Essay by tugba68University, Master'sC+, November 2014

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Case Study: Reinventing Nissan

Case questions:

Main benefits for Nissan in this combination on a global basis are avoid bankruptcy, reduce its debts, selling out its parts in the keiretsu system it was implicated in, open the European and the American market to Nissan.

Carlos Ghosn restructuring Nissan's group to helped establishing innovative suppliers and reducing suppliers costs up to 60%. Ghosn making English the Nissan's company language, also was a benefits to Nissan, it's granted the company opening to the global market.

According to Japanese cultural values breaking up keiretsu system as always been considerate taboo and Nissan losing its faith in keiretsu system was a great threat. Ghosn announced a restructuring plan which included eliminated 16 000 positions in Japan. Keiretsu is a circle of relative stockholders which encapsulates business relations. Its purpose is multiple, cross holdings of stocks during the economic growth in the 50's and 60's.

30-50% of stocks are cross-held by companies in the keiretsu, preventing take-over by outside investors.

Nissan abandoning the keiretsu system for purchasing parts created some problems: (e.g.) some suppliers went bankrupt. On a cultural aspect Nissan top management will cut of the link that united them to supplier's top management that mostly was friends or relatives. In Japanese culture this is considered as a roughness, dishonor and a loss of face.

The internet would help to facilitate this change by providing easy exchanges for Nissan and its suppliers. It would allow for easier access and smooth global business practices between Renault and Nissan.

Natural attrition is challenging Japanese labor traditional lifetime employment. In order to avoid lay off employees, Carlos Ghosn could reconsider to assign people to other countries that Nissan has a plant or not; he can assign to others countries to achieve cost advantage of resources through globalization...