Assignment

Case Study

“Carlos Ghosn: Hero or Villain”

(MBA (36-E)-2(G)

Rabia Zaki
1935332

Course
BA5104 Strategic Management
Course Instructor
Seema Kamran
Assignment

Answer Following questions based on class discussion on Corporate governance and your prior

assigned reading on case “Carlos Ghosn: Hero or Villain”

I. Conduct stakeholder analysis for Nissan and develop power/attention matrix.

Stakeholder Analysis

Step 1: Identifying Stakeholders

Carlos Gohsn CEO Shareholders / Board of French & Japanese Government

Directors
Customers Employees Alliance Partners (Nissan,
Mitsubishi, Renault)
Competitors The Press Key advisors / Executives
Financial Community

Step 2: Prioritize Your Stakeholders (stakeholder needs & interests)

• French • Shareholders /
Government Board of Directors
• Japanese
Government

• Alliance
Partners
• Key Advisors

• Financial
• Competitors • Customers
Community

• The Press

• Employees
Step 3: Understanding the Key Stakeholders

Power Indicators Attention Factors

Within the Status Claim on Representation Criticality Channels Cognitive
Organization Resources Capacity
Carlos Gohsn High High High High Good High
Shareholders/ High High High High Good High
Board of Directors
Key Advisors / High Medium Medium High Good High
Executives
Employees Low Low Low Medium Fair Medium
Alliance Partners High High High High Good High

Power Indicators Attention Factors

Outside the Status Resource Negotiation Criticality Channels Cognitive
Organization Dependence Arrangement Capacity
French Medium Low High Medium Good High
Government
Japanese High Medium High High Good High
Government
Competitors Low Low Low Low Fair Medium
The Press Medium Low Low Low Good Medium
Financial Medium Low Medium Medium Fair Medium
Community

Three factors of attention:

• Criticality: How much does it matter to the stakeholder?

• Channels: Are the communication channels good?
• Cognitive capacity: There may be too much information to process effectively

II. Reasons for analysis and plotting stakeholders in different quadrants:

As indicated by the table above the stakeholders fall into different scales on power indicators and
attention factors. We see that in general the shareholders and government rank high on both power
and attention factors and therefore are the key stakeholders. Similarly, Alliance partners and French
government have high stakes in the situation too.
Stakeholder Analysis Matrix

Stakeholders Stakeholder Stakeholder Stakeholder Assessment of Potential

Interest Power Attention Impact Strategies
Carlos Goshn - High High High High
CEO
Shareholder/ High High High High Information
BOD and feedback
meetings
French Govt Medium High Medium High Exercise
control on
institutions
Japanese Govt High High High High Exercise
control on
institutions
Customers Medium High Medium Low
Employees Low Medium Low Low
Alliance High High High Medium Conduct
Partners monthly
meetings to
ensure
uniformity in
objectives
Competitors Low Medium Medium Low
The Press Medium Medium Low Low
Key Advisors/ High High Medium High Internal
Executives discussions on
performance
and company
revenue
Financial Medium Medium Low Medium
Community
III. Which parts of governance chain – principal and agents failed at Nissan?

The parts of governance chain that failed at Nissan comprised of board of directors and Senior
Executive – Carlos Goshn. Carlos Goshn can be identified as an agent while Directors as
principal. Moreover, there was a conflict between the government and the Executives at Nissan.

This failure was majorly caused by lack of transparency and accountability of senior executives.
Carlos Gosh used his authority and success erroneously to embezzle the funds of Nissan and
used them for his own personal benefit. There was lack of regulation on the part of shareholders
who overlooked the situation and voiced the concern when the government became involved.
Moreover, the problem arose because there was imbalance in the authority delegated to the
senior executives by the Board of directors. There were knowledge imbalance agents knew
more than the principal.

IV. What problems (knowledge, monitoring or incentives) led to scandal? What would you change
to avoid these problems in future?

The problem that led to the scandal was lack of effective monitoring and knowledge imbalance.
In order to avoid this problem in future I would have devised a separate auditing committee to
keep a firm check on company’s financials and use of funds.
In order to make sure the knowledge imbalance doesn’t occur, there should be involvement of
nominees of board of directors in important organizational meetings.