A Great Leader Carlos Ghosn challenges in the modern business environment

The challenges determined by the modern business environment require the companies to be more adaption to the business change imposes. Different individual’s characteristic gives the company its importance by developing flexible strategies in order to achieve the established results. These conditions provide the companies’ with their needs of leaders, not just managers.

Although leaders are different from each other, they share common characteristics; Integrity, honesty, courage, commitment, passion, confidence, wisdom, responsibility, and others. One of the most remarkable leaders is Carlos Ghosn, who has been known by motivating the employees to follow his steps in fulfilling the company and their goals. Mr. Ghosn inspires the employees to improve their performance and to help them create greater value. He is an unordinary person, Mr. Ghosn towards people not only by actions but by his skills style. He impact by others -who work with him- which leads to turn him to be an effective leader. Transparency, the relationship between execution and strategy, and the communication are the principle of his leading style. Although entrepreneurial skills are important for leaders and their companies, they do not suffice in order for the leader to be a successful one. The following pages focus on analyzing the leadership style of Carlos Ghosn, the current Chief Executive Officer and president of Renault Company in France and Nissan Motor Company in Japan and a member of Executive Committee.

Carlos Ghosn Leadership Style Analysis

Various important to leaders -as Ghosn- known worldwide; are characterized by different leaderships style. The most frequently observed leadership styles are represented by autocratic or authoritarian, participative or democratic, laissez-faire, narcissistic, and toxic leadership. The autocratic leadership style assumes that the leader makes all decisions (Leadership Expert, 2010). In other words, the decision making process is a centralized by one person. Leaders with this style do not have close relationships with their subordinates. In Mr. Ghosn case, he has the opposite approach; he encourages his initiative, and he is interested in discussing their assistant’s ideas (Hellriegel, Slocum, & Jackson, 2008). Moreover, there are several advantages associated with his leadership style, as it provides great motivation for Ghosn to maximize the using of mental human resources for his subordinates that he has in the both companies. These advantages rely on the fact that Ghosn in this case is able to make effective decisions by discuss many ideas with other stakeholders. The participative leadership style here is quite the opposite of the autocratic style. Consultation and participation of the group is very important for democratic leaders such as Mr. Ghosn focus on cooperation of his subordinates.

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Leadership characteristics of Carlos Ghosn

The CEO of Nissan and Renault is one of the most interesting leaders in the private sector. Carlos Ghosn has made the proof of important characteristics as a leader. One of the most important characteristics of Carlos Ghosn is represented by the ability to embrace cultural differences. His personal background encourages and supports such an approach. He accepts cultural differences and even includes them in the organizational culture.

His leadership style is based on the following principles:

Transparency.

Relationship between execution and strategy.

Communication.

Transparency

Transparency is the most important object between the employees and their leaders in any successful company. Carlos Ghosn considers transparency of being extremely important within the organization (cesium, 2010). By transparency, Ghosn understands that the leader must focus on continuity in the things he says or does. This is in order to encourage his subordinates to do the same. Through transparency, every employee under Ghosn management is working to review their performance by being critical to their achievement which makes them more able to solve their own problems directly in a simple way. As a result, the activity within the company and the relationship between departments can be improved.

Relationship between execution and strategy

In Ghosn’s opinion, execution should be more focusing in achieving tasks and spending less time in building strategies (Jean, 2007). In other words, although numerous specialists in the field consider that the most important thing regarding to the company’s activity is represented by its strategy. It seems that the implementation of the strategy is the most important aspect that must be taken into consideration. Although it is extremely important to develop a suitable strategy for each company that can be adapted to its departments and activities – if the strategy in case is not properly applied-, it is likely to experience several dysfunctions within the activity of the company. An important aspect that must be taken into consideration regarding the company’s strategy is represented by the human resources involved in its implementation. If the personnel involved in this activity does not understand the strategy or does not have the skills and abilities that required, it is possible to lead to certain setbacks.

This means that Ghosn is oriented towards the involvement of the staff in making strategic decisions. This is because the strategy of the company affects the staff and its activity. Therefore, the leader must take into considerations the ideas of its team and their requirements. In addition, Ghosn is interested in the development of his subordinates by addressing aspects like their career development. As a result, Ghosn expects his employees to increase their interest towards the company and to improve their performance as a reward.

