Strategic leadership provides the necessary vision and directions that will take an organization towards success. In the modern organizations, change is inevitable. While managing change, premeditated leadership provides the means of dealing with it by availing the necessary expertise, comprehension bases, and other aspects that are vital for tactical development, evaluation, and execution of organizational change plans. The Nissan Company exemplifies the role of strategic leadership in ensuring success of an organization. The company almost ran bankrupt due to lack of good strategic leadership and orientation to the changing operational environment. However, following the appointment of Carlos Ghosn as its chief operating officer in 1999, the company revived its fortunes. This paper discusses strategic leadership using the Nissan Company as a specific case example.

Delegating Responsibilities, Effective Conflict Management, and Team Building

The Nissan Company experienced various challenges, which threatened it to become bankrupt. Faced with this challenge, Ghosn had to ensure that he turned around the fortunes of the company. Global CEO (2005) informs that he joined the company when it was having an accrued debt of 20 billion US dollars. At this time, among 48 models of vehicles made by Nissan, only three models returned profits. Upon joining the company, he promised to consider resigning in case he failed to ensure the organization made profits. He set his mission as ensuring that the Nissan Company did not have any debt by 2005. Hence, Carlos Ghosn attempted to restore the glory of Nissan Company by ensuring that the organization managed to cover all its debts. To resolve this leadership challenge, he needed to reduce the costs of running the company. One of the ways of accomplishing this mission was by increasing the productivity of the organization by eliminating challenges that reduced the productivity of workers such as organizational work conflicts, low teamwork motivation, and the failure to delegate responsibilities.

Making Nissan Company profitable was the main desired outcome. Ghosn’s effort to attain his vision and the desired outcomes was not in vain. He considered delegation of responsibilities an important way of motivating his highly experienced employees. However, he ensured that such delegation would comply with his intentions to alter the manner in which things were done in accordance with the Japanese business culture. These changes included the mechanisms of making organizational decisions based on the a system of consensus where people could develop awareness of issues that were necessary for making decisions based on their merits and demerits. He then progressed to eliminate Nennkou-Jyretu in the effort to ensure that people assumed individual responsibility or accountability of their actions. In this effort, he ensured that promotions were principally based on individual performance with reference to the delegated duties. Failure to attain specific performance levels amounted to demotion.

The Nissan Company is not immune to organizational conflicts. They occur when differences emerge between organizations and employees or among different employees. The inevitability of conflicts within an organization suggests that organizational leaders need to embrace disputes, rather than avoiding them. Although many ways can be deployed to deal with conflicts at workplaces such as group effort, negotiation, competing, evasion, and adjustment, any strategy that emphasizes leaving conflicts unaddressed is inappropriate. Conflicts often produce negative implications concerning the performance of an organization (Bagshaw, 2004). The goal of organizational leadership is principally to look for mechanisms of resolving challenges, which may hinder the performance of an organization so that it delivers value to its owners (shareholders). For the Nissan Company, under the leadership of Ghosn, conflict avoidance constitutes a risky approach to disagreement management. Myatt (2012) asserts that poor communication is directly correlated with escalated work conflicts since many conflicts within an organization are caused by inadequate information, poor communication, or even when cases of misinformation are encountered. Ghosn overcame this challenge through ensuring precision, accurateness, and timing of communication.

Bagshaw (2004) asserts that without effective work teams, organizations risk losing their productivity. Ghosn remained focused on his strategic vision and mission of changing the fortunes of the Nissan Company from 1999 to 2005. To transform the financial status of the company, he knew well that it was impossible without creating work teams of talented employees. In this effort, he transformed the culture of promoting employees based on their age experience to use of expertise and talent potentials. He also transformed the Nissan Company to ensure that it became more diverse in the effort to tap more talent potential. By the time he joined the organization, the Nissan Company had only 1 % of women taking managerial roles. Nevertheless, this number was twice that of the competing companies. Through his leadership, in the effort to create a more diverse managerial team, he has ensured that the top management team for Nissan Company comprises 5% women. The goal encompasses increasing this number to 10%.

Different Varieties of Participation

At the Nissan Company, all stakeholders contribute to the overall success of the company. Altering an organization from a loss-making status to become profit making requires leaders to alter certain cultures and approaches of executing the business of an organization. The most desired change is the one that enables an organization to become more profitable. Ghosn was well acquainted with this concern in his effort to ensure that the Nissan Company became a profitable organization. However, he was aware that success would not be realized without the participation of all stakeholders in the creation of the desired change.

