Master in Management
Organizational Behavior & Leadership
Case #2: The Personality of Leaders

The Personality of Carlos Ghosn: The $10 Billion Man
Read the following dossier of article extracts and answer the final questions.
1.- “The $10 billion man”
Feb 24th 2005, The Economist

Having turned round Nissan, Carlos Ghosn is about to run Renault as well
It is said that he could add $10 billion to the market value of Ford or General
Motors with a stroke of his pen. But Carlos Ghosn is not about to sign up as chief executive of either firm. Instead, in May, he will become the boss of Renault, France 's second-largest carmaker, while continuing to head Nissan, Japan's number two car firm.
To ease the transition, this week he named Toshiyuki Shiga as Nissan's chief operating officer. Although Renault and Nissan have cross-shareholdings and a deep alliance, their relationship deliberately stops well short of outright merger. Perhaps that is why it has been so successful, avoiding the integration pain that has marred, for instance, DaimlerBenz's takeover of Chrysler. In his book, “Shift: Inside Nissan's Historic Revival”, published in English last month, Mr Ghosn says that the strength of the alliance “can be found, on the one hand, in its respect for the identities of the two companies, and on the other, in the necessity of developing synergies.”
Certainly the benefit has flowed both ways since the Franco -Japanese deal was done in 1999. First, Renault rescued Nissan, buying a stake (now 44%) and installing its
Mr Ghosn as chief operating officer (and later chief executive). Mr Ghosn turned huge losses into a $7 billion profit and wiped out debts of about $23 billion. This has helped to prop up Renault's sagging profits in recent years. Nissan's latest operating profit margin is about 11%, making it the world's most profitable volume carmaker. Mr
Ghosn's reputation soared as he set, then met, ambitious targets.
Now he is to be the first executive to try to run two big carmakers at once. No one has ever revived a carmaker as spectacularly as he has—much less attempted an encore. But then the industry has never seen anyone like the larger-than-life Mr Ghosn.
Born in Brazil to a Lebanese immigrant family, he went to a French school in Lebanon before studying engineering at the Ecole Polytechnique in Paris. Few Frenchmen speak four European languages and get by in Japanese as well. He first made his name by turning around Michelin's business in Brazil, then America, before being hired by
Renault. He was soon nicknamed “le cost killer” as he revived Renault in the mid1990s.
In 1999, when Louis Schweitzer—Renault's now soon-to-depart chief executive—decided to link up with Nissan, he knew that Mr Ghosn, already his intended successor at Renault, was the man to put in charge of rescuing the Japanese firm. Mr Ghosn's “Nissan Revival Plan” involved shedding 20,000 jobs and closing five

Master in Management
Organizational Behavior & Leadership
Case #2: The Personality of Leaders

factories, a drastic move in conservative Japan. He also abandoned the cozy keiretsu family-of-firms system, a pillar of Japanese industry. Nissan's shares in keiretsu suppliers were sold to pay off debt. He slimmed down Nissan's product range, but accelerated development of new models.
A second plan, “Nissan 180”, launched in 2002, stands for reversing the company's decline by adding 1m in sales by October this year, achieving an operating margin of 8% and eliminating its debt. With sales in North America topping 1m, Nissan is on course to hit the last remaining target, before a new plan is unveiled in April. Then it will be up to Mr Shiga to hit those targets, under his boss's watchful eye. If he lives up to expectations, Mr Shiga could be in line to succeed Mr Ghosn as chief executive at
Nissan within a few years.
Mr Ghosn attributes his success to the way that he works through crossfunctional teams. He thinks that when people from different backgrounds work together under pressure they come up with more creative solutions. He proved the value of this technique when he successfully merged Michelin's American tire business with another firm in the teeth of a recession. His personal style is brisk and direct, but not without warmth. My other car firm's a Renault
And yet why risk everything by adding to his workload? Both Renault and
Nissan have concluded that they have no choice but to share a boss for the next few years. To put a Japanese executive into Mr Ghosn's chief-executive shoes immediately might have signaled a return to the old days of consensual dithering and blind respect for seniority. To put a Frenchman in would have seemed too aggressive. Mr Ghosn's diverse international background made him more acceptable in Japan. He was not seen as an invading Frenchman. Indeed Ghosn-san has become a sort of national hero in his adopted country.
Mr Ghosn will devote the first few months in his new role to “re-discovering
Renault”, mostly in Paris. Then, he says, he will spend 40% of his time in Paris, 35% in
Tokyo, 15% in America and the other 10% in places such as China, Thailand, Brazil and Turkey. Needless to say, he has the use of a long-range executive jet. Over time, Mr
Ghosn expects the executive teams of both Renault and Nissan to become more international. America could prove his biggest challenge. First, he has to manage Nissan's headlong expansion there: the firm stumbled last year, with quality problems in vehicles made by inexperienced workers at a new factory in Canton, Mississippi. Mr Ghosn reacted by taking direct charge of the American business, which he will continue to run hands-on for another year, in addition to his many wider responsibilities. He drafted in
200 engineers from Japan to sort out the Canton factor y and improve quality. It was a reminder that not everyone can keep up with Mr Ghosn's rapid pace.

