Carlos Ghosn Leader of Nissan and Renault

Individual Term Paper Case 11: Carlos Ghosn: Multicultural Leader as CEO of Nissan and Renault Executive Summary Leadership is the ability to influence others to achieve a common goal. Culture is the values, understandings, assumptions, and goals that are passed from generation to generation. Strategy is the choices an organization makes on how they will operate and differentiate themselves from competitors. All of these three variables (leadership, culture and strategy) make up the formula for successful performance of a firm: P=f (L+C+S).

A firm’s successful performance depends on strong leadership, adaptability to any culture, and a strong strategy. Leadership, Culture and Strategy all need to work hand-in-hand for an organization to be successful and achieve their goals. The problem many mangers face is the ability to have a Global Mindset, adapt to many different cultures, and have the flexibility to make adjustments in any situation. Carlos Ghosn, a French businessman, born in Brazil to Lebanese parents, became the CEO of both Renault and Nissan. Carlos was a successful and effective leader because he had a Global Mindset.

Carlos knew how to listen, kept his promises, encouraged, motivated, and instilled a sense of urgency in the Japanese workers. Carlos Ghosn was able to turnaround Nissan from $254 million in losses and a debt of $19 billion. Even though he was not Japanese and faced many challenges, he was able to revive the ailing Japanese automobile company, Nissan, within two years. While in Japan, Carlos Ghosn made culture a priority, was able to adapt to the Japanese culture, and even received praises from the Japanese workers and public.

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Carlos Ghosn’s strategy of forming cross-functional teams among the Japanese workers was hard at first due to their resistance; but the teams ended up bringing much success to the revival of Nissan, while also being the CEO of Renault. Carlos Ghosn, CEO of Renault and Nissan, is a perfect example of the formula for successful performance of a firm: P=f (L+C+S). Therefore, I recommend that all managers make culture a priority. In order for a firm to have successful performance in an organization, there should be a strong combination of leadership, culture, and strategy.

Managers must be able to have a combination of all three to be able to run a company successfully in a foreign country. Leadership is culturally contingent; so being able to adapt to any culture will shape a managers leadership style, strateg and the mission and vision of an organization. Leadership, Culture & Strategy Leadership is the ability to influence others to achieve a common goal. Leadership is also the ability to influence people’s way of thinking, their attitudes, and their behaviors. Leadership is culturally-contingent; culture influences leadership in many ways.

In order to motivate others, a leader needs to understand the needs, goals, value systems, and expectations of the people; no matter their culture or background. No single style of leadership works for every culture, country, or situation. The perception of what makes a successful leader varies from one culture to another. A leader is responsible for running the entire organization and has the responsibility of deciding what leadership style to use in each of the countries they are working in. An effective leader successfully carries out the mission and vision of the organization.

For an organization to achieve their goals, effective leadership is crucial. Effective leaders know about the global business world, are able to adapt to any culture, and are organization-savvy. Effective loaders have a Global Mindset; a more flexible style of leadership that can be applied to any organization anywhere in the world. Carlos Ghosn, CEO of both French Renault and Japanese Nissan, was a successful leader with a Global Mindset. Carlos knew how to motivate his employees and knew how to work with multicultural teams.

Motivation and leadership is affected by cultural, societal, and political variables. Culture also affects the mission and vision of the organization. Culture is the values, understandings, assumptions, and goals that are passed from generation to generation. Culture is what the people in a particular society believe, follow, and pass on from generation to generation, think, want and would like to achieve. Culture influences how people behave, what they expect from leaders, what kind of influence the leader will have, and what kind of leadership style a manager should follow.

Not all cultures can be motivated in the same way. Managers need to know everything they can about a culture so they can use the best leadership style applicable to that culture. Managers will need to adjust their leadership style to accommodate the norms, attitudes, and other variables within the culture. It is very important for the managers of an organization to understand the culture of the country they will be working in. They have to learn and study the language, behaviors, body language, religion, politics, government, etc.

