Case Study of The Renault-Nissan Alliance

Discuss about The Case Study of The Renault-Nissan Alliance .

Case Study: The Renault-Nissan Alliance - a cultural enigma

What did Nisan along with other Japanese companies, get into difficulties during the 1990s?

Nissan has built up huge debts of 2000 billion and $15 billion in the form of loan capital accumulated for financing its expansions on the domestic and the international front during the 1990s. This is basically a legacy on its dependence on the gathering of the huge amount needed for the loan. Nissan, being a highly productive automobile company wanted to expand internationally and compete with markets at an international level. And this needed huge investments. Not only Nissan, the same situation was being faced by numerous other Japanese companies as well.  Due to this huge debt these companies faced enormous difficulties (Ghosh, 2002.)

In what ways have both Nissan and Renault benefitted from alliance synergies since 1999?

In the year 1999, when an alliance was formed both Nissan and Renault got their benefits.  Nissan who was under huge debts was rescued practically.  This alliance enabled the Japanese company to return to its state of profitability. Renault, on the other hand got an opportunity to venture into the markets of Nissan. They got the opportunity to have a sneak peak and share design skills, technology of Nissan (Anonymous, 2015). It also helped them to save up on costs as common suppliers were being used due to the newly formed alliance. Hence, this alliance gave both companies equal benefits.

Why do you think Renault and Nissan have decided to keep the two companies separate, despite their joint overall management?

Both Nissan and Renault were significant car companies working on the global level. Both the chief executives of these individual companies had enormous talent in bringing both these companies to a global standard and in spite of their alliance they did not want to let go of any one talent. Hence they kept their individuality and continued running the companies individually in spite of the alliance being made. Carlos Ghosn, who was the chairman of Nissan was the mind behind making Nissan remarkably successful while, Louis Schweitzer, the chief executive of Renault was the one who made Renault highly successful (Molnár, 2009)

Explain the differences and similarities between Japanese and French cultures in relation to the main dimensions of culture.

The primary similarity in between the cultures of Japanese and French is that they both developed from ashes (Clerc, 1999). Due to the war they both display similarities like being burnt down to ashes and then rising up again gradually and gaining the respect of the world.

To what extent are Japanese companies in general likely to follow Nissan’s example in leaving some of the country’s conventional business practices behind?

Culture wise French culture believes in Judeo-Christianity. Pegan practices of the ancient times were robustly in favor of Rumanianism. Christianity highly influences the social culture of the county. Japanese on the other hand are considered to be taken birth with Shinotism and probably dies off as a Buddhist. Culture is of universal nature for the French while for the Japanese it is often considered to be isolated conservative in nature. Japan has reevaluated its conventional ideologies especially after experimenting years of economic stagnation and decreasing company profitability.  There was a realization that with worse situations these companies need to take drastic measures leaving behind their traditional rules and beliefs. Japanese companies were able to successfully increase the condition of their companies based on the success of French company. In general as per the Japanese corporate culture planting companies from outside or redundancy of workers were alien concepts. But since times are difficult, the Japanese companies are adopting to these measures by following their French competitors. In fact it is a beginning of a new thought process at least.

Why do you think Carlos Ghosn decided to adopt elements of an Anglo-Saxon approach to the transformation of Nissan.

Carlos Ghosn adopted elements from the Angle-Saxon approach for transforming Nissan because he wanted to build upon the success of the French Company transforming the quintessential Japanese company. The case of Nissan Renault alliance is a case of cultural amalgamation. Personally, Carlos is born in Brazil with Lebanese parents but got his education done in France. He could visualize the power of the amalgamation of the mix of both the cultures both affecting each other positively for a better outcome (Eonemo, 2007). The reason why Carlos adopted this approach was to broaden the scope of the companies substantially. It also aided to make additional partnerships.

Does the experience of turning around Nissan’s fortunes suggest that all companies should adopt an Anglo-Saxon approach if they want to be successful in the modern international business environment?

Yes, as per this case study it is safe to say that the Anglo-Saxon approach can work wonders for every brand who wants to be successful in this modern international business environment. Such an approach goes beyond the cultural barriers and beliefs. They think out of the box and takes actions which are simply for the betterment of the company and nothing else. Conventional business practices or ideas do not work anymore in this world. There is no need for a merger or an acquisition rather companies of different genre can be together as well as work individually to maintain their individualistic preferences and views.

In the light of the Renault-Nissan alliance, to what extent is it still possible to speak of an East Asian or European socioeconomic model?