Master in Management
Organizational Behavior & Leadership
Case #2: The Personality of Leaders

Mr Ghosn's predecessor at Renault always dreamed that the alliance with Nissan would help the French brand to re-enter the huge American market, where some foreign car brands make huge profits. But Mr Ghosn seems more cautious. He thinks America poses huge risks. Renault has failed twice there before. But if he can make the transformational European-Japanese alliance a two-pronged success in America, Mr
Ghosn will truly deserve to be called the $10 billion man.
2.- “A Spin with Carlos Ghosn”
Business Week, October 4, 2004
Nissan Motor Corp. Chief Executive Officer Carlos Ghosn enjoys something akin to rock star status across the auto industry. He mastered the art of turnaround during stints running Michelin's U.S. tire operations and with Renault in Europe during the 1990s. His most remarkable feat, though, has been his salvage job at Nissan, which looked like road kill five years ago when he arrived.
In 1999, few thought Nissan would survive -- and the decision by Renault to pump in $5.4 billion in capital to gain effective management control and to try revive
Nissan, which was bleeding cash and losing market share in Japan and the U.S, looked like a chump's game. Ghosn, however, changed all that. Nissan is a profit machine, and its product lineup -- which includes the Altima sedan, Titan pickup trucks, and Infiniti luxury offerings -- has caught the imagination of consumers.
In April, Ghosn will assume the CEO title at Renault while keeping the top job at Nissan. This dual-CEO gambit is an industry first, and will test the wits of even a proven player like Ghosn. BusinessWeek Asia Regional Manager met with Ghosn to discuss his managerial philosophy, his unique international background, and his love of cars -- that is, as long as they make a truckload of yen for his company. Edited excerpts follow: Q: You have a reputation around the industry as a cost killer. But at this point in
Nissan's revival, the focus is much more on expansion and growth. How exactly would you define your managerial style and philosophy?

A: It's a little bit difficult to define it, because it's very difficult to describe yourself in a very objective way. It's a little impossible. But if there are some strong beliefs in terms of management that I have, they are these: The basic objective of management is to create value. It's very important never to forget why we're here. And the higher you are in management, the more obvious it has to be. And in order to create value, obviously you have many methods, etc.
But the heart of all this is how you get the attention of people and how you get people motivated to what you are doing. How do you get people thrilled in a certain way about what's going on in the company?

Master in Management
Organizational Behavior & Leadership
Case #2: The Personality of Leaders

There's a lot of cynicism. There's a lot of doubt. There's a lot of skepticism. There are a lot of second thoughts. But you know it's a competition. And if you do better than your competition, you're going to get better results.
Motivation is the ultimate weapon. My management style is inspired by this. That's why
I'm very demanding about performance. I'm very demanding on myself, and I'm very demanding of the people around me. But I know that to be able to be demanding, you have to empower people. You can't be demanding of someone who isn't empowered, it isn't fair. If you have to put two words around the management style, I would say value and motivation.
Q: Despite being a foreign CEO in Japan, you have managed to gain the trust of
Nissan's largely Japanese workforce. How did you bridge the cultural barrier?