Culture influences negotiations, the decision-making process, agreements, concessions, the way information is perceived, and the way business is handled. Lack of in-depth knowledge of a country’s culture could lead to failure, loss of money and time, unhappy employees, and a broken contract for an organization. Culture also affects the strategy an organization chooses for competitive advantage over competitors. An organization’s strategy is how they wish to compete in the business world. Strategy is the choices an organization makes on the way they will operate and differentiates themselves from the competitors.

Leadership and motivation are very important factors in implementing a successful strategy in an organization. An organization’s strategy will give them the competitive advantage in the global business world. The Power of the 3 The formula for successful performance of a firm is P=f (L+C+S). A firm is able to perform due to the Leadership, Culture and Strategy of the organization and is dependent on the three. In order for a firm to be successful, leadership, culture and strategy must work hand-in-hand for the organization to achieve their goals.

Leadership is dependent on Culture, Culture influences Leadership and the Strategy helps the organization have a competitive advantage over competitors. All three go hand-in-hand for a firm to achieve success. Without effective leadership, a culture will not be able to put their strategy to work. Not all leadership styles will work in all cultures. Cultural variables (values, work norms, locus of control, etc) affects everyone involved and shapes the leadership role. Managers need to make adjustments to their leadership styles depending on the country they are working in.

They must adjust their leadership behaviors according to the norms, attitudes and variables in the society. All three variables (leadership, culture, and strategy) are necessary for an organization to work and be successful. Case Analysis: Carlos Ghosn Carlos Ghosn, CEO of both Nissan and Renault, became a successful French businessman, an effective global leader, and a multicultural manager because of his strong leadership skills, culture adaptability, and strong strategy. Carlos Ghosn was able to revive Nissan from $254 million in losses and a debt of $19 billion within two years.

Carlos’ success was due to the un-Japanese changes he brought to the Japanese company, by persuading Japanese workers to accept change, and by implementing a sense of “urgency” in them. Carlos Ghosn motivated the employees, established high goals, and made responsibility clear to all levels of workers. Carlos Ghosn expected the Japanese workers to participate in the decision-making process, took their suggestions, lifted morale, and did not accept any excuses from them; only solutions. Carlos Ghosn, an effective but unconventional leader, was simple, straightforward, and transparent.

Carlos Ghosn’s transparency made him an effective leader. Carlos Ghosn was an un-Japanese manager running a Japanese company; while still being the CEO of the French company Renault. Carlos faced many challenges because he knew nothing about Japan, their culture, or their language. Carlos made cultural diversity a priority by attending all Japanese events, by stressing face-to-face meetings with Japanese workers, by listening to all employees, and by respecting the Japanese culture. He avoided blending the French and Japanese cultures and appreciated the differences in the cultures.

He made bold decisions, shook the hands of the Japanese workers even though it was against their culture, made English the official language, and even had to hire a bodyguard when the environment was tense at the Japanese & French company headquarters. Carlos Ghosn was more concerned with making the companies profitable; rather than being culturally sensitive Carlos Ghosn’s strategy was cross-functional teams. Even though it was hard to form cross-functional teams among the Japanese workers because of their resistance, Carlos explained why they were necessary and how they would bring overall benefits to the company.

Cross-functional teams were formed and Carlos made them all responsible and accountable for their actions. All Japanese workers were involved in the revival of Nissan and the Japanese workers began accepting and trusting Carlos Ghosn. The revival of Nissan was a success because every worker was involved and Japanese workers knew they had a voice at Nissan. Conclusion In conclusion, Carlos Ghosn and his successful revival of Nissan, is a great example of the formula for firm performance: P=f (L+C+S).

Carlos was a strong, effective leader and a mutlticultural expert whose innovative management practices brought him much success both at Nissan and Renault. A firm’s performance is contingent of Leadership, Culture and Strategy. Above all, Culture has the most influence over Leadership. Culture shapes the leadership style, mission, vision, and strategy of an organization. A manager needs to be ready to adapt and adjust to any culture or situation to be successful. An effective leader is one who has a strong leadership style that can adapt to any culture and has a strong strategy to implement.

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