In times of globalisation, more and more enterprises try to strengthen their market position through acquisition or alliance with new partners, so that the problem of uniting two companies and establishing a globally effective organisation gets on weight. Statistics on transformational change is not very positive though, only around 30 percent is reported to be successful. Nevertheless, some positive examples of the past and present show that transformational change indeed can succeed - if done correctly. What are the factors that define whether a change will succeed or fail?
The main objective of the thesis will be to analyse the success criteria of transformational change and the leader’s role in it on example of a Japanese car maker. Nissan’s turnaround in 1999 was initially criticised by industry insiders, but two years after the beginning of the transformation it was widely discussed in the international media and claimed as “sensational” because of its prompt and astonishing results. One man behind this change was Carlos Ghosn, who had a double function at that time as COO, both of Nissan and Renault, and could bring the heavy in-debt Japanese car maker into the black again.
Table of Contents
1. Objectives of the thesis
1.1 Structure and methodology
1.2 Research
2. Leadership approaches
2.1 Major characteristics of a leader
2.2 Leadership styles and roles
2.2.1 Goleman’s six leadership styles
2.2.2 Situational leadership
2.2.3 Transactional leadership
2.2.4 Transformational leadership
3. Reasons for strategic change
3.1 Transactional change
3.2 Transformational change
4. Different levels of change in organisation
4.1 Individual change: reasons for resistance
4.2 Team change: the role of teams in a change management process
4.3 Organisational change: organisation metaphors
4.3.1 Three models of organisational change
4.3.2 Change of organisational culture
4.3.3 “New” approach for conducting organisational change
5. Nissan’s U-turn: 1999-2001
5.1 Overview of Nissan’s economic situation in 1999
5.2 Carlos Ghosn: the European leader versus the Japanese tradition
5.2.1 Different leadership styles implemented by Carlos Ghosn
5.2.2 The U-turn of communication in Nissan
5.2.3 Cultural U-turn of Nissan with Carlos Ghosn
5.3 Leading change: the secret of Carlos Ghosn success as a leader
5.3.1 Character
5.3.1.1 Attributes
5.3.1.2 Behaviours
5.3.1.3 Emotions
5.3.2 Competence
5.4 Transformational change of Nissan according to 8 steps to New Organisation approach
6. Conclusion
Objectives & Key Themes
This thesis examines the success criteria of transformational change within large organizations, focusing on the role of leadership. Using the turnaround of Nissan Motor Co. under Carlos Ghosn between 1999 and 2001 as a case study, the research aims to identify how a leader can overcome deeply rooted corporate traditions and financial distress to steer a failing company toward sustainable profitability.
- The impact of various leadership styles (Goleman, Situational, Transactional, Transformational) on organizational change.
- Methods for overcoming organizational resistance during restructuring processes.
- The role of corporate culture and the necessity of aligning organizational identity with strategic goals.
- The practical application of the "8 Steps to New Organisation" approach in corporate turnarounds.
Excerpt from the book
5.2 Carlos Ghosn: the European leader versus the Japanese tradition
Carlos Ghosn was born in Brazil of French and Lebanese parents and was educated as engineer in the most prestigious high school of France. Before revitalizing Renault due to aggressive cost-cutting plan, he had already restructured Michelin North American Operations where he was the COO but left the company as he realized that he would never become a president in a family owned company. Actions taken by him in Japan were already done before in France but only on a smaller scale. ”Le cost-killer“, a nickname he earned due to his aggressive cost reduction policy, closed one Renault plant with 2,700 jobs and slashed the number of suppliers.
What could be implemented by Ghosn in Europe was never done in Japan before that’s why industrial critics were expecting rather the fail than the success of this alliance.
Japanese business culture had some long term traditions that no one questioned in Nissan or in other Japanese companies before such as keiretsu supplier tradition as well as lifelong employment and promotion based on seniority. Analyzing Nissan’s problems, Ghosn announced that all these traditions will only contribute to Nissan’s bankruptcy instead of saving it and introduced radical changes in all three areas. The outsider status gave him the right to implement these changes that could never be implemented by a Japanese manager. His radical staff layoffs were announced as extreme for Japanese history, but were accepted at the end by unions, government and suppliers. The reason for this acceptance was his ability to paint a vivid picture of consequences when appropriate measures are not taken.
Summary of Chapters
1. Objectives of the thesis: Provides an introduction to the challenges of global market competition and outlines the primary goal of analyzing transformational success through the Nissan case study.
2. Leadership approaches: Examines theoretical frameworks of leadership, distinguishing between traits, processes, and situational approaches, while emphasizing the importance of credibility.
3. Reasons for strategic change: Explores why organizations must undergo strategic transformation, contrasting transactional change with transformational change.
4. Different levels of change in organisation: Analyzes the complexities of change at individual, team, and organizational levels, and discusses various change management models.
5. Nissan’s U-turn: 1999-2001: Details the practical application of turnaround strategies at Nissan, focusing on Carlos Ghosn’s leadership, communication tactics, and cultural restructuring.
6. Conclusion: Summarizes the key findings, highlighting how the successful combination of professional competence, credibility, and clear communication enabled the Nissan recovery.
Keywords
Transformational Change, Leadership Styles, Nissan, Carlos Ghosn, Organizational Culture, Change Management, Credibility, Business Turnaround, Strategic Planning, Cross-Functional Teams, Keiretsu, Emotional Intelligence, Corporate Governance, Crisis Management, Global Leadership
Frequently Asked Questions
What is the core focus of this thesis?
The thesis focuses on analyzing the success criteria of transformational change in a global business environment, using the successful turnaround of Nissan between 1999 and 2001 as a primary case study.
What are the central themes of the work?
Key themes include leadership styles, the role of organizational culture in change management, the mechanisms of corporate restructuring, and the importance of leadership credibility in securing stakeholder support.
What is the primary research goal?
The goal is to determine the factors that define whether a transformational change succeeds or fails, specifically by evaluating how Carlos Ghosn managed to overcome Japanese business traditions to return Nissan to profitability.
Which scientific methods are applied?
The author uses a literature-based theoretical analysis of leadership and change management models, followed by a qualitative case study analysis of Nissan's specific turnaround strategies.
What topics are discussed in the main part?
The main part covers leadership theories, the reasons for strategic change, levels of organizational change, specific models like the "8 Steps to New Organisation," and a detailed breakdown of Nissan's U-turn, including communication and culture.
How would you describe the thesis using keywords?
The work is best characterized by keywords such as Transformational Change, Organizational Culture, Change Management, Leadership Credibility, and Corporate Turnaround.
Why was the "keiretsu" system criticized by Carlos Ghosn?
Ghosn criticized the keiretsu practice because it limited Nissan's capital efficiency, forced the company to pay higher prices for supplies, and prevented the organization from focusing on its own profitable product development.
How did Carlos Ghosn overcome the cultural resistance in Japan?
He overcame resistance by transparently communicating the dire financial situation, proving the necessity of the changes, and demonstrating that his actions were aimed solely at the survival and future competitiveness of the company.
What role did Cross-Functional Teams (CFTs) play?
CFTs were essential for breaking down silos, speeding up the decision-making process, ensuring better visibility across the entire business process, and fostering a culture of collective responsibility.
- Quote paper
- Volha Bieck (Author), 2013, Leadership through change, change through leadership, Munich, GRIN Verlag, https://www.hausarbeiten.de/document/230044
