Case #17
“Nissan Motor Co., Ltd., 2002″
Harvard Business School Case #9-303-042 (Rev. Dec. 9, 2002)
There is no Teaching Note available for this case at the
publisher’s website (http://www.hbsp.harvard.edu).
ABSTRACT
Nissan was in deep trouble around 1992 – 1993, when its
market share continued to decline and debts and losses continued
to mount, in spite of several major attempts at a turn around. In
TEACHING OBJECTIVES
The objective of this case is to study, while invoking the
basic engineering management functions of planning, organizing,
leading and controlling as a template, the steps Carlo Ghosn took
SUGGESTED QUESTIONS FOR CLASSROOM DISCUSSION
1. When the Nissan Revival Plan was developed, which activities
initiated by Carlo Ghosn and Nissan employees were related to the
management functions of (a) planning, (b) organizing, (c) leading,
and (d) controlling?
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5. If you were heading up the Nissan product development
programs, what additional efforts would you want to initiate to
make Nissan even more competitive with its Japanese and US
automotive rivals?
ANALYSIS
1. When the Nissan Revival Plan was developed, which activities
initiated by Carlo Ghosn and Nissan employees were related to the
management functions of (a) planning, (b) organizing, (c) leading,
and (d) controlling?
Under the leadership of Carlo Ghosn, Nissan employees took
various actions which may be classified as follows:
A. Planning – setting objectives, forecasting, planning actions,
formulating administrative policies and establishing procedures.
The Nissan Revival Plan (NRP) set a number of challenging
objectives. Examples include returning to profitability by 2000,
B. Organizing – selecting an organizational structure,
delegating, and establishing working relationships.
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Ghosn set up an Executive Committee and nine cross-functional
teams to break down the bureaucratic barriers of the old Nissan
organization. Each team was headed up by two leaders with
extensive line experience and strong personal creditability. He
He also organized a National Advisory Council to review
promotions at senior levels.
C. Leading – Deciding, communications, motivation, selecting and
developing people. Nissan changed its personnel system by
rewarding and promoting employees based on performance, not on
the traditional measure of seniority. Ghosn motivated people by
engaging in open communication with employees at all levels. He
appointed two leaders to each cross-functional team in order to
establish authority and maintain focus.
D. Controlling – Setting performance standards, evaluating and
controlling performance.
Ghosn required the cross-functional teams to generate
recommendations which were aggressive and based on specific data.
He rejected the outputs from the purchasing cross-functional team
on the basis that they were inadequate and demanded that they be
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2. In your view, in what ways was the Nissan Revival Plan unique?
The Nissan Revival Plan (NRP) was unique in that it was risky
in nature, comprehensive in scope and immediate in implementation.
In order to slash procurement costs by 20%, Ghosn decided to
modify the Keiseitu cartels by selling off the shares that Nissan
had invested in some of its major suppliers. Nissan then
minimized the number of suppliers and required all of them to
Employees who are close to the actual working process know
best what to do to eliminate wastes and to promote efficiency.
Their recommendations are usually most practical and valuable.
This process of proactively engaging employees to participate is
highly motivating as all employees felt that they were a part of
the overall plan. Any plan is only as good as the quality of its
implementation. Employees who are highly motivated will ensure
that the plan will be implemented successfully.
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3. What were the major factors responsible for the success of
the Nissan Revival Plan?
The major factors responsible for the success of the Nissan
Revival Plan are: (a) clear objectives and goals with
quantitatively measurable standards, (b) open communication, (c)
4. Ghson arrived in Japan to single-handedly head up Nissan. In
your view, which of Ghosn’s leadership characteristics were the
primary reasons for his success?
Several characteristics stand out: (a) clarity of vision; (2)
communication skills; (3) straight-forward, direct, simple and
clear priorities; (4) precise and quantitative objectives; and (5)
focus on implementation to emphasize action, speed and results.
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5. If you were heading up the Nissan product development
programs, what additional efforts would you want to initiate to
make Nissan even more competitive with its Japanese and US
automotive rivals?
In the product development area, there are still a few more
things Nissan should do. These include the following:
A. Conducting extensive market research to define customer
preferences in car design concepts and new technologies such as
(1) hybrid engines, (2) fuel cells, (3) electronic amenities
6. To meet the new challenges ahead, Nissan must now devise new
plans. In your opinion, what should be included in these new
plans? Be as specific as you can.
Nissan’s success was unprecedented in achieving the NRP goals
ahead of schedule. A major concern is of course the whole
organization relaxing after this great success. Determining how
to keep the Nissan momentum going for the next plan, the Nissan
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Customer satisfaction is still an area in which Nissan lags
behind its competitors. As presented in Table C17-1, Nissan
scored 135 problems per 100 vehicles; this is behind Toyota and
Honda and below the industrial average of 133.
TABLE C17-1. SURVEY OF NORTH AMERICAN AUTOMOBILE PROBLEMS
Car Maker Number of Problems per 100 Vehicles
Toyota 115
7. What are the valuable lessons you have learned from this case?
This case specifically demonstrates how Carlo Ghosn applied
the basic engineering management functions as he led Nissan to
great success in its Nissan Revival Plan. Personal leadership
skills play an important role in affecting the organizational
success. All concepts touched upon in this case, such as teamwork,