Communication

One of the most important aspects that influence the success of the companies is represented by communication. Frequent errors that interfere with the communication within the company have the ability of evolving into conflicts or situations of crisis on team level, department level or organizational level. This is the reason for which Ghosn is one of the most leaders who takes a great interest in addressing communication issues within the companies he manages (Cornelissen, 2004). His orientation towards communication aspects reveals the fact that his leadership style is a participative and democratic one. Given the fact that he must engage in numerous management activities, Ghosn relies a great deal on his team, which also supports the assumption that he portrays a participative leadership style. Although this type of leadership can lead to problems caused by allowing subordinates too much freedom of action and decision making, it can determine properly important results for companies in international level approached. However, Ghosn’s leadership style must be analyzed from several dimensions. This is because Ghosn combines several leadership styles. He considers that different situations require different approaches and different leadership styles. In his opinion, the leader must reveal several dimensions that should be easily applied by understanding the causes and impacts of each situation. The leadership styles associated with Mr. Ghosn that makes him a great leader in my view are:

Charismatic or transformational

Democratic

laissez-faire

Situational

People oriented

Charismatic and transformational leadership

Charismatic and transformational leadership style cannot be learned by the leader (Avolio & Gibbons, 1988). This means that Ghosn was born with the ability to embrace the characteristics of this leadership style. This ensures that he is close to his subordinates and they feel that they can easily approach him. With this kind atmosphere, Ghosn encourages a relaxed environment within the company that favors communication. In other words, this leadership style inspires employees to follow Ghosn’s example, and does not coerce them like in the case of the autocratic leadership style.

Ghosn’s democratic leadership style

As mentioned above, Ghosn’s leadership style relies on his democratic influence. In other words, Ghosn establishes the objectives that must be reached. He allows his team to decide the measures that must be taken in order to achieve these objectives (McDonough, 2010). In addition to this, he is interested in discussing ideas and taking suggestions from his employees. Most leaders worldwide do not usually have the time to investigate in the way their subordinates feel about certain situations. However, Ghosn follows a different approach. His time management skills allow him to make the time for mingling within the company and listening to the teams affected by certain situations in order to be able to build a correct and informed opinion (CNBC Magazine, 2007). This kind of characteristic from his leadership style is represented by the fact that he encourages the innovation within his subordinates and encourages them to take initiative by involving them in the decision making process. According to a famous says by Mr. Ghosn “We will encourage our employees to make their decisions based on an existing experience”. With this democratic environment approaches, Ghosn allows the employees to take better decisions by frequently practicing this activity, and to make decisions more rapidly, which increases their productivity and efficiency.

Ghosn’s laissez-faire leadership style

The leader in this case does not believe in close control of his team (ELS, 2010). Even if he is in charge of large companies that depend on important decisions, Ghosn prefers to allow his subordinates to establish their own schedules. This is also because of the fact that Ghosn busy schedule does not allow him to maintain an increased control level within his companies. However, Ghosn slightly monitors his collaborators in order to ensure that they do not make incorrect decisions that could affect the company.

Situational leadership style of Carlos Ghosn

The situational type of leadership assumes that the leader must be able to adapt the strategy in order to be suitable with the circumstances it refers to (Schermerhorn, 2001). This ability is very important for the business sector addressed by the companies managed by Ghosn. The frequent changes produced in the business environment require that these companies develop and implement flexible strategies that are able to easily adapt to these changes.

Therefore, it is important that Ghosn maintain his capability to continuously monitor the business environment and analyze his trends. Consequently, he becomes more able to anticipate the modifications that can take place in it and that require his quick strategic response. The cultural diversity that characterizes Ghosn is one of the factors that ensure his open mindedness towards situational leadership and its requirements (ICMR, 2003). Although Carlos Ghosn’s leadership abilities cannot be contested, there are certain aspects that must be taken into consideration when analyzing his leadership style. He is considered a successful leader, given the results reported by Nissan and Renault and the recognition achieved from his peers. However, the democratic and laissez-faire style imposed by Ghosn can lead to negative effects on medium term and on long term. This is because this relaxed attitude he encourages within his companies might determine some of the workers to not take their jobs as seriously as they should. Their motivational levels might be reduced as a result. Therefore, Ghosn should try to impose a firmer leadership style.

Ghosn has managed to run large companies on global level without imposing force and constraints. He focuses on embracing cultural diversity and involving it in his democratic style.

However, this type of leadership is not suitable for all types of companies. In certain cases, it is important to take decisions on centralized level, which is quite the opposite of Ghosn’s leadership style. Ghosn organized his companies’ departments as individual unit centers that make their own strategies and decisions. Ghosn should be considered about making certain modifications to his leadership style. It is concerned with the fact that employees in the companies managed by Ghosn might take advantage of his relaxed style and might reduce their work levels. This can be further translated in reduced productivity and efficiency for these companies. In addition to this, their behavior might affect customer satisfaction. Therefore, it is recommended that Ghosn increases the control level within his companies. In certain cases it is important to maintain strict control on the activities of the company.

In conclusion, Carlos Ghosn is one of the most successful leaders not just in my opinion but also worldwide. As a remarkable leader he combines between different styles of strategies, his way in motivating the employees and encouraging them to follow his path has an enormous impact for them and for the company. Although his strategies may not be suitable to all the companies, still it can be applied along with the leader control to achieve the goals of the company. His interesting approach to leadership and the results he obtained through his companies have determined specialists in the field to analyze his behavior. He believed that a great leader must make sure that the employees know how much they have achieved to the goals.