Manegment theory and practice case study Essay Example | Topics and Well Written Essays - 1500 words

Manegment theory and practice case study - Essay Example In 1999 Nissan was the third largest car manufacturing company in Japan and around the world. However in comparison to 1996, when Nissan had last made a profit its production was down, its market share was slipping, it losses mounting and utilization of production capacity was poor. There was an urgent need to find a suitable alliance partner, willing to invest in the company, if Nissan were to survive (p. 3). Renault on the other hand in 1999 had become lean through restructuring and downsizing was in a position to make strategic investments to further its future business activities. Renault mainly operated in Western Europe, from where it derived 85% of its revenue. Renault had limited activities in the important geographical regions of Asia, North America, and Eastern Europe. (p. 4). Investing in Nissan was attractive to Renault, as it provided Renault access to the important markets of Asia and North America due to Nissan’s active presence in these markets. However, there were major issues in the form of the organizational culture variances, diversity in the workforces of the two companies and management practices that would pose major problems in the smooth merger of these two car manufacturers and the changes that would have to be brought about in the corporate culture and management practices at Nissan (p. 5-6). After long drawn negotiations the alliance between Renault and Nissan came into being in 1999, with Renault acquiring 36.8% stake in Nissan. Carlos Ghosn from Renault was appointed as Chief Executive of Nissan and given the responsibility of leading through the restructuring and developing of Nissan focusing on the objectives of the Nissan Revival Plan (NRP) actual profitability by 2000, an operating profit greater than 4.5%, and reducing debt by 50% at the end of the fiscal year 2002 (p.7). The rest of the story is the manner in which Carlos Ghosn through inspired leadership achieved the seemingly impossible