Describe about the Organizational Behaviour for Logics on Buyer-Supplier.
The aim of the report is to analyse the leadership of Carlos Ghosn, the CEO of Nissan Motors. Ghosn has been recognised as a successful leader whose leadership has proved fruitful for the company at many instances. The aim of the report is to understand the approach taken by Ghosn to make changes in the organization. It has been recognised that the leadership of Carlos has contributed largely in Nissan. The report is based on the leadership approaches undertaken by Carlos during his professional career. The aim is to recognize various leadership theories and apply the same in the context of the leadership of Carlos Ghosn.
Organizational Behaviour is the study that states the interaction of people within a group. The central idea is to make an attempt to increase the efficiency of an organization. The organizational behaviour theories are used in an organization for human resource purpose to maximize the output from an individual or a group (Mainemelis, Kark and Epitropaki 2015). A variety of models and theories that include improvement in job performance, increase job satisfaction and promote innovation and encouragement. In an organization, the goal is to increase the amount of quality of work and increase the productivity to maximize profit. It was observed that a scientific approach can actually increase the productivity in isolation (Deinert et al. 2015). This report shall highlight the several approaches undertaken by Carlos to achieve better results in terms of productivity and quality of work at Nissan.
Analysis of the organizational culture at Nissan prior to the organizational change initiated by Ghosn
Organizational culture provides meanings for routine organizational events by reducing the amount of cognitive processing and energy that the members need to expend throughout the day. An organizational culture is a shared basic assumption that solves the external and the internal adaption. As commented by Antonakis (2013), that leadership is one of the sources of beliefs and values that a leader undertakes to understand the deeper level of the culture of a particular organization. It is important to understand the internal and the external condition of an organization. It falls under the responsibility of the leader to understand the problems and then make certain adaptations and find solutions to adapt and survive in the market (Barmeyer and Mayrhofer 2016). The major stakeholders include investors, suppliers, managers and employees, the community and its government and other customers. Internal problems with these stakeholders might take place at any point of time (Simmons 2016). In case of external adaptation, a leader faces a number of problems as well. When there rise the opportunity of expansion, an organization faces a number of issues in regard to the expansion in a new place. These problems include a barrier in the language and culture, distribution of power authority among the members of the organization (Barmeyer and Mayrhofer 2016). Developing a trust and intimacy among the other stakeholders of the organization becomes the major factor of challenging for the leader.
Classical organizational theory
Classical Organizational Theory is a merger of scientific management, bureaucratic and administrative theory.
Scientific leadership theory
According to the scientific management or leadership theory, there are four basic principles that a leader must follow to achieve better results in the operation of the business (Ghanbari and Abedzadeh 2016). The four basic principles are:
- To find the best way to perform a task
- To carefully match each employee with each task
- To keep a check on the employees and match each worker with each task and reward them as well
- To manage and control the task
As pointed out by Stahl and Brannen (2013), that to be successful and improving the production and function of an organization, it is important to carefully scrutinize each employee and people and then assigning them the job accordingly. The theory has been greatly accepted by major organization and the age old philosophy of ‘production first and people second’ seemed to get blurred. The leadership approach of Carlos was so influential that he was regarded to become the President of a country. It was his leadership and in sightedness that had lead him to become the CEO of both Nissan and its French partner Renault (Ghosn 2012). Carlos has always believed in transparency in work and he used to listen to the advice of others and always believed that the responsibility of a CEO is to motivate people to work better and the rest falls under the responsibility of the employees.
In the view point of Max Weber, it is important to follow a bureaucratic approach in an organization where there shall be a hierarchical structure of power (Stahl and Brannen 2013). The division of labour and specialization is important and there shall be uniformity and stability in the organization (Barmeyer and Mayrhofer 2016). The leader never tried to make a bureaucratic approach in the organization and always believed in sharing of position and ability among the people working in the organization. In the early phase of 1990s, Nissan was not in a healthy position to fight against the odds of the market (Cardon 2015). It was at this time that several car manufacturers in Europe had established good market and Nissan on the other hand was only behind Toyota in Japan. It was this time, the company had made an approach of global presence and Asia became the target market for the car. In fact, Japan was observed to be the missing link and it was thus aimed to extent the company to Japan.
