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How Carlos Ghosn Successfully Ran Renault and Nissan Together

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Added on  2019-09-19

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Carlos Ghosn faced the challenge of running both Renault and Nissan successfully. He implemented cross-functional teams and revamped the compensation system to focus on performance. He also defined the company culture and engaged with employees to boost morale. Joint purchasing, R&D, common platforms, and distribution were also implemented to reduce costs and increase efficiency.
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SummaryThe retirement of CEO of Renault, Louis Schweitzer, Carlos Ghosn was in a dilemma of how to run Renault and Nissan at the same time in a successful manner. Carlos Ghosn was posed with a challenge of implementing successful techniques and utilising his experience so as to run both the companies in a profitable manner. The first step was to use the Cross Company (CCT) along with Cross Function Teams (CFT) for creating open communication between both the companies. The experience of Ghosn was highly successful in proving the efficient profitability of Renault. Secondly, Ghosn had to boost employee engagement and employee morale for creating a productive company culture. Therefore, he walked the plant floors at Nissan and interacted with the various employees and talked regarding their culture. He further assured the employees that no layoff would be performed and engaged with them to increase the productivity. Ghosn cleared out the importance of corporate culture right and mentioned that culture is important than the resources of the company. He dumped the seniority rule and started promoting the capable younger employees. The whole team reviewed performance records of theemployees and changed the long-standing practices.The whole compensation system was revamped so as to focus only on the performances as there were no incentives in the system. The previous system did not give a considerable amount of incentive to the upper management. Nissan changed it all and offered high incentives to the high performers which amounted more than one third of their annual pay packages along with variousstock company incentives. One another problem encountered during the whole scenario was inability of accepting any responsibility. In the case of poor performance, the company blamed another one. The sales department saw to blame product planning which in turn blamed engineering and engineering
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