Strikingly, the entire last decade showcased numerous corporate alliances highly successful. The European socio economic model in the light of the Renault Nissan alliance can be defined on the basis of regulations, responsibilities and redistribution ship. All these together denote that there is a broad sense to this European social model.  Such a model influenced both the companies in its production, productivity, growth, employment and competition. Furthermore a heavy influence is seen also in its social relationships, cultural connections and in behavioral learning.

Case Study 2: Corus and the Tata Group

1. What benefits might have been expected to come from the merger of British Steel and its Dutch counterpart, Koninklijke Hoogovens in 1999?

With the merger of the British Steel and its Dutch counterpart, Koninklijke Hoogovens in the year 1999, it led to the formation of a new steel company named Corus. To some major difficult trade conditions the company responded fairly and efficiently. It made numerous cuts in its operational costs. During 2001, February the company made the most controversial announcement of cutting 6000 employments (Quigley, 2009). A justification was given by Corus that such job cuts were made for reducing operational costs and increase efficiency and brings back the company to its state of profitability.

2. How would you justify the plant closures and job losses that followed the merger between 1999 and 2001 from the perspective of the shareholder model?

Although Corus, when announced the 2001 job cuts justified it in fair words, there still remains a response from the stakeholders (Pandathil, 2016). When this announcement or step was taken, stakeholders, trade union, the Iron and Steel Traders Confederation and politicians pooled their protests against such a decision made.

3. How might these plant closures and job losses be reviewed from a stakeholder’s perspective?

The event of plant closures and job losses made by Corus was the only choice they had to cut down on costs. From the perspective of stakeholders, living in this community with redundant workers in which the company performed at a small scale was a pyrrhic victory. Especially when the steel making capacity of the company is much lower than what is the need for steel manufacture (Ijmuiden, 2016).

4. To what extent is it possible to reconcile the shareholder and stakeholder perspectives in this case?

In few years by cutting down on costs and the enhanced demand for steel the company got back its status of profitability.

5. What responsibility, if any, might the British government have been expected to take either for preventing the plant closures or for providing support for the redundant steelworkers?

The British government gave financial support to Corus.  The government also has some residual responsibilities for the company and promises to appoint individual advisors in this regard. With the help of the Welsh Government the British government also wants to secure buyers for the largest steelmaker of the country (Thomas, 2016). There were assurances given by the government that all kinds of official, ministerial and diplomatic influences will be given for securing the future of the steel company.

If Tata’s takeover of Corus in 2007 is considered as an effect of globalization, is the fact that the predator is Indian rather than, say US or Japanese, likely to make globalization more ethically acceptable to some of its critics?

Indian company Tata’s takeover of Corus in the year 2007 is a message of making globalization look ethical similar to fellow countries like Us or Japan. Although it might looks as if India is a predator in this scenario the fact is this acquisition helped Corus to get back its profitability. It is India’s biggest ever foreign acquisition made which helped it to be established as a new force in this fast consolidating steel industry. Four years back the shares of Corus were trending at 19p only. With hands changed, the company became worth 445p per share when Tata recently agreed on the deal of Corus.

The city of Jamshedpur illustrates the concern of Tata’s founder for the welfare of his employees. Given that present day living conditions for most of Corus’s European employees are likely to be considerably better than those facing Indian workers at the beginning of the twentieth century, what might be regarded as an equivalent form of corporate social responsibility today?

Tata has years back started its effort to uplift the socio economic condition of people residing in Jamshedpur. Since ages the company is working towards improving the living conditions of the people here. Hence, in the area of social commitment Tata has its name strengthened and trusted. If compared with the present day living conditions of European workers from Corus they can be said to be at par.  European employees are also given better life and working environment, workers are made satisfied and happy and measure are taken to relieve them from work fatigue to a better life.

How far should a company like Tata be expected to go to fulfill its corporate social responsibility in the modern world?

It is the responsibility of companies like the Tata group to run work and business for building up growth, stability and expansion for earning profits. When a corporation achieves economical and social goals their organizational efficiency boosts up too. In the modern corporate world there are social responsibilities that a corporate entity like Tata must perform (Srivastava

,2012). These can be summarized as follows:-

Timely payment

Safe and hygienic work environment

A fair and impartial behavior

Health care options for workers

Recreational options

Encourage efficient workers to participate in managerial roles.

References:

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Eonemo, (2007), Renault-Nissan Alliance case Study, Retrieved from: http://www.slideshare.net/eonemo/renaultnissan-alliance-case-study

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Ijmuiden, (2016). The Financial Express, Retrieved from: http://www.financialexpress.com/industry/companies/we-wont-let-them-wreck-our-plant-tatas-dutch-steelworkers-say/270236/

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Gareth., T. (2016), The Future of the Steel Industry, Retrieved from: https://assemblyinbrief.wordpress.com/2016/05/19/the-future-of-the-steel-industry/