Analysis of the teams and decision-making in Nissan before and after the organizational change
In 1999, with the announcement of the alliance of Nissan and Renault, a history was created. As pointed out by Stahl and Brannen (2013), an organization sometimes forced to change its culture to match with the environmental changes. Changes are difficult but without undertaking such approaches, an organization does not have the ability to cope with the situation.
Neoclassical Organizational Theory
The Neoclassical theory was an attempt to incorporate a number of scientific behavioural in the management thought to improve the performance of the employees of the organization. It was observed that the role of the management is not only to employee people but to focus on other things that shall improve the production, structure as well as the technology of the organization (Lucas 2013). Neoclassical theory suggests best ways to improve and motivate people that in turn shall bring prosperity in the productivity of the organization. In the view point of Ahmadjian (2015), that employee relation is an important factor to be considered by the management. It is only when an employee finds some intrinsic values in their job that their standardization and performance can increase.
Human relation approach of the neoclassical theory had the belief that an employee shall receive special attention and could be a part of the decision making process as a supportive team in an organization (Barmeyer and Mayrhofer 2016). It is only when they are encouraged to participate, the employees find it significant to be more productive and results in high quality of work (Lucas 2013). It has been observed that when the employees are involved in certain decision making process, their increasing attention results in increase of motivation and productivity.
As pointed out by Lee (2016), that an employee shall also be involved in the decision making approach of the operation of an organization. When employees are given the opportunities to participate in the decision making, the values and preferences of each employee is known and this approach can lead to a problem solving activity. In the view point of Osland and Bird (2013), every individual has a decision making power and a major part of decision depends on the understanding and the ability of an individual. In this respect, it can be said that an experienced employee can be considered as effective to take decision in an organization.
It was in the late 1990 after the successful merger of a number of car companies, it was time for Nissan to break the market with a new acquisition with Renault (Barmeyer and Mayrhofer 2015). In 1999, the CEO of Renault as one of the market leader at that time offered $5.4 billion for the stake of Nissan. Nissan was almost at the verge of bankruptcy could not afford to turn down the offer and the marriage of the two car manufacturers was witnessed in history (Barmeyer and Mayrhofer 2016). It has to be mentioned here that Nissan was in a verge of utter loss at that time but within a few months, the leadership of Carlos was visible and Nissan gained huge profit that eventually dragged the company to global limelight. It was his charismatic charm that made his leadership worthy to be discussed in major business schools. It has to be mentioned that Ghosn’s leadership style was different. At that time when the ultimate success of a leader was to gain the position of a CEO or a managing director, Carlos always felt that the real objective of a CEO is to motivate the employees and other in the organization and the rest is to leave on those who are participants of the company (Stahl, Mendenhall and Oddou 2012).
Organizational birth and growth theory
In the view point of Vuori (2015), an organization follows a life cycle and a number of predictable stages of growth, change and decline. It has to be understood that a new organization is very fragile and any factor can lead to the decline of the organization. By the means of organizational birth, it includes the factors such as resources or ability of knowledge or skills that might help to generate similar new organizations. In the growth stage, the leader is responsible to identify the various problems and issues that arise as the organization grows. It depends on the ability of the leader to acknowledge the problems and the issues that the organization faces (Ferris et al. 2013). It is important to understand the basic things that must be taken into consideration to make changes in the organization that it becomes feasible for the organization to grow, mature and survive in the competitive market. In the death stage, it becomes challenging for the organization to survive because of the several factors that created a negative impact on the functionality of the organization. As commented by Nezu (2014), that there remains no solution for an organization to overcome the issues and due to the major weaknesses, the organization ultimately has to suffer that results in its death.
Nissan had suffered a lot as a car manufacturer in terms of its global business and to fight against the other companies that already had established their company in the market (Osland, Li and Wang 2014). The companies like Mercedes, Volkswagen are some of the examples that had huge impact on the car market worldwide. It was very difficult for a company like Nissan to fight against these companies and mark in the manufacturing market. However, if the leadership of Carlos has to be discussed here it has to be mentioned that the leader was always present with the company at its worse, by the time the company was seeking for a successful leader who could turn the company lively (Onkham, Elattar and Rabelo 2013). Ghosn was confident about his steps in business and often proclaimed that if his leadership fails, he would leave the company. In the company’s extension in the US market, it was not easy to fight with the already established brands like General Motors, Ford and Chrysler. However, the leadership quality of Ghosn could not be challenged. He adopted the culture of America as the organizational culture and established the company there with much prosperity.
