The Effectiveness of the Company's Nissan - Case Study Example

Company Performance: Nissan Co Ltd Student Name Tutor Course Date Company Performance Case study: Nissan Co Ltd Introduction Company performance is the measure of a company’s outcome against the desired outcome defined by the goals and objectives of the company. This implies that executives of various companies employ diverse metrics to conduct analysis of how their companies are performing by evaluating the results of the output in regard to the set goals and targets. This paper examines the performance of Nissan Motor Company Limited in comparison to the general performance and the manner in which they value their employees. Performance of Nissan Co Ltd History of Nissan’s Performance Nissan Motor Company is an international automotive firm which was pioneered in Yokohama city in, Kanagawa Japan in 1933. According to Nissan Motor Corporation report (2013), the company is currently manufacturing vehicle in twenty countries globally including Japan and the United States. The exemplary performance of Nissan Company is arguably attributed to the nature of organizational leadership the company has been exposed to the recent past. Gill (2012) observes that Nissan was number two in global and Japanese automobile industries in 1999 but had failed to record profit in eight years, had a long time reduction in market share and was almost becoming insolvent. In fact, the financial position of the company had seriously deteriorated to an extent that it was reeling in serious debts. However, the company underwent a transitional phase in 1999 which reorganized its performance structure and revived its existence. According to Gill (2012) the takeover of the position of chief operation officer by Carlos Ghosn in 1999 marked the turnaround of events and placed the firm in a good performance track. Ghosn identified that the performance of Nissan was not only challenged by the financial crisis it was undergoing but also by cultural influences. In this instance, the organizational culture which constitutes organization’s values, norms, visions, beliefs, systems, assumptions, habits and language of members of an organization was greatly being influenced collectivist Japanese culture. Collectivism cultural values of the Japanese eroded accountability among organizational executives and generated lack of urgency. Gill (2012) elaborates that these factors had negative impacts on the performance of Japanese automotive firms. Collectivism cultural value of the Japanese resulted in unlimited support for companies and sectors that are non competitive thus leading to poor market performance. This was due to the popularly held beliefs rooted in the Japanese national culture such as, ‘no one should be abandoned and there should be winners or losers’. This led to mutual interdependence and reliance on other communities thereby causing more synergic outcomes, more corporations and the need to be cared for. Moreover, the tradition of the Japanese government of bailing out the leaders of big companies who are facing financial challenges caused depletion of accountability, loss of profit focus and lack of sense of urgency (Gill 2012). Ghosn overhauled the performance of the company by altering the culture of the organization through human resource management (HRM) practices. Schein (2004) observes that HRM practices such as selection processes, dismissal and rewards reinforce the culture of organizations. Subsequently organizational culture directly impacts on the organizational performance. In this case, Ghosn introduced performance based incentives systems that replaced the traditional pay and promotion systems that were based on work attendance, tenure and age. Gill (2012) notes that cash incentives were allocated to employees for performance associated with profits and revenue achievements. In addition, managers were given cash incentives at the beginning of each year with a clear and transparent criteria. These initiatives enhanced fairness among the employee and reinstated the spirit of accountability which in turn elevated the level of organizational performance. Current status of performance of Nissan Company Nissan Motor Company has built a strong brand image in the international scene over the past decade. For instance, the launch of six year growth plan, termed as Nissan power 88, in 2011 has greatly fired the company towards concrete progress. In Nissan annual report (2012), the CEO Carlson Ghosn reports that in 2011 Nissan Company defied calamities and natural disasters such as earthquakes and tsunami and excelled tremendously in terms of sales and growth. According to the CEO, the company indicated the ability to sail through crisis by focusing on efforts aimed at protecting the company and ensuring its sustainability. According to the Nissan annual report (2012), Ghosn argues that the Nissan power 88 initiative symbolizes the brand goals and efforts to increase sales volume as well as enhancing improved customer experience. In this case, he explains that the 88 numerals represent eight percent global market share target and a sustainable eight percent profit margin. As a matter of fact, the Nissan Power initiative has geared the company towards realization significant financial gains. The CEO reports that the company achieved net income that was in line with its set objectives in 2012 and steered delivery of automotive free cash flow which strengthened its balance sheet. According to the Nissan annual report (2013), the company made remarkable performance which enhanced a positive recognition of its products and a constructive boost to the brand image. For instance, Nissan Note was crowned the car of the year in the Japanese Market, Nissan Sylphy was named the car of the year in China and Venucia R50 pocketed the most economical car award in the same year. Additionally, the Nissan annual report (2013) states that Nissan brand was recognized globally and they ranked among the top 100 international brand. Nissan Motor Corporation has significantly increased its sales volume and expanded its international market share definitely. The company CEO report that they set new sales records of 173000 units in 2012. This trounced previous year’s sale by twelve percent increment. According to the Nissan annual report (2013), company increased its market shares and initiated sales in Chile, South Africa, Australia and the Dominican Republic. In addition, the company has further improved the brand awareness by expanding their partnership with the Red Bull Racing to become the official title sponsors and technical collaborator of