Multicultural Leader as CEO of Nissan and Renault Case

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Introduction to the case

This case highlights the partnership between the French and Japanese vehicle manufacturer which came into existence on March 27, 1999, each having its own distinct corporate culture and brand identity, linked through cross-shareholding. Renault has a stake of 44.4 per cent in Japanese automaker Nissan while Nissan in turn has a 15 per cent stake (non-voting) in Renault.

Renault S.A. is well known for numerous revolutionary designs, security technologies and motor racing. (Wikipedia)

Q- What are the different management practices unique to Japanese organizations?

Different management practices unique to Japanese organizations are:

1) Democratic style of Leadership
Leadership is defined as the ability to lead and inspire people towards a common goal. Japanese prefers team oriented leadership rather than autocratic western style of leadership.

2) Polite and Reticent
Japanese are not vociferous and are much more introvert in the management process.

3) Keiretsu system
Here the companies had partnership with each of its supplier through shareholding. Companies had shared relationship with its suppliers.

4) Lifetime employment system
Japanese believe in lifetime employment in the company in which the person is working.

5) Obligations
Japanese believe in giving and taking obligations in the business and sometimes it can overlook merit.

6) Seniority based Promotion

Promotion is based mainly on seniority rather than merit.
7) Close ties with Suppliers
Japanese businesses have the system of cross holdings of ownership amongst the suppliers and other related organizations.

Response to Q2

Japanese Management practices and competitive advantage

Japanese management practices to its credit have certain advantages in terms of employee loyalty, more cordial relationship with the suppliers besides others. But there are certain disadvantages like overlooking of merit in case of promotion, giving more emphasis on short term growth rather than looking for long term opportunities. Hence there is a need of changing some of the practices.

Global environment is changing in following manner:

- Increasing competition in the automobile Industry
-Rapid developments in technology
-Growing concern of eco friendly products
-Product lifecycles becoming shorter.

Response to Q3

Reason behind the problems at Nissan
Nissan had the losses and huge debt in 1999. The major reasons of this were as follows:
1) Reluctance to accept failures and resistance to change by the existing Nissan management.
There was lack of urgency amongst the employees and there was resistance in formation of cross functional ...