According to Halff (2013), an organization has an ethical climate that reflects the personality and the morality of the leader. A leader with a collective mindset elicits a correct approach towards the operation of the organization. The employees can strengthen the self construal in the leaders by the way they communicate with others. It is important to be ethical in the business and non-judgemental as well. It is the responsibility of the leader to be more ethical and foster organizational citizenship among the employees of the organization. As stated by Binns et al. (2014), the use of formal codes of conduct and careful construction of the principles of the ethics that includes both internal and external relation with the employees and the stakeholders.
In the view point of Eisenberg, Härtel and Stah (2013), it happens at times that an organization has to act in a way that do not support the moral or the ethical value of business. In the increasing competitive market, maintaining a moral value in the organization is indeed a tough thing to do. In case of Nissan, when the company was under great demise and huge loss, shifting the company even with moral approach was a great challenge for a leader but Carlos never gave the chance of claiming him unethical and always portrayed his leadership in an ethical manner.
Analysis of Ghosn’s leadership style, in general and in relation to the specific organizational change at Nissan
If the leadership style of Carlos is taken into consideration, it can be said that no one could match the leadership style of this person even at the era when the market was hugely dominated by other car manufacturers. In Japan where Toyota had the major share of business, Nissan showed the courage of entering the region with a hope that the company shall gain the opportunity of the market of increasing demand of cars in Asia (Gill 2012). Everyone believed in his leadership and it was the faith that made him a vital member of the Nissan family. The leadership style of Carlos was different in a way because he never considered himself as the boss and dominated the other people in the organization but always acted as a mentor and motivator who motivated the people working in the organization (Kaipa 2014). It was his believe that when power is given to the members of the organization who are closely related to the working of the company, the opportunity of gaining better results in terms of innovative ideas and new techniques of dealing with the degrading situation is gained (Ferris et al. 2013). It has to be understood that people who are directly related to the organization like the employees or the other people in operation, they have better knowledge about the business and any kind of plans or methods provided from their end shall be fruitful. (Bird 2013)
Contingency organizational theory claims that there is no best way to organize a corporation or to lead a company. The success of a company depends on the ability of the leader to undertake better decisions depending on the internal and external situation where the company operates. It is based on the leadership style to fit into the right situation that the success of a company depends (Genovese 2015). It has to be mentioned that organizational culture is based on certain purposes. This culture actually serves as a guide and a way to deal with the uncertainty of the surroundings where the organization works. Any kind of changes in the surrounding is bound to affect the operation of an organization (Schunk, Meece and Pintrich 2012). It is for the same reason that the leader of an organization has to be critical enough to fight against any such odds in the surrounding.
Carlos has been considered as a successful leader because he understands the fact that without understanding the culture of the region where the company operates it is not possible to gain a fruitful result in that market (Ferris et al. 2013). As understood from the case study that no matter if it is Japan or America, Carlos had the capability of adapting himself to the culture of the specific region and shape the organization culture as well.
Maslow’s Hierarchy of Needs
According to the Maslow’s Hierarchy of Needs model, it is the human behaviour and the needs of the human that makes a person to think of the various ways that shall help a person to achieve better opportunities in life. As pointed out by Kusurkar et al. (2012), this psychology theory helps to understand the innate nature of a human. The idea of using this concept kin an organization is to understand the basic features that shall help to impoverish the human talent and make certain assumptions to grab better results from the employees working in the organization (Moors 2015). According to this model, primarily an individual looks for psychological satisfaction, following it, the person looks for safety, then comes the chance of love and belonging that is important for any person to remain in a healthy state of mind. Next is the concept of esteem and self realization and ultimately a person looks for self actualization (Lee 2013). These things are equally important among the employees or other working in an organization. It is only when an employee is satisfied enough to work for the company, the person aims at giving the best as per the ability. It is the sole reason, each an every employee must be appreciated enough to work for an organization (Ferris et al. 2013).