Formula One 2013 season. Nissan Motor Company has established counteractive initiatives to strengthen its performance in the subsequent years. Similarly, they are prepared and ready to utilize the opportunities that lie ahead of them. For instance, the company addresses fierce global competition by being flexible to market changes and sharpening its competitive strengths through production of steady results. Nissan annual report (2013), reports that the company constantly invests in the in its brand, people, technology and products to enhance sustainability growth over a long period of time. Evaluation of employees Nissan has strong and well established employee appraisal and evaluation measures. According to Nissan sustainability report (2011), the company acknowledges that the employees create a huge value through sharing of knowledge with regard to their individual experiences and diverse ways of thinking while responding to the various challenges the organization is experiencing. In order to ensure consistency in achieving improved business value while bearing the desire to improve customer experience, the company has devised five key pillars which serve as code of conduct for evaluating the entire employee base globally. The five mindsets and action plans include respect for diversity, cross functional or cross cultural, transparency ability to learn, competitive and frugal. Nissan Company fosters work place diversity in one of the most significant ways. The pursuit for work place diversity compelled the organization to put up a Diversity Development Office (DDO) in 2004 in Japan. The office has been coordinating the with various offices in North America, Europe and other global markets to achieve sustainability in corporate growth while respecting work place diversity. In addition, a Diversity Steering Committee managed executives from each department was established to spearhead strategies for embracing workplace diversity. This implies that Nissan demands all its organizational members to respect to respect the right of every individual and shun negative social norms such as discrimination or harassments based on race, religion gender, age, nationality, originality and physical capabilities. The employees are also expected to be transparent. According to Nissan sustainability report (2011), explains that the employees ought to eliminate vagueness and be simple and clear. The motive behind this mindset is to assess accountability. In this instance, employees who possess the capacity to express themselves in simple terms and clearly are considered more accountable than those who express themselves vaguely. Employees are expected to be passionate about learning and learn from every chance. This is to evaluate if the employees are indeed focused to perform their duties. In this case, employees who are passionate about learning and utilize every opportunity to learn are fully focused to deliver the desired outcomes. Furthermore, the employees are expected to be competitive. In this case, employees are assessed if they can display the ability to generate competitive and consistent progress within the company. Ultimately, the company expects the employees to achieve maximum outcome with limited resources. Comparison of the performance with general performance Various companies employ diverse tools to evaluate to evaluate organizational performance. The performance of a company can be measured in the context of financial performance, market performance, product quality analysis, customer satisfaction, market performance and operational variables which determine the sales volumes and profitability. The performance of the Nissan Company compares averagely well in relation to the general performance. The financial performance of the company has for instance demonstrated exemplary performance in comparison to the general performance. The Nissan annual report (2013) indicates that the launch of Nissan power 88 has geared the organization towards achievement of improved cash flow return on investments (CFROI). The company has demonstrated its determination to improve its market performance globally. Nissan annual report (2013) shows that the company has devised initiatives which enhanced increased the sales volumes compared to the previous financial periods. The company has also expanded its market boundaries with regard to Nissan power 88 initiatives. How other companies mimic Nissan’s performance improve their performance The performance of Nissan Company is entirely based on the good leadership. Foremost, the revival of the company from poor performance in 1999 serves as good lesson for organizational leadership. Ghosn believed that the change must be derived from within the organization. He therefore began transforming the performance of the company through offering financial incentives and rewards to the employees. Gill (2012) observes that Ghosn is virtuous leader and a team integrator. Ghosn used cross-company teams and cross- functional teams as intervention measures to initiate change and reinforce bottom-line performance. Through Nissan’s experience other companies can understand the impact of organizational culture on the performance of a company. The norms, beliefs and behaviors of organizational members significantly influence the output of the organization. For instance, organizations whose members nurture culture which enhance accountability are likely to perform better than organization with eroded sense of accountability. Conclusion In conclusion, it is worth noting that organizational performance is based on various elements within an organization. This paper has demonstrated that company performance is influenced by organizational culture and the nature of leadership an organization is exposed to. The paper has also shown how Nissan Company maintains their performance through employee evaluation initiatives. Ultimately, the paper has indicated that the company is performing averagely well in comparison to the general performance platforms. Reference Gill, C. (2012). The role of Leadership in International Mergers and Acquisitions: Why Renault Nissan Succeeded and Daimler-Chrysler Mitsubishi Failed, Human Resource Management, Vol. 51, 3, Pp. 433–456. Nissan Annual Report (2012). Nissan Motor Company, Retrieved on 12th November, 2014, from Nissan Annual Report (2013). Nissan Motor Company, Retrieved on 12th November, 2014, from Nissan Sustainability Report (2011). Employees- Fostering individuality. Retrieved on 12th November, 2014, from Schein, E. (2004). Organizational culture and leadership (3rd Ed.). San Francisco, CA: Jossey- Bass. Read More