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MGT 8026

PROJECT HUMAN RESOURCES AND COMUNICATIONS MANAGMENT

Assignment 1 Semester 1 200?

Prepared for: Barrie Todhunter

Prepared by: (STUDENT NAME) Student number: (STUDENT NUMBER) Date submitted: April 200?

Report on the organisational structure and personnel in the turnaround of Nissan

Comment [FoB2]: Include a cover sheet as well as the electronic cover sheet.

Comment [BT3]: Provide course details.

Comment [FoB4]: Provide details of the project

Comment [BT5]: Student details.

Comment [BT6]: Cover sheet with full details of student and assignment.

Report on the Organisational Structure and Personnel in the Turnaround of Nissan

Student name/Student number Assignment 1 - i - MGT 8026 – Project Human Resources and Communications Management Date produced: 13 Apr 2004

Executive Summary This report has been produced to review and analyse the application of project management

methods and techniques utilised in the restructure of Nissan Motor Company Ltd. On the

brink of collapse, Nissan merged with Renault to form a global alliance initiating an

unprecedented restructure that would challenge all employees in an effort to save and then

revive the company. Driving the change was Carlos Ghosn appointed by Renault as COO and

responsible for the restructure.

A review of the organisation illustrates the scope and duration that the restructure would

entail, followed by an analysis of the organisational structure and resultant changes as part of

the reforms. The analysis details a complete structural and strategic shift exploiting project

management techniques, following creation of the alliance. The report delves into the staffing

and team concepts employed in planning and implementing the restructure, discovering the

simple though comprehensive methods established for selection of personnel, team formation,

communication and reporting were efficient and highly effective. Additionally, the report

analyses the leadership aspects of Carlos Ghosn, followed by a look at organisational conflict

and the resolution methods engaged.

The organisational structure was altered to a balanced functional matrix through the use of

cross-functional teams (CFT). These teams formed and developed into dynamic units swiftly

as the deadlines were tight, were required to develop the recommendations for reform, then

assisting in the implementation of the restructure. Imbued with the responsibility, legitimacy

and authority for their task, the teams utilised problem solving and superordinate goals to

achieve the desired results. Leading the teams was Ghosn who, endowed with the

characteristics and traits of an exceptional leader, motivated, produced and communicated the

vision that encouraged the Nissan employees and teams to exert extraordinary efforts in

turning around the company one year ahead of schedule, achieving or exceeding every goal

set as part of the revival plan.

Recommendations for improvement of this restructure are difficult due to the exceptional

success although allowing more time for planning and organisational preparation for the team

environment may have led to even greater cooperation and results.

Comment [BT7]: This section of the report starts at page number ‘i’. There is no theory in an ES.

Comment [BT8]: Brief project background and purpose of report.

Comment [BT9]: Structure and brief contents of report.

Comment [BT10]: Conclusions flowing from the analysis of the project. These relate to the project.

Comment [BT11]: Provide a comprehensive list of recommendations to address the outcomes set out in the Conclusions section. This list of recommendations is too short.


Student name/Student number Assignment 1 - ii - MGT 8026 – Project Human Resources and Communications Management Date produced: 13 Apr 2004

Table of Contents Executive Summary i 1 INTRODUCTION 4

2 BACKGROUND 5 2.1 Introduction 5

2.2 Scope and objectives 5 2.3 Stages and duration 6

3 ORGANISATIONAL STRUCTURE 8

3.1 Functional hierarchy 8 3.2 Balanced matrix and cross-functional teams 8 3.3 Cross-functional teams 8 3.4 Nissan’s structure 9

4 ROLES, RESPONSIBILITIES AND RELATIONSHIPS 11

4.1 (REMOVED) 14

5 TEAM SELECTION AND DEVELOPMENT 15 5.1 (REMOVED)

6 LEADERSHIP 18

6.1 (REMOVED) 7 CONFLICT 20

7.1 Conflict at Nissan 20 8 CONCLUSION 22 9 RECOMMENDATIONS 23

References 24

Bibliography 24

List of Appendices Appendix 1 Cross-functional Teams ? List of Figures Figure 3.4-1 Balanced matrix organisational structure at Nissan 10 (FIGURES REMOVED FROM LIST) Figure 5.3-1 Five-stage lifecycle of teams 17 List of Tables Table 2.2-1 Scope of the restructure 6 (TABLES REMOVED FROM LIST) Table 6.1-1 Leadership traits displayed by Ghosn 18 Table 7.1-2 Conflict resolution methods employed at Nissan 20

Comment [BT12]: Full table of contents with section numbers and page numbers.

Comment [BT13]: Shows sections, section number, and sub-sections.

Comment [BT14]: No section number for references.

Comment [BT15]: Full list of appendices with title and page number.