McGregor’s Theory X and Theory Y
Theory X and Theory Y are common management theories that develop a positive management style and technique. McGregor has pointed out two major approaches of managing people (Lee 2013). It is expected that the manager or a leader of an organization shall undertake any of the two theories to achieve better results in terms of productivity. Theory X undertakes the following issues:
When an employee dislikes the work, the person tries to avoid the work
It is then people are forced with a threat of punishment to work towards the organizational objectives
An average person also prefers to be directed towards their responsibility and perhaps wants to achieve a level of security in the work place (Schunk, Meece and Pintrich 2012)
Theory Y or the participative management states that:
Effort in work is very import
It is important that a person apply self control and self direction to pursue the organizational objectives
It is important to get committed towards the organizational objectives
In such cases being innovative and creative also solve the organizational problems
The most important factor that the potential of an individual is partly used in the industry
It is therefore, falls under the responsibility of the manager or the leader to exercise authority on the employees and to explain the matter to exert better self-direction and control over the employees.
Path-goal theory is also based on same theme that talks about the leadership style and the leader that best fits the organization. The main objective of a leader is to increase the motivation of the employees and increase empowerment and satisfaction among the employees (Ferris et al. 2013). According to the Vroom’s expectancy theory, an individual in an organization acts in a way in which the leader wants them to act (Schunk, Meece and Pintrich 2012). Therefore, leader is the one that best guides the employees in an organization that ultimately results in gaining better results in the business.
If the same situation is considered keeping Carlos in mind, it can be said that being a leader he always understood the important of planning the goals and objectives for the betterment of his organization. He always knew what he has to do. There were times when everyone doubted the leadership of Carlos and imagined the condition of Nissan at a stake but the same had been proved wrong and the company had soared high by the time when other taught that the car manufacturer have to starve in accommodating in the competitive market.
Transactional leadership talks about motivating and directing the employees by appealing them to their own self-interest. As pointed out by Schunk, Meece and Pintrich (2012), transactional leadership comes from the prior authority and responsibility of a manager or a leader in an organization. It is the duty of the employees in an organization to obey the instruction of the leader. In addition to this, it has been known that a leader is responsible for motivating the employees. In the view point of Barmeyer and Mayrhofer (2016), there are certain subordinate programs that are important to achieve a routine performance goal in the organization. Four dimensions have been acknowledged in this respect:
Contingent rewards: It falls under the duty of the transactional leader to link the goals to the rewards, providing necessary resources that shall ultimately provide reward for successful performance.
Active Management by Exception: The leaders are expected to actively monitor and intervene the performance of the employees and maintain a standard of deviation to form corrective actions upon the employees with respect t to previous mistakes (Barmeyer and Mayrhofer 2016).
Passive Management by Exception: It is when the performance expectation of an organization is not met by the employees the leaders have the authority to punish the employees as a response of the unacceptable performance (Deinert et al. 2015).
Laissez-faire: A leader should provide an environment where the employee or the subordinates get opportunity to make decisions. If the leader is not efficient enough then the group often have to suffer.
The leader understood the importance of rewarding the people and sharing the success with the people who are behind the success. The long drawn issues regarding the integration of their models and system was seemed to dim away and there was a new awakening of the long drawn war to make the car manufacturing company successful and competitive to fight with the existing car giants in the market. When there was a huge declination of job and reduction in the production capacity of the company, Carlos hold the responsibility of making positive effort on the working of the organization (Deinert et al. 2015). The creation of the cross-functional teams and the introduction of various motivation factors like incentives and bonus created great positive impact on the production and the sale of the car units worldwide.
By the end of the discussion it can be said that Carlos was truly a global leader who took the complete responsibility of the organizational change in Nissan at the time when the company was at utter loss. The expansion of the company was one of the approaches taken by the authority to improve the degrading condition of the company. As a leader Carlos was an efficient person. With every expansion, he had showed his ability to cope with the environment and became a part of that country by adopting the culture and the way the market of that nation works. When the company was expanded to America, Carlos very efficiently adopted the culture of the country and made a successful approach towards the business. It has been observed that Carlos is a brave leader and accepts challenges easily. His ability and challenging attitude differentiate him from the other leaders of his era. He believed in disseminating power among the other employees and stakeholders of the organization. This shows the scientific and collective approach of Carlos as a leader.
With the change in the region of operation, Carlos had always approached for the change in the organizational culture. The leadership quality has created a prime example among others. It can be easily assumed that the recent position of Nissan in the market is due to the successful effort of a leader like Carlos whose far sightedness and continuous effort had created great impact on the business of Nissan and helped it to achieve the position where the company currently stands at. The leadership of Carlos has made the advent of the company a success in major places like America or Asia. Nissan is a well to do brand in the recent perspective and has been able to mark a great share in the market of these countries.
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