Renault and Nissan Change Management

Renault and Nissan were merged on 27 March 1999; The Renault-Nissan Alliance is the first of its kind involving Japanese and a French company. Renault was identified for modern design and Nissan for the excellence of its engineering. The two companies had just decided to a most important strategic alliance in which Renault would take for granted $5.4 billion of Nissan’s Debt in return for a 36.6% equity sthare in the Japanese company. Before the alliance it was concluded that the combined company would be the world’s largest carmaker.

Many changes implemented in the company which are described in this assignment. In short they focused on vintages, increased the packages of the employees according to their performances. The leaders were explained their responsibilities and the top performers were given tricky work. The customers only want the performance of the employees and good quality of products. Now the status of Renault-Nissan alliance is that it is a 3rd largest company in the global market.

Cross functional teamwork has been central to the Nissan turnaround. Cross functional team refers to group of people with different functional specialties or skills, responsible for carrying out all phrases of a program or project from start to end. Nissan has very good cross functional team. They work in different areas and they are doing a fan ominous job in an organization. Therefore the result is much better and accurate and as a result Nissan has a very good reputation and opportunity in the global market.

Introduction

Nissan automobile company founded Yokohama city Japan since 1933. Company production and service network is around 160 countries in all of word. Company worldwide head office is Japan.

President of Nissan motor co. ltd is Mr. Carlos Ghosn. Nissan have very good and best engineer and technology team so Nissan is best of diesel engine technology. (Carlos, 2009)

Renault is an international motor company based in France. Renault was founded by Louis Renault and his brothers Marcel and Femand in 1899. Company worldwide head office is Boulogne-Billancourt France.. Renault is most popular on stylish and design based model. Renault is known worldwide our look. (Louis, Schweitze, 2007)

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Renault-Nissan Alliances

Nissan and Renault were merged Tokyo on 27 March 1999. Louis Schweitzer, CEO of Nissan Motor Co., both announce today a worldwide partnership contract that would create the fourth largest automaker in the world, while achieve money-making growth for both partners.

Renault Nissan has made a modern business model that has formed large value for both companies. Renault is investing us $ 5.4 billion in Nissan by taking a 36.8% equity share in Nissan motor company. (Carlos, 2002)

Literature review of Leadership and Change Management

Nissan – Renault alliances is following transformation leadership & change management theory, because Nissan – Renault got good effects so that they applied this theory.

Transformation leadership theory

This theory is all about leadership that make encouraging change in the followers or employers. They take care of every one interests and task in the interests of the group as an entire.

Leader’s task is consciousness-raising on a big planning. The leader’s basic and primary act is to persuade people to be aware or mindful of what they feel – to feel their right requirements so strongly, to classify their values so significantly. This leadership style, the leader enhances the inspiration, ethical and performance of his follower group. This leadership is all about principles and importance, and a purpose that transcends short-term goals and focuses on top order requirements.

Transformational leadership can be applied in this case change management situation and context is ideally suitable to the holistic and broad view perspective of a programme based approach to change management and it can be a key element of successful planning for managing change. The companies had started making the combined engine and the whole staffs were transformed. (Stephen, 2008)

Change management

Change management is a structured approach to transitioning individuals, teams, and organization from a current and a desired future state. Organizational process aimed at empowering employees to accept and embrace changes in their current business environment. In project, change management refers to a project management process where changes to a project are formally introduced and approved.

Benefits of change management

Change management takes the precious time of your organization most precarious employees. Process of change management is worth the trouble.

Change management helps to lower risks add with change, eliminate resource conflicts and repetition, and learn from successes and mistakes of the past.

Change management can offer an inside means to achieve the near-universal goals of advanced internal teamwork and external end-user satisfaction. (Geoff, 2007)

Kurt Lewin Change Management Model

Kurt Lewin model have a three step theory of change generally referred to as unfreeze, change, freeze. It is possible to obtain this stage to fairly difficult levels but I don’t consider this is essential to be capable to work with the theory.

A group has transformed since the theory was presented in 1947, but the model is very relevant. Any other change models are based on this model.

This model is dividing three stages.

