The Role of Leadership in Improving the Performance of a Team

Nissan, a Japanese automaker, was faced with a serious decline in profits for a period of eight years. The company was almost being declared bankrupt when Renault, a French automaker, stepped in to assume part of Nissan’s debt and save the company. The two companies entered into a deal where Renault appointed Carlos Ghosn to become the chief operating officer for Nissan. The appointment of Carlos Ghosn as the Chief Operating Officer (COO) was aimed at providing effective leadership for the falling company. This paper begins with examining what Ghosn did to improve human relations, adaptation, and efficiency of the company and how potential trade-offs among these performance determinants were handled within Nissan Company. The paper also analyzes effective change management practices that were employed at Nissan in order to achieve goals of the company. Ghosn introduced a series of changes that helped Nissan return to the world’s automobile market. Ghosn displayed a range of traits and skills that were necessary for the empowerment of Nissan’s employees to  

What was done to improve efficiency, adaptation, and human relations, and how were the potential trade‐offs among these performance determinants handled?

Human relations, adaptation, and improving efficiency are crucial goals that businesses aim to achieve mainly when making significant changes in daily operations. The appointment of Carlos Ghosn as the COO was aimed at providing effective leadership for the falling company. Ghosn began by learning more about his new company before he commenced implementing changes. His first effort was creating nine cross-functional teams that were mandated with the responsibility of determining the best actions that would guarantee revival for the company. The team identified problems and came up with several suggestions that would improve efficiency, adaptation, and human relations. They identified that the poor financial performance of the company was due to excessive costs and declining sales which were caused by weak management that failed to address these issues. In addition, there was little cooperation across functions.

Ghosn focused on reducing the excessive costs that were caused by the company operating only half of its capacity in the factories. He shut down five of the Japanese factories to enhance Nissan’s efficiency and eliminated more than twenty-one jobs which were 14 percent of the company's global workforce. Furthermore, he reduced the number of car platforms by half and the number of powertrain combination by a third in order to simplify production operations. However, these moves by the COO had a negative impact on the relations with employees. Ghosn was sensitive on his relationship with his staff and he applied natural attrition, early retirements, offering part-time opportunities in other company facilities, and selling subsidiaries. These approaches helped boost the morale of the employees who were retrenched and those who remained with the automaker as they would not face traumatizing experiences such as survivor syndrome.

What traits and skills can help to explain the successful strategic leadership by Ghosn?

In Nissan Company, Ghosn employed good traits and skills that ensured that the automaker comes out of the crisis that it had faced for eight years and meet the goals that he had established. Ghosn displayed a range of technical skills when he reduced the number of powertrain combinations by a third and the number of car platforms by half. These steps indicate his understanding of the various technical processes within Nissan and his strategic leadership in managing them to achieve outlined goals. Ghosn also exhibited interpersonal skills in how he handled the relationship with employees after 21,000 jobs were eliminated. He took steps to ensure that the staff understands why the retrenchment was necessary and identifies who would be affected. Finally, he proved conceptual skills by implementing cost-cutting initiatives by reducing the number of suppliers, employees, factories, and dealers that helped lower the production costs by almost 20 percent. Yukl (2013) explains that a charismatic leader displays self-confidence, enthusiasm, and willingness to take risks. In Japan, there was fear among organizational managers to take risks that threaten the stability and security of their companies. However, Ghosn challenged this culture by introducing practices such as cross-functional teams and reducing the number of suppliers and dealerships that have never been experienced before. Finally, he portrayed innovation when he hired a designer to help the company come up with new car designs that meet the needs of its customers.    

Factors that determine the performance of a team

The performance of a team is determined by factors such as cohesiveness among the members (English, Griffith, & Steelman, 2016). In teams where there is high cohesiveness, the willingness and commitment of members to strive for excellence is high. Team cohesion impacts how people respect and trust one another’s opinions and abilities, how they get along with each other, and also how they like one another. There is also homogeneity which is how team members are different or similar to one another in skills, abilities, education, personal characteristics, and cultural background among other factors. Teams that are homogeneous are highly cohesive and they have a high performance. However, where there is high homogeneity there are high chances of groupthink. 

Why external monitoring is important for strategic leadership

External monitoring in organizations is important for strategic leadership as it challenges the views, opinions, and decisions that are made by the managers. An external monitoring involves a team of experts who guarantee better decision-making process among leaders. 

Discuss what leaders can do to become more transformational

Leaders must easily adapt their leadership style to the different skills, personalities, and needs that are present in an organization (Grandy & Sliwa, 2017). They should also encourage creativity and give support, remove barriers, and provide resources where necessary. As a transformational leader, one must set a vision, strategy, and goals that will help guide the team in the right direction.  Finally, they should act as a role model for their followers by talking and behaving with integrity and ethical standards.

Differentiate between similarities and differences between charismatic and transformational leadership

Charismatic leadership shares several similarities to transformational leadership while the differences are recognized in the focus and audience of the two styles. Transformational leaders focus on changing their organization according to their vision and goals while charismatic leaders use their personality and actions to engage their followers and offer a clear direction. The two leadership styles depending on the ability of the leader to inspire and influence the followers to work towards the achievement of specific goals. Therefore, they serve to achieve a shared goal.

Conclusion

Carlos Ghosn was able to fully transform the Japanese automaker, Nissan. He displayed a range of traits and skills that were lacking in the company to identify and eliminate problems in the business. He introduced practices that were considered ineffective in the Japanese culture such as cutting down the number of dealerships, supplier, employees, and factories. However, his effective change management practice proved to be operational as they helped lower the company’s production costs by twenty percent. 

References

English, A., Griffith, R. L., & Steelman, L. A. (August 19, 2016). Team Performance. Small Group Research, 35, 6, 643-665.

Grandy, G., & Sliwa, M. (July 01, 2017). Contemplative Leadership: The Possibilities for the Ethics of Leadership Theory and Practice. Journal of Business Ethics, 143, 3, 423-440.

Yukl, G. A. (2013). Leadership in Organizations, 8th Edition. [Bookshelf Online]. Retrieved from https://online.vitalsource.com/#/books/9780133468090/.