A: It's interesting to see how human beings handle difference. People have always had problems about what is different from them. Different religion, different race, different colour, different sex, different age, different training -- human beings have always had a challenge confronting what is different.
Now, we come to the basic acknowledgement that you feel more secure with somebody who is like you. You feel more comfortable, you feel more secure. You feel insecure with someone who is different from you. You feel more insecure with a woman, or someone who is younger than you, or older than you, or a foreigner.
But I recognize that even if someone is different, I'm going to learn a lot. We have a tendency to reject what is different. And at the same time, we need what is different.
Because what is different is the only way we can grow by confronting ourselves.
As you know, I was born in Brazil, I spent some time in schools in Lebanon, and I went back to France for my graduation. But I have been confronted by change all my life. I changed friends, I changed schools. You start to understand that [while] it's unpleasant, it's also enriching. That's what I want to tell you. Going to another country and confronting another culture, I don't feel any anxiety about that. I feel curiosity, I feel interest. Why? Because I have already spent a lot of time in my life worrying about anxiety and I have overcome it. But I still understand people who are confronting difference for the first time. When my kids change schools, they don't like it. But at the same time, I understand that this will make them stronger.
You know, people usually ask me, "Who is the business leader that you respect or that you read about?" In fact, I don't think about so many of them. But I'm impacted from time to time by employees who make very simple remarks about some specific events.
[They] have more impact on me than books written about management, because they are so expressive. And it can be a worker on a shop floor, [or] it can be a technician doing something extraordinary.

Master in Management
Organizational Behavior & Leadership
Case #2: The Personality of Leaders

For me, in management you learn independently of ranking, independently of IQ, and independently of age. You witness different situations. Whenever you understand how much difficulty is behind the situation, then you appreciate people and what they do independently of who they are.

Q: Tell me about your interest in cars.
A: I like cars. Even if I have thrown myself into the role of a businessman who looks very coldly at a decision, I'm always reminded by my sisters, or my parents, that I used to recognize cars by their horn at the age of five. Now am I a car lover? Yes. Am I car fanatic? No, which means I will never make a wrong business decision just because I love a car.
You have to resist your feelings, particularly in some important decision you have to make. In the car industry, there's this image that there are CEOs who are car fans and
CEOs who aren't. There are CEOs who like cars and understand cars and CEOs who don't. But I don't know who's more dangerous. If you have a car fan, and he's going to substitute himself for the customer, you're in trouble.
Q: You talk a lot about Nissan's need for segment-defining cars. What image are you actually seeking for the brand?
A: We don't want to be something for everybody. We want to be everything for some people. By that definition, we're going to distinguish ourselves. Our objective isn't to be the unanimous brand that everybody recognizes and everybody likes a little bit but not too much. We want to present products that are going to be attractive. And when they're attractive to some people, they will be repulsive in some way to others.
We're trying to build character. We're trying to build authenticity, spice, something that makes our cars different. We understand that some people won't like it. That's O.K.
That's fine. A powerful brand is engaged whenever you have clear attributes recognized by the public, and clear attributes mean no complacency, a good, strong character, a strong personality.

3.- Nissan-Renault focused on cash, rules out deals
Reuters
By Nichola Groom and Kevin Krolicki
LOS ANGELES | Nov 19, 2008

Nissan Motor Co and Renault SA Chief Executive Carlos Ghosn said on Wednesday his focus was preserving cash rather than pursuing a partnership with a U.S. automaker, saying the credit crisis and plunging sales threatened to drive rivals out of business.

