Introduction
In 1999, Renault bought equity in the Japanese automaker Nissan. As part of this bailout, Nissan borrowed Carlos Ghosn from Renault to become their first non-Japanese Chief Operating Officer (COO). To turnaround an unprofitable company, Ghosn imposed new management ideas despite deeply anchored Japanese business practices and culture. With his leadership, Ghosn lead and motivated Nissan’s employees, and the company became profitable. However, Renault planned for Ghosn to leave Nissan and return as its Chief Executive Officer (CEO). This leadership void threatens Nissan’s “sustainable pattern of customer focus and profitable growth” (Millikin 9). Nissan needs to continue the momentum and motivation to accomplish growth.
Replacing Ghosn with a new COO by use of a search committee represents the obvious solution to the problem. However, this assumes a replacement could and would be Ghosn’s equal, including leadership and management style, vision, and knowledge. Renault could allow Ghosn to transition the leadership role to a replacement of his choice, with approval of Nissan’s Board of Directors, after a mentoring and trial period. On the other hand, Nissan could negotiate with Renault to extend Ghosn’s stay as COO to ensure the status quo. Alternatively, Nissan could merge with Renault and agree to keep the Nissan brand. This would allow Ghosn to continue his successful leadership and strategies, or run the company as CEO of Renault, while decreasing redundancies and increasing operating efficiencies.
Analysis of the Alternatives
Search committees often replace the traditional hiring of upper management and leadership. The committee must define present conditions and develop a consensus of criteria used ...
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When hard-nosed Harold Geneen drove the growth of ITT during its heyday in the 1960s and '70s, he had a blunt management philosophy: "In business, words are words, explanations are explanations, promises are promises, but only performance is reality." In 2001, when Jim Kilts arrived at Gillette as the first outsider to run the Boston-based company in over 70 years, he found a business with great brands that were losing market share. The company's acquisitions of Duracell and Braun were not delivering, sales and earnings were flat, and the company had missed its earnings estimates for 15 straight quarters. The stock had plummeted, and Wall Street had lost patience. Yet, two-thirds of the top managers were receiving top ratings.
General Motors became a “centralized organization, so decision-making authority is concentrated in the hands of top-level managers, and little authority is delegated to lower levels” (Ferrell et al., 2015, p. 199). Centralized organizations have little upward communication and top-level manager may not be aware of problems and unethical activities. According to Ferrell et al., (2015), it has been noted that “centralized organization may exert influence on their employees because they have a central core of policies and codes of ethical conduct” (p. 201). Conversely, to survive at GM employees praised the CEO intelligence and carried out their orders by keeping a low profile, and never made waves. GM rewarded employees who followed the old traditional ways and those that challenged their thinking lost promotion opportunities or their jobs. However, General Motors experienced conflict between corporate management responsibility and social responsibility. Consequently, General Motors “attempted to implement a new mentality upon its management in a short period of time” (Goussak, Webber, & Ser, 2012, p. 49) by changing the company’s environment, but
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Achieving world class business performance is a major challenge in today’s society. Manufacturing companies continue to face increased competition and globalization from its competitors. (1, p. 148). The automotive industry is one of the most volatile manufacturing industries that we have, which was evident in the 2008 – 2010 automotive industry crisis. (2) This global financial downturn served notice to the American automotive manufactures to raise the bar, in order to achieve word class business performance. General Motors, one of the country’s largest automotive manufactures, had to receive a government bailout to survive. During this time many with the corporation asked themselves, if we were a world class business, would we be facing this pending crisis. The answer was a resounding “NO”. General Motors has come out of bankruptcy and is focused on being a world-class business organization.
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