Unfreezing

Unfreezing step/ period is possibly single of the more significant stage to know in the humanity of change we live in at present. This step is about reaching ready to change. It involves reaching to a point of considerate that change is essential, and needed. This starting/initial stage is about prepare others, before the transform

Deadline comes various type of reward or punishment connected to the work. If there’s no time limit, then change is lower than the required to change. There’s a lot of minor inspiration to make a transform and get on with it. Unfreezing and reaching enthused for the change is all about consider up the profit and loss’ and deciding if the ‘profit’ outnumber the losses before you take any action.

Force Field examination is a modern way of saying that there are a lot of dissimilar factors (forces) for and next to making change that we require to be conscious of (analysis). The factors of change be more important than the factors aganist change we will create change

Unfreezing’ step involve moving ourselves, or a department, or In business need to motivation for change analysis Kurt Lewin Force Field is a helpful way to understand this procedure.

Change or transition

Kurt Lewin was conscious that change is not an occasion, but quite a procedure. He calls that procedure a change. Change is the internal progress. This middle phase make the changes that are essential. This step is frequently the hardest as people are uncertain or still afraid.

transform is not an trouble-free time as people are discover concerning the changes and require to be given time to know and work with them. Support is really significant here and can be in the form of training, coaching, and expect mistake as part of transformation process

Freezing

This process is while a group of people move to it as refreezing. This step is about establishing immovability once the changes have been completed the changes are usual and become the new standard.

It’s repeatedly at this point that people express amusement and tell me that almost there is never time for this ‘this step. And it now this that’s drained criticism to this model. We should think about this last step as being more flexible. Today’s speed of transform this is a sensible criticism. Reinforcing the change and ensure that the required change is acknowledged and continue into the future.

And it also relates in Renault Nissan alliances because according to this theory there first step to make plans like:

• How to change the behaviour of the employee.
• How to increase their energy level.
• How they come out their work-stress
• How they maintain themselves.

i.e. called Unfreezing, then it take action steps for getting success in the plan i.e. called Changing, then the results come whatever changes have been done in behaviour of the employee and their energy level i.e. called Refreezing. So in this way we can say that this theory has also applied in this change management in Sony Pictures. (kottler, 2009)

Consequences of change

In 1999, Nissan was in need of Renault’s cash to reduce its debt and Renault wants North America market share which was essential for Renault to expand in its global market. Nissan had more financial lose so he want more cash because he wanted to come out of debt.

Success of this alliance’s depended on turning a Nissan got benefit more again. Nissan earn more than any other company in comparison.

Nissan have debt problem in 1999 11.2 billion $ so this reason Nissan was agreed to the alliance. Nissan needs investments by any company in its aging product line.

Nissan had $4 billion and above invested in different companies. But Nissan had a more and more financial lose

Renault paid all off Nissan’s debt. in return process Nissan give Renault 36.6% equity share in our company.

Hence nearly 15000 employees had to leave their jobs because of utilization. (Carlos, 2002)

Change agent and Resistance

Change agent

Change agent human ability or company body of things to gating a higher degree of outcome. Beginning with the end in mind, the goal of a change agent is really to make changes. Result of change agent work is to enable people to do more, or search a new and good perspective on life.

Carlos Ghosn was change agent Nissan Renault alliances; he was playing our role very wall. This processes in which he acted as.

Carlos Ghosn organized nine cross – functional team for tacking Nissan problems. Teams were the key to his success in revitalizing Nissan. Ghosn explained to employees at all levels of the company that they themselves possessed solutions to Nissan’s problems. According to Ghosn, it was neither top-down nor bottom-up. It was the way of “both top-down and He was the one who was before all the changes taking place in the organization. (Carlos, 2002)

Change resistance

There should act more transparent and groups when last change attempted for their progress. Key words here are perceived and threat. The threat require not be actual or big for resistance to happen. In its common warning it refers to change within company, while it also is found in another place in other forms. Resistance is the equal of objections in sales and divergence in common negotiations. Resistance can receive many forms, include actively or passively, open or hidden, individual or structured, aggressive.