Comment [BT16]: Full list of figures with titles and page numbers.

Comment [BT17]: Full list of tables with titles and page numbers.


1. Student name/Student number Assignment 1 - Page 4 - MGT 8026 – Project Human Resources and Communications Management Date produced: 13 Apr 2004

1 INTRODUCTION This report has been produced to review and analyse the application of project management

methods and techniques utilised in the restructure of Nissan Motor Company Ltd. The

restructure being a unique and novel undertaking with qualitative and quantitative goals

(Turner 1999) can be described in terms of a project. In parallel with this description, was the

adoption of project management tools by Carlos Ghosn, COO, to move the organisation from

near collapse to record performance within two years. Turning Nissan around would require a

radical departure from traditional Japanese business practices, however, Ghosn’s leadership

enabled him to implement the necessary reforms to develop and enact the Nissan Revival Plan

(NRP).

The report will provide a background to the restructure including: the initiating circumstances,

the scope, duration, stages and objectives, setting the stage in which Ghosn was able to

change the organisational structure at Nissan from a pure hierarchical functional form into a

dynamic balanced matrix organisation (Turner 1999) employing cross-functional teams.

Analysis of the change will incorporate discussion on the following team factors: selection,

responsibility, reporting, development, formation, structure, conflict, and leadership within

the organisation. The discussion reviews accepted project management practices and

competencies from a variety of sources and the impact of these during the restructure. In

concert with the discussion diagrams, tables and figures will be used to display and clarify

information.

Following from the discussion and analysis will be the conclusion and recommendations

based on the material presented in the report.

As this report has been prepared from researched materials only, some elements of the

restructure are thinly covered, particularly team selection and conflict. Analysis of these areas

will subsequently be based on the limited specific information and assumptions based on

general characteristics of the organisation.

Comment [BT18]: New page for body of report. Sections are numbered.

Comment [BT19]: This section of the report should start at Page number 1.

Comment [BT20]: Purpose of report. Remember that the ES is a standalone document and does not act as an Introduction. You must supply all of the information for the reader to understand the report in the introduction or the body of the report.

Comment [BT21]: This paragraph provides a brief background of project.

Comment [BT22]: These paragraphs explain the structure of report.



2 BACKGROUND 2.1 Introduction

Falling market share, revenue and profit with increasing costs, excess capacity and crippling

debt, were leading Nissan to collapse (Yoshino & Egawa 2002). Following multiple attempts

to restructure the organisation, Nissan management sought an alliance partner. Renault

became partner and stakeholder in March 1999, investing over $5 billion to acquire a 36.8%

share ownership (Millikin & Fu 2003; Yoshino & Egawa 2002). Renault subsequently

appointed Carlos Ghosn to turn Nissan around.

Ghosn’s approach to the problems faced by Nissan was to capture and build on the strengths

of Nissan and the Japanese culture, whilst integrating tough structural reforms radically

altering Nissan and the Japanese business landscape, involving the entire organisation in the

scope of the restructure.

2.2 Scope and objectives

Restructure was a direct result of the organisational strategy developed at the creation of the

alliance. The strategy called for changes that would ensure survival, lead to profitability and

provide greater market opportunities for Nissan and strengthen the alliance. The scope

encompassed the entire organisation with significant objectives in each functional area of the

business, detailed in Table 2.2-1.

Within these objectives, were many initiatives leading to changes in the functional system.

However, management were pragmatic in delivering the changes by ensuring that only things

that required change were changed (Pelata 2003), representing a key element in Turner’s

(1999) successful vision of scope management; ensuring enough but only enough is done in

the delivery of the projects purpose. This assisted in maintaining organisational support

throughout the duration of the restructure

Comment [BT23]: New page for new section. Number all sections.

Comment [BT24]: Source of data is provided with appropriate citation for the reader to obtain further details.

Comment [BT25]: Relating the theory to the analysis of the project. Shows evidence of having read and understood the materials.



Table 2.2-1. Scope of the restructure

Area affected Changes Stage

Purchasing

Cut costs 20 percent. Cut suppliers by 50 percent. Cut equipment, services suppliers from 6,900 to 3,400. Centralize purchasing.

Implementation

Business Development Hire Isuzu designer Shiro Nakamura as new head of design. Build new $900 million plant in Mississippi. Implementation

Manufacturing Close five plants, Murayama, Nissan Shatai Kyoto, Aichi Machine Industry assembly plants in 2001; Kurihama power train, Kyushu engine in 2002.

Implementation

Sales, Administration & General

Cut expenses 20 percent. In Japan, close 10 percent of Nissan's outlets, recall 1,000 of Nissan employees stationed in dealerships. In U.S., streamline regional operations. In Europe, set up back offices with Renault.