Master in Management
Organizational Behavior & Leadership
Case #2: The Personality of Leaders

"It is out of the question for Nissan or Renault to be involved in any deal that involves cash," Ghosn told reporters on the sidelines of the Los Angeles auto show.
Although Ghosn stopped short of ruling out future talks with one of the embattled
Detroit automakers, he said the crisis for the industry would shut down consideration of such deals across the industry until credit begins to ease.
"I think 2009 -- forget about anything happening because the year looks really bad,"
Ghosn said. "If something was to happen, it would happen now, but it's not happening."
The remarks underscored the extraordinary pressure and dwindling options facing U.S. automakers, especially Chrysler LLC, Nissan's existing partner in a product-based tieup.
Ghosn said it was possible one of the U.S. automakers could fail. Nissan's exposure to a
Chrysler bankruptcy under an existing deal to supply it with a small car in exchange for a full-size pickup truck would be minimal, he said.
"I don't know if one will go down," Ghosn told reporters. "I think the whole industry crossing 2009 has to be very cautious. The likelihood of some company going bankrupt under these conditions is very high."
U.S. auto sales have plunged to their lowest level in a quarter century amid a slump in consumer confidence and the economy and U.S.-based automakers have appeared before Congress to plead for $25 billion in aid to support their companies.
JOB ONE: PRESERVE CASH
Ghosn said his priority was to keep Nissan-Renault from burning cash during a downturn in global vehicle demand that shows no sign of a near-term reversal.
"I don't think anybody has a clue about if this slump is goin g to go through 2009, two more years, three more years. Nobody knows," Ghosn said.
During the second half of the fiscal year ended March 2009, Ghosn expected Nissan t o be running close to its break-even point because of slumping sales and a high yen.
"We're not at zero, but we're not far from it," he said. "We're not far from break -even.Our short term objective is absolutely very simple to say but more difficult to put into action -- avoid burning cash."
"We hope that they make it through a tough 2009," h e said, when asked about whether
Nissan might seek Chrysler assets in a bankruptcy. "I'm not going to tell you that I'm here waiting for something to happen and then jump on the carcass."

Master in Management
Organizational Behavior & Leadership
Case #2: The Personality of Leaders

4.- Ménage à trois? Ghosn Wants a Group Grope
By Bertel Schmitt on April 9, 2010 www.thetruthaboutcars.com Having just sealed the three-way tie-up between Renault, Nissan, and Daimler, Carlos
Ghosn already lusts for more. At a press conference in Brussels, Ghosn said the alliance is open to new partners to get in bed with. Muses The Nikkei: “He may envision a grand coalition of Japanese, European and U.S. automakers.”
Last time the industry was beset by the urge to merge about a decade a go, Renault and
Daimler both made advances to the Nipponese Nissan bride. Nissan was a damsel in distress and needed a chivalrous knight. Renault won Nissan’s heart. Dejected Daimler merged with Chrysler. And we know how that worked out.
The Nikkei goes down memory lane:
“The Daimler-Chrysler merger was touted as the deal of the century, while the Renault Nissan partnership was derided as an alliance of the weak. But the German-American combination ended in disaster, proving the difficulty of melding two huge companies with different cultures.
Meanwhile, Renault and Nissan have built up a mutually profitable partnership through such steps as sharing components and jointly developing electric vehicles. It is estimated that the companies have created well over 1 trillion yen in synergy from their partnership over the past 11 years. It is this success that has been driving Ghosn’s quest to find a new partner.”
According to Ghosn, a car maker is condemned to assured death if the company sells less than 2 million vehicles a year. The more, the merrier. Industry observers agree: The huge investments have to be spread across as much volume as possible. That’s why
Ghosn is looking for more partners to join the club.
As many of us are painfully aware, monogamous relationships are hard enough to keep alive. Additional partners bring additional conflicts and jealousy. Nissan managers already felt slighted when Ghosn spent too much time courting Dr. Z.
Says The Nikkei: “Nissan’s senior executives other than Ghosn were left out in the cold during the alliance talks. Even when news media started reporting on the deal in the making in mid-March, most senior Japanese executives at Nissan were unaware of the negotiations. They had to say they had heard nothing about the proposal.” Also, “many
Nissan employees fear that depending on another company for key engine technology could erode their company’s technological prowess.”