Renault is French Automobile co. and Nissan is japans co. Both of company environment and culture is very different so employees had culture environment problems in starting of analyse. Because employees were not adapting a proper way new environmental culture they were also facing leadership change problems; they were not accepted in proper way new leadership starting of alliances. (NAKAE, 2002)

Changes during Merger

Principle and structure of Renault Nissan Alliance

March 27, 1999, the Renault-Nissan Signed Alliance is a new partnership of two global companies joint for performance and linked by cross-shareholdings. It is based on two founding principle.

All potential synergies developed by together the strengths of Renault Nissan through a approach to make Win-Win results

Every company freedom and respecting their own corporate and brand identities

Alliance develops and applies a planning of gainful growth and set itself the following objectives

Customers recognized as being among the top three automotive groups in the class and value of its products and services in every region.

Make a total operating profit among the top three automotive groups in the world, by maintaining a high operating profit margin and pursuing growth. (Carlos, 1999)

Structure of Alliance

Renault holds 44.3% equity share in Nissan, Nissan owns 15% of equity shares Renault. Both organizations have a straight attention in the results of our partner. Renault-Nissan has common strategic management structure of the Renault-Nissan group was founded on March 28, 2002. Incorporated under Dutch law, Renault-Nissan is similar own by Renault and Nissan. Registered office of Renault Nissan Alliance is situated Paris and Tokyo alliance board meets regularly. (Carlos, 2002)

http://www.nissan-global.com/EN/COMPANY/PROFILE/ALLIANCE/RENAULT03/IMAGES/idx_ill_flow01.gif

Picture.- Structure of alliance (Carlos, 2002)

Cross-cultural management

Renault-Nissan Alliance makes a great experience in multi-cultural management at all stages. Renault Nissan employs work together every year management make 30 team. Team member is both of company employers they are selected different region. Contribute our knowledge and generate new things. They are help in company’s growth. Thousands of people work together and share our idea that is very great and best cross cultural management (Carlos, 2002)

Effects After change

Alliances Combined Sales

After alliances Nissan Renault share our market Nissan is share our North American market and Renault is share our European market. Both have very great market opportunity. 1999 combined vehicles sales 4,882,235. Combined vehicles sales are improved year by year in 2007 and 2008 sales around 6,160,046 and 6,090,304. Nissan Group sales are 3,708,074 units Renault Group sales are 2,382,230 units. Renault-Nissan Alliance global market share 9.4% (Carlos, 2008)

Research and development

Both are companies sharing our technology in common platforms. They are using common parts and tools to developing technology and new entrepreneur. This alliance makes very good economic scale and reduces production cost (Carlos, 2009)

Exchanges of power trains and common power trains

To capitalize on the power train of Renault Nissan developed common diesel engines technology and gear box, including a six-speed manual gear box and a new 6 cylinder diesel engine. Both of company exchanges engines or gearboxes — for example, the Nissan 2.5 litre gasoline engine for Renault Logan and Renault 1.8-liter diesel engine for Nissan. (Carlos, 2009)

Explanation of the portfolio of advanced technology

Renault Nissan is sporting on arranging field of research and modern technology. Renault and Nissan used common technology arrangement depend on four usual pillars: Safety, Environment-CO2, Life-on-Board and Dynamic Performance. (Carlos, 2009)

MANUFACTURING

Renault plant use standard technology for production Nissan use Renault plant for production from implemented. It improves 15% of Renault’s production. They are developed common procedure plant by using the best affect for corporation. Alliance incorporated developed System (AIMS), which will originally be used at green field sites in India) and Morocco. (Carlos, 2009)

Cross production

Inside the Alliance, every company has the chance to use the manufacturing capacity of its partner. Today, Renault’s plants manufacture Nissan vehicles in Korea and Brazil, while Nissan assembles Renault vehicles in South Africa, Mexico and Spain. Nissan Renault uses our partner plant for production. (Carlos, 2009)

Conclusion

Both of company people with different functional specialties or multidisciplinary skills, responsible for carrying out all phrases of a program or project from start to finish. Nissan have very good cross functional team.

They work in different areas and they are doing a fan ominous job in an organization. Therefore the result is much better and accurate and as a result Nissan has a very good reputation and opportunity in the global market company can be transformed without destroying its identities; you should respect the dignities of the employees in the company.