Carlos Ghosn: A Case Study

Submitted by:
Abira Imran-16814
Bilal Murtaza-16706

Leadership journey as CEO Nissan

Leadership is crucial for the success of any organisation. It functions to inspire followers to work
collectively in a bid to achieve specific goals within an organisation and serves to integrate and
intertwine followers and leaders with influencing organisational objectives and missions and
other stakeholders.
Carlos Ghosn, the leader of the Nissan Company, exemplifies how leadership can help to yield
success for manufacturing companies across the globe. Having joined the Nissan Company in
1999 as COO and later as CEO in 2000, he promised to consider resignation if he failed to
ensure profitability by 2005 in an organisation that had accrued a debt of $20 billion.
Turning around an organisation from losses to profit making requires leaders to change the
cultures and approaches of executing business. One of the concerns in doing so was the need to
comply with the Japanese business etiquette standards. Despite being aware of these challenges,
Ghosn chose to defy them and set about to auction some of Nissans enormously prized assets in
the aerospace unit, cut off the company workforce by 14% and close off 5 of the domestic
manufacturing plants of the company. Although this was the most appropriate move for the
future of the company, he was always open and welcomed criticism from the public.
Ghosn’s efforts to achieve his visions were not entirely in vain. He altered the way things were
being done as per the Japanese business culture by ensuring that promotions were based on
individual performance, failure to attain which amounted to demotion. From the leadership point
of view adopted by Ghosn, employee motivation was the main tool of achieving his strategic
visions and missions. He changed the culture of promotion to the usage of expertise and talent
potentials by his workforce. Not only this, he also diversified the organisation to make it more
inclusive and in order to tap into more potential so that the employees would behave and think in
terms of enhancing the success of the company.
He then went on to look for mechanisms that would enhance transparency and increase
management consensus in decision making to mitigate the risk of resistance to change. This
influence was very useful and effective for Ghosn since he needed somebody to set a new
direction towards Nissan’s success.

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Generally in failing organisations, strategy accounts for 5% of the success and 95% of it mainly
entails the execution of the said strategies requiring people management. Therefore, it was
appropriate to pay attention to followers and their perceptions, motivations and reactions to
change as although Ghosn had developed the plan for success, he required people to implement
it.
Before Ghosn took over leadership at Nissan, its culture encouraged collective workforce
accountability for the mistakes of one individual. After Ghosn, accountability was more
individual and solution oriented whereby Ghosn would have the employee in question present
solutions to the mistakes rendered.
Ghosn’s leadership style was always considered transformational by those working in Nissan.
This was a man who, for nearly 20 years, tested the question of whether an outsider could ever
really become part of corporate Japan. Within the country, Ghosn was one of the few foreign
CEOs singled out for real praise.
Ghosn had always been ambitious. He landed his first job at Michelin and was poached by
Renault in 1996, for a radical restructuring that transformed the French carmaker. In 1999,
Renault rescued Nissan from near-bankruptcy in a deal that ultimately left it with a 43 per cent
voting stake in the debt-laden Japanese carmaker. Ghosn, then a vice-president at the French
company, was sent to Tokyo. Many Nissan employees, who were losing faith in their own
management team, were mesmerised by his charisma. 
“The power of his presentation was amazing. I thought Nissan would not be able to change
without someone like him.” 
The now famous “Nissan revival plan”, released just four months after Ghosn was named the
group’s chief operating officer in June 1999, was widely acclaimed for its success in
transforming a troubled company into a profitable carmaker within a year. 
Even his fiercest critics acknowledge Ghosn’s ability to deliver results, with his razor-sharp
focus on performance and numerical targets.
“The initial V-shaped recovery was not achieved because he was a foreigner, but it was because
he was Carlos Ghosn,”
- Yutaka Suzuki, a former Nissan
executive
In late 1990’s, people who worked with him describe a boss who talked to staff, suppliers,
dealers and factories, and whose management style was open and transparent. 
Ghosn’s drive inspired those around him. “He had a technique in those days of almost making
you feel you could do the impossible,” recalls a former Nissan executive. In turn, he demanded
his staff be as flexible, and globally footloose, as him.