Master in Management
Organizational Behavior & Leadership
Case #2: The Personality of Leaders

5.- Ghosn’s Nissan ‘Unleashed’ as Japan’s Auto-Profit Leader: Cars
Bloomerang Businessweek. June 29, 2011
By Makiko Kitamura and Yuki Hagiwara

Carlos Ghosn, poised to make Nissan Motor Co. into Japan’s most profitable automaker for the first time since at least 1992, is returning to the type of bold pronouncement he was known for a decade ago.
“Nissan is unleashed,” Ghosn, 57, told reporters yesterday at company headquarters in
Yokohama. “This is the first time we are launching a plan with no handicap. We are fully on the offensive.”
The chief executive officer, anticipating higher global production, had Nissan stocking electrical components before the March 11 earthquake and tsunami. That positioned it to recover faster than Toyota Motor Corp. or Honda Motor Co. In North America,
Japan’s second-biggest carmaker lost a week of output while the other two have yet to resume full production.
Nissan now targets operating income of 460 billion yen ($5.7 billion) in the year ending
March 2012, while Toyota expects 300 billion yen and Honda estimates 200 billion yen.
That would be the first time Nissan beat its two biggest competitors, according to
Bloomberg data dating to 1992.
Ghosn this week announced a six-year mid-term plan aiming for 8 percent global market share and 8 percent operating margin. His enthusiasm recalls the days shortly after he was brought from biggest shareholder Renault SA to lead Nissan. In May 2000, just after Nissan’s biggest annual loss, Ghosn told Bloomberg News he would lead a return to profit by March 2001: “I am not optimistic. I am confident.” He met his goal.
The CEO has earned the right to brag, said Jesse Toprak, vice president of industry trends at TrueCar.com in Santa Monica, California. “A little arrogance is good if it can be substantiated, and right now Nissan has confidence in the future,” Toprak said. “The math favors them this year.”
Nissan estimates its global vehicle sales will rise 10 percent in the 12 months started
April 1, compared with a 6 percent decline forecast by Honda and 0.9 percent drop at
Toyota. Nissan’s U.S. sales in May fell 9.1 percent, compared with a 33 percent plunge at Toyota.
“Nissan has completely different momentum on sales,” said Koji Endo, an auto analyst at Advanced Research Japan in Tokyo.
Nissan had secured a greater supply of semiconductors before the quake than its
Japanese rivals, preparing to increase production in anticipation of growing global demand, according to analysts at IHS Automotive and Advanced Research Japan.

Master in Management
Organizational Behavior & Leadership
Case #2: The Personality of Leaders

“We were envisioning a very steep ramp-up in production in 2011,” Ghosn said. “We found ourselves with a larger inventory than some of our competitors.”
Honda was particularly hard-hit by the semiconductor shortage because it had ordered a new type of chip for its updated Civic, which went on sale in the U.S. in late April.
“There was a timing issue with our order,” Honda Chief Financial Officer Fumihiko Ike said yesterday.
Investors have noticed. Nissan has gained 1.1 percent in Tokyo trading since March 10, the day before the quake, compared with a 12 percent drop for Toyota and an 11 percent decline for Honda as of yesterday’s close. Japan’s benchmark Nikkei 225 Stock
Average has lost 7.5 percent in the same period.

Questions for Discussion
1. Describe Carlos Ghosn using the “Big Five” dimensions of personality.
2. How does Ghosn’s personality affect his performance as a manager?
3. Does Ghosn possess important traits to be a successful multinational manager?
4. Does Ghosn have a Type A or Type B personality? Which implications may the type of personality have on work performance and wellbeing?
5. How is Ghosn’s core self-evaluation and risk taking level? Do you think those personality treats played a role in Ghosn’s success?
6. Considering your own personality, would you get along with Carlos Ghosn as a manager and as a co-worker?