Presentation Of The Merge Between Renault Coorporation And Nissan Moto
Paper Topic: Presentation of the successful merge of RENAULT corporation and NISSAN motors!
Term Paper due on April 26th, 2001
In 1999, RENAULT, a French midsize automaker company decided to create an alliance with Japans NISSAN Motors. This operation has transformed the company into a global player, inside the very competitive market of worldwide vehicular distribution. By taking over 36.8% of Nissan's capital, Renault decided to send Carlos Ghosn, as new manager from Nissan, in order for him to install a Nissan Revival Plan (NRP). Actually, this plan has been made in order for both corporations to restore profitability, and acquire and increase market shares in Japan. My paper presents and describes the different aspects of this successful merging operation between two cultural opposites way of managing and running business. In other words, it shows the differences and changes that have been brought by Renault Corporation. First, it presents the major leadership role played by Carlos Ghosn in successfully restoring Nissans health. Secondly, it introduces the Nissans Japanese way of running an organization, and the main changes made by Renault organization, a western European firm: showing the huge different gap between the two ways of managing businesses.
Carlos Ghosn has been charged to revive Nissan Motor Corporation. After working in turn-around situations at Renault in France and at Michelins U.S. operations, 46-year-old Brazilian-born Ghosn moved to Nissan Japan in 1999, and has vowed to quit if the auto maker isnt profitable by March, showing his characters determination. His leadership has been one of the main factors of the working of Nissan Revival. The question is what really makes him a leader? Actually, understanding the different characteristics of his personality really explains why this alliance has been successful, as Carlos Ghosn has been one of the principal actors of the merge between Renault and Nissan. Kenji Watanuki, director of Foreign Investment in Japan Development Corporation (FIND) describes him as the complete opposite of traditional Japanese managers: he has energy, charisma, and simplicity. He is saying what he is doing, and doing what he is saying. Moreover, the public opinion has been praising the personality of the new Nissan leader: A gaijin (foreigner) that comes to save Nissan, speaks frankly and has the reputation to work from 7 to 23 seems to appeal Japanese people curiosity.... Nicknamed Icebreaker, his skill at ignoring local business practices that stand in the way of making money has really shown Nissan organization his leadership. His behavior defies Japanese business habits and etiquette. For example, his way of managing has appeared to go against the very respectful relation that is supposed to exist between employees and managers inside Asiatic organization: no intermingling between workers at different levels of the company. Seeing him, a president coming down from the fifteen floors in order to shake hands and greet employees, or congratulate a future mother, has really surprised most of other Japanese top managers.
When Carlos Ghosn and his team arrived in Tokyo, aberrations are blindingly obvious. The company has been falling down in the last twenty-six years in the domestic market, and in the last ten years in the global market. The company has one of the biggest debts of the automobile industry, and hasnt realized any profits through the last decade. By identifying Nissan emergencies and dramatizing the companys position, Renault policy was to present an electric and dramatic situation to public opinion, in order to make the stockholders accept their propositions. On one hand, this second part introduces and talks about the different aspects of Nissan before the arrival of Renault, and on the other hand, shows what are the changes brought by Renault Corporation, a west-European organization.
The three main problems of Nissan Motors organization are a lack of leadership, no long-term vision and a need to centralize some of its aspects. First, Nissan organization was the caricature of a Japanese bureaucratic organization where power sits nowhere. Sawako Takeuchi, professor at the University of Tokyo, describes that individuals dont express themselves, and the force is in the group. There is inexistence of leadership! Secondly, the company hasnt been elaborating any long-term vision for their own guideline. Toshiyuki Shiga, today senior vice-president,