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One person who worked alongside him said that if he was disappointed in the performance of an
underling, he would give them a chance to explain why and to come up with a plan to fix it.
“Ghosn didn’t like conflicts. He didn’t want to force people to do things. He was an excellent
listener”

Ghosn’s escape from Japan

In 2005, Ghosn was appointed Renault’s CEO, putting him at the helm of two companies and
creating the concentration of power that Nissan executives would later claim led to glaring lapses
in governance standards.
Having successfully saved Nissan, Ghosn was driven by his search for scale-he wanted to create
a bigger automotive empire despite having leadership of both Nissan and Renault. However, it
was progressively harder to balance the needs of the businesses he ran with this kind of vision.
‘He lost sight of the business. He tried to make the alliance bigger and bigger to overcome
Toyota and Volkswagen. That was his ambition, but it was too much to pursue for a leader.’
He envisaged a merger between Nissan and Renault but his ambition wasn’t why he faced a
downfall. His camp blames his downfall on governance and corporate conspiracy. However, the
charges of understating his compensation by more than $80 million, falsifying financial
statements and misusing company assets for his own gain held weight. Company documents and
extensive interviews with current and former executives of Nissan and Renault, government
officials, financial advisers and confidants form a picture of a business leader whose long years
at the top had made it difficult to tell where his dreams for his companies ended and his personal
ambitions began.
Patrick Pélata, a former chief operating officer at Renault, who left the company in 2012 and is
now an automotive consultant.shed some light on how Ghosn’s leadership changed over the
years. She said, “Carlos Ghosn was, from 1999 to about 2005, a much more collaborative boss,
constantly visiting the  gemba — the factory floors — talking to the employees, but he hugely
changed as a boss over the years . . . He became more autocratic and told people he did not want
to see problems.”
His colleagues add that his change in management style was driven by necessity and time
constraints rather than a fundamental shift in management philosophy or approach.  His
increasing responsibilities meant Ghosn stopped attending annual meetings with key Nissan
dealers, who grew frustrated. The company’s position in Japan fell from number two behind
Toyota to number five. In Spring 2016, dealers demanded “Q&A time” with Ghosn to grill him
on Nissan’s flagging performance. 
“Before, there was a sense that he would listen to our voices on the ground and manage the
company together, but that feeling of unity was lost,” says the head of a large dealer for Nissan
in Japan. 

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He had begun to refer to himself as the “re-founder” of Nissan.  As the company’s financial
position became healthier, his colleagues observed that he was increasingly preoccupied with his
own reputation. His suits became sharper — a new Louis Vuitton number was ordered for every
motor show. “The PR function was essentially there to serve his public image, way beyond what
it was supposed to,” says one former employee. 
Jean-Marc Daniel, an economist and university friend of Ghosn, says that even as the former
Nissan boss gained confidence as a manager, he constantly battled a sense of exclusion and a
need to belong both in France and Japan.  “He was always just outside the real circle,” Daniel
says. “He felt he had to protect himself, gather wealth, become more authoritative, but that in
turn isolated him more.” 
“Part of the problem stemmed [from] Nissan executives who let their guard down and were
afraid to speak up against Ghosn,” says Suzuki. “That resulted in an environment of
complacency where Ghosn felt he could get away with anything.”
His former colleague at Renault who worked with him for nearly a decade added: “The one thing
that has never changed is his relationship with money. He always thought it was a measure of
success.”
Towards the end of his professional career at Nissan and Renault, it seems that Ghosn had
changed from an individual who worked with his employees in aligning the company objectives
to an individual who worked in silo and in alignment of his own personal need for control and
power rather than the organisations’.

Conclusion
They say ‘a man with too much ambition can never sleep in peace’
The Carlos Ghosn case seems to be reflective of this very quote by Mark Perret. A man who
started off with a strong vision, a resolve and the ability to take enough risks for the success of
not only his own vision but also the eventually collective vision of his employees at Nissan led to
his fame as an ambitious, transformational leader who celebrates his workforce and ensures
delegated decision making for transparency, eventually faced his own downfall not necessarily
because of an ill-intent but more because his vision was fearful to the enemy, worrisome for
those closer to him and almost questionable for those who witnessed his growth.
Soon his responsibilities surpassed his ability to work around his vision successfully and as
quoted by his colleagues and friends, his approach towards leadership and his personality both
started changing to the norms of the corporate instead of to those of Renault and Nissan. It also
seems true that his vision held leverage but so did the fact that he was an outsider in Japan with a
little too much of corporate influence in his hands.
To run a global carmaker in the early 21st century — amid threats from upstart electric car
brands, competition from ride-sharing companies such as Uber, and deepening changes in

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consumer behaviour — requires ambition, vision and decisiveness.  These qualities made Ghosn
a uniquely brilliant leader for many years. But over time, and taken to an extreme, they became
liabilities rather than assets. Ultimately, they proved his downfall.

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