Essay on Organizing and Managing across Cultures

The case study is about Carlos Ghosn, a well-known businessman who is the Chairman and CEO of Japan-based Nissan company. He also holds the position of the Chairman and CEO at Paris-based company Renault. These famous companies produce high-quality cars. In addition, Carlos Ghosn holds the position of the Chairman and CEO of the Renault-Nissan Alliance, that is known as the effective strategic partnership of the above mentioned companies. It is known that cross-cultural management techniques are of great importance as they help managers and leaders to organize work in a proper way and to manage the company’s employees in a culturally-diverse working environment. Today, due to increasing globalization, the managers and leaders should be more sensitive to the cultural aspects of decision-making process in the organization (Thomas, 2008, p.12).

According to the case study, there are a number of problems that are largely related to the problems of management. It is known that in 1999, Carlos Ghosn analyzed the situation in Nissan and identified the major reasons of Nissan’s failure to do business in the global competitive market. First of all, Carlos Ghosn stated that Nissan management failed to measure the company’s performance. The company’s management had no appropriate information to evaluate the performance of the company. Secondly, there were serious problems with customers’ demands and needs. Nissan’s products did not satisfy the customers, because the cars were produced in reaction to competition in the market. Thirdly, there was no “sense of urgenc” in the company’s development (Kets de Vries & Florent-Treacy, 2010, p.197). Fourthly, there were serious problems with strategy. Carlos Ghosn states that the company had no clear strategy to do business in a proper way. Fifthly, Nissan had problems with team culture. It was so strong that “discouraged transversal collaboration” (Kets de Vries & Florent-Treacy, 2010, p.197).

It is known that in order to improve situation, Carlos Ghosn, as an experienced and effective leader, decided to implement a number of methods for the company’s revival. His methods included the following: elimination of job positions, reduction of production, reduction in number of suppliers, sale of unprofitable company’s investments, and production of reduced number of models which shared platforms with Renault.

The main peculiarity of Carlos Ghosn style of leadership was concluded in his ability to realize the significant role of cross cultural management. He formed a number of cross-functional management teams in his companies in order to find and implement the best practices among the employees of different nationalities, including the French, the Japanese, the Brazilian and other nationalities.  His experience of work in multicultural Brazil created the so-called basis of his effective cross-cultural management style. It is known that he pays special attention to diversity in the workplace as a key business component. Once he said that “You learn from diversity… but you’re comforted by commonality” (Ghosn & Ries, 2006, p.56).

According to Forbes Magazine, Carlos Ghosn is “the hardest-working man in the brutally competitive global car business” (Muller, 2009, p.1). The mass media in Japan calls him “Seven-Eleven”, a person who works hard from early morning till late at night. He speaks four languages and has French and Brazilian citizenships. He also has direct relation to Lebanon where Carlos Ghosn spent his childhood. The above mentioned facts prove that Carlos Ghosn is a unique person who pays special attention to diversity and cross-cultural management. According to the opinions of Nissan and Renault’s employees, Carlos Ghosn is a good communicator in business. He is open to communication and uses his analytical and decision-making skills.

Besides the serious changes in Nissan company, Carlos Ghosn tried to convince Renault’s managers to make changes in this company too. In his work, the outstanding leader used different effective techniques to reduce cross-cultural barriers. He paid special attention to the research which helped to adapt to the foreign culture and business practices, used different communication strategies, and took into consideration local traditions of the employees. It is known that before the creation of the strategic alliance between two companies: Renault and Nissan, one of the companies -Renault made a so-called agreement to be sensitive to the culture of Nissan company. Carlos Ghosn is one of those leaders who effectively use cross-cultural management strategies in their work.  First of all, he decided to choose good managers from Renault company in order to help him in Nissan. Carlos Ghosn explained those people that they should respect Nissan and the culture of Japan. Ghosn decided to mobilize existing Nissan managers by creating several cross-functional teams which consisted of 10 members each. These cross-functional teams helped him to develop an absolutely new corporate culture which included the major elements of Japan’s national culture.

Taking the above mentioned information into consideration, it is necessary to find some key issues and problem areas. According to the cultural dimensions theory developed by Professor Geert Hofstede, who is well-known for his comprehensive studies on how the values in the workplace are influenced by the culture, Carlos Ghosn used several dimensions, such as long term orientation, and power distance. However, he failed to implement the following dimensions: individualism vs. collectivism, uncertainty avoidance index,  masculinity vs. femininity, indulgence, vs. restraint that are of great importance in cross-cultural management. According to Geert Hofstede, “culture is more often a source of conflict than of synergy. Cultural differences are a nuisance at best and often a disaster.” (Hofstede et al., 2002, p.12). He states that although people are different, deep inside they are the same. That is why it is very important to know about other countries’ cultures and to minimize all cultural differences. It will help to avoid any misunderstandings between people from different countries of the world who depend on the workplace emotional climate.

It is necessary to conclude that there are some problems in Carlos Ghosn’s case study. First of all, he did not give his employees an opportunity to use their initiative and to represent their points if view on this or that issue. Secondly, Carlos Ghosn’s rule was not to take work home. This technique is a failure because at home the employees could have a chance to improve their performance, and to develop new business ideas. Thirdly, he did not use cross-cultural adaptation theory as many of his employees had no opportunity to communicate according to the norms and practices. Fourthly, Carlos Ghosn did not like to answer personal questions, and he was not interested in responses. It means he had some secrets and did not want his employees to know the truth about his life.

In this case, it is recommended to use the main dimensions of Hofstede in order to succeed in business. All employees should act according to cross-cultural adaptation theory and integrative communication theory. It is very important to give the employees freedom of actions.

CONCLUSION

In conclusion, it is necessary to say that today due to the globalization of the business environment that is influenced by both technological and economic factors, there is a necessity to different cross-cultural interactions in the company. That is why it is very important to understand the impact of culture on interpersonal interactions in any company or business organization. It requires implementation of the effective international management. The case study discussed in this paper gives an opportunity to understand the significant role of cross cultural management. Carlos Ghosn as an effective leader could use different methods and strategies to improve Nissan’s position in the competitive market. He applied his experience and knowledge from Renault. As a transformational leader, Carlos Ghosn enhanced the employees’ morale, motivation and performance. He managed to connect the employees’ sense of identity and self to the company’s mission. He acted as a role model for his employees and inspired them. Moreover, he understood the employees’ strengths and weaknesses in order to give them the tasks to improve their performance.  Some failures in Carlos Ghosn’s  activity should be compensated by the use of cross-cultural theories.