Although participation may be approached different dimensions, three important varieties are important in the context of an organization that seeks to build a long-term success in an environment of continuous change such as that of the Nissan Company. The first variety relates to the people who participate in the organizational change. Fung (2006) observes, “some participatory processes are open to all who wish to engage, whereas others invite only elite stakeholders such as interest groups’ representatives” (p.66). For example, in case of the Nissan Company, Ghosn invited suppliers’ representatives, employees, social groups, and customers in discussion forums that were aimed at identifying the weaknesses and strengths of the Nissan Company. This participation was important in helping him and his team of experts to determine the required change and the mechanism of its implementation.

In some organizations, participation may be accomplished through specification of the manner in which participants share information, exchange it, and/or how decisions are arrived at. For example, after engagement in discussion forums, the board of directors or stakeholders voted for the issue that was at hand. The decision that was supported by the simple majority or a certain percentage of voters was passed as the decision that could serve the best interest of all people who were represented by the stakeholders. This mode of participation also provided avenues for more deliberations. Some participants took specific positions, offered their rationale for the positions, and/or altered their minds in the process of participation. A third variety involves a collective participation of all stakeholders. However, this mode links policies with the discussions. This plan suggests that such a variety of participation is conducted not only to develop policies, but also to determine the necessary actions to facilitate the implementation of the policy. For example, in the case of the Nissan Company, a discussion was held between Ghosn, his team of experts, and stakeholders with an already established desired change, namely restoring the organizational profitability.

Power Issues in Organizations

The success of the Nissan Company rests on the ability of its leaders to make good organizational decisions. However, a decision alters nothing without the ability to enforce it or simply without the power to enforce it. Apparently, the mega challenge that faces the modern-day leaders rests squarely on how to get things done both in the right way and within the set time. This challenge may be perceived as having a link with decision implementation within an organization. Jeffrey Pfeiffer who is a Professor at Stanford Business School wrote a book, namely Managing with Power: Politics and Influence in Organizations. The book reveals that challenges of implementation ideally involve how leaders can influence behavior, alter events, get people do the things they are supposed to do and/or overcome their resistance (Pfeiffer, 1992). To have these things done, it is essential for the manager to acquire power. Pfeiffer (1992) defines power, as an essential tool for helping leaders to perform their obligation, as “the opportunity to build, to create, or to nudge history in a different direction” (p.13). It may take the form of power contingencies, reward, and coercive influence.

Power contingencies encompass the things that leaders require to accomplish their goals and visions. The uncertainties of availing such resources in the long-term threaten the sustainability of the power to lead organizations. Ghosn was effective in leading since he had the influence to lead the organization into the rejuvenation of its profitability through people. However, he achieved this goal by delegating his power whilst avoiding coercion. Indeed, before assuming his new position as the COO of the company in 1999, Ghosn met with various stakeholders of the Nissan Company to identify its strengths and weaknesses (Yukl, 2012). In the effort to classify his power contingencies while exercising his role in the organization, he realized that the desired change would be difficult to realize if he directly dictated the desired strategic direction using a coercive or expert power that was acquired from the team he came with from Renault to the Nissan Company (Yukl, 2012).

Conclusion

Through nine cross-functional teams, Ghosn ensured that he retained his power of influence by shifting his expert and coercive powers to the teams that were working hand in hand with the company’s stakeholders to mitigate cases of conflicts and resistance to change. Thus, his main power contingency was the motivation of these work teams. His success in making the Nissan Company profitable suggests that specific theoretical perspectives seem more relevant to the real world since he knew where specific forms of power applied well.

Reference List

Bagshaw, M. (2004). IRS Managing Conflict in the Workplace. London: LexisNexis.

Fung, A. (2006) Varieties of Participation in Complex governance. Public administration Review, 66(1), 66-75.

Global CEO. (2005). Carlos Ghosn’s Leadership Style. ICFAI: ICFAI University Press.

Myatt, M. (2012). 5 Keys of Dealing with Workplace Conflict. Forbes. Web.

Pfeiffer, J. (1992). Managing With Power: Politics and Influence in Organizations. Boston, MA: Harvard Business School Press.

Yukl, G. (2012). Leadership in Organizations. Upper Saddle River, NJ: Prentice Hall.

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