Nissan Merger Case Study

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The Nissan and Renault Merger (March 1999)
As Nissan was in such an immense financial difficulty, a merger with another auto company would prove beneficial to Nissan both from financing and management point of view. Around the same time, Renault was looking for a partner to expand at the global level. Around the year of 1997, Renault’s revenue was earned majorly due to the European Market and most of the remaining from Latin America. Renault was targeting the Asian and North American markets and they were able to obtain such an opportunity by a merger with Nissan, which had a dominant market in Japan and North America. In terms of know-hows, Renault would gain access to Nissan’s engineering and manufacturing expertise, while Nissan would benefit
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It included Development of new automobiles and markets, Improving Nissan’s brand image, Reinvestment in R&D and Cost reduction. The successful implementation of NRP resulted in its achievement one year ahead of schedule. There was 20% reduction in costs; reduction of 21000 jobs and the number of plants were reduced to 4 from 7, producing automobiles based on 15 platforms then 24 platforms. The execution of NRP was swift, relentless and without compromises.
The Hoefstede Dimensional Theory’s correlation with the practices employed by Carlos Ghosn at Nissan
The first dimension, the Power Distance measures the vertical and horizontal distance between individuals in a hierarchy. Carlos recognized the gap between the employees and used it to the advantage of the company. He formed Cross Functional Teams where mid-level managers were involved on a high scale. They started developing a sense of responsibility. In Carlos’ new system if something goes wrong then the individuals will be blamed rather than the
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Leaders who follow such a style impose their ideologies on the employees. But Carlos had in fact embraced the cultural differences and he believed strongly that these cultural inequalities could provide opportunity for development and growth. “If you have to work and do something significant in a country it is much easier if you connected with the country and the culture" (Carlos Ghosn). But Carlos showed a few traits of the coercive leadership style up to a certain extent. He carried out strict discipline and eliminated all those employee positions that carried no
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