Implementation

Research and Development

Cut platforms from 24 to 15 in 2002, and to 12 in 2004. Add 500 R & D jobs. Implementation

Financial Management

Cut debt to $6.7 billion by 2003. Earn $1.9 billion from asset sales. Sell hundreds of Nissan-owned affiliates. Cut costs by $9.5 billion.

Implementation

Organisation Form cross-functional teams. Develop balanced matrix structure.

Planning and design

Personnel

Cut 21,000 jobs by 2003. Use spin-offs, attrition, part-time jobs, early retirement. Cut 4,000 manufacturing jobs, 6,500 Japanese dealership jobs, 6,000 sales. 5,000 jobs in units to be spun off.

Implementation

(Source: adapted from Yoshino & Egawa 2002).

2.3 Stages and duration

The stages of Nissan’s restructure are conceptually similar to the lifecycle stages identified by

the Project Management Institute (2000) and Turner (1999) in Table 2.3-1. The stages are

used as a problem solving cycle that breaks the process into steps, and as such, an assortment

of models exist (Turner, 1999). However, the stages identified in Table 2.3-1 clearly illustrate

the steps taken and the duration of the restructure. The duration of the stages detailed in Table

2.3-1 were determined by Ghosn to commit the organisation and ensure a rapid return to

profitability (Magee 2003). This is consistent with Turner’s (1999) view of schedules, to

ensure that benefits are achieved when appropriate.

Comment [FoB26]: Tables and figures must have titles.

Comment [FoB27]: Tables and figures must be sourced, if not original work.

Comment [BT28]: Uses the theory as a framework for analysis. Introduces and defines the concept of ‘lifecycle’ for the analysis.



Table 2.3-1. Lifecycle of the restructure

Lifecycle Stages

PMBOK

Lifecycle Stages Turner (1999)

Lifecycle Stages Nissan

Duration Inputs Outputs

Feasibility Proposal & Initiation

Pre-alliance planning and negotiation

Jun 98 to Mar 99

Cross-company teams work together to find synergies

Good relationships formed and creation of the global alliance

Planning & Design

Design & Appraisal

Closing the deal; CFTs making

recommendations

Mar 99 to Jun 99; Jul

99 to Sep 99

Over 500 employees participate in CFT over 3 months

More than 400 researched recommendations to turn Nissan around

Construction Execution & Control

Implementation of NRP

Apr 00 to May 02

Functional areas implement recommendations.

Success. Completion of NRP one year early.

Turnover & Start-up

Finalization & Close-

out

NRP Completion Begin Nissan

180 Apr 02 to …

After NRP, a new growth plan is implemented

The overall duration was considered short by industry standards in relation to the size,

significance and goals of the restructure. This was particularly evident in the negative

commentary from the press and investment houses following the announcement that the NRP

goals at the Tokyo Motor Show in October 1999 (Magee 2003; Yoshino & Egawa 2002).

Comment [BT29]: Compares and contrasts theoretical views of lifecycle with what actually happened in the project.



3 ORGANISATIONAL STRUCTURE Organisational structure defines how tasks are formally divided, controlled and coordinated

(Robbins at el. 2001) within the organisation. An essential component of the restructure was

moving Nissan from a strict functional hierarchy to a balanced matrix utilising cross-

functional teams (Ghosn 2002; Yoshino & Egawa 2002).

3.1 Functional hierarchy

Functional hierarchies otherwise known as traditional or bureaucratic structures are

characterised by functional task areas that have formalised rules, central decision-making and

a clear chain of command (Robbins et al. 2001), visibly apparent at Nissan prior to the

alliance. Stability and efficiency in carrying out routine tasks are the primary advantages,

while lack of strategic focus, slow response to problems, and poor communications are

significant weaknesses in this structure (cited in USQ 2003; Robbins et al. 2001). Ghosn,

recognising that these weaknesses were fundamental components in Nissan’s poor

performance and would hamper the restructure, set up cross-functional teams creating a

balanced matrix to overcome these weaknesses.

3.2 Balanced matrix

The balanced matrix structure integrates the management of functional areas with teams of

cross specialities that have particular goals based on strategic organisational objectives.

(BALANCE OF SUBSECTION REMOVED)

3.3 Cross-functional teams

Cross-functional teams (CFT) are used to cut across functional disciplines and the vertical

communication lines to speed up decision-making, improve knowledge transfer and increase

cooperation. They consist of selected personnel from each of the affected disciplines who

will be mutually accountable and committed to finding quality solutions to further the

organisations strategic objectives (Bishop 1999; Robbins et al. 2001). (BALANCE OF

SUBSECTION REMOVED) Illustrated in Table 3.3-1, Bishop’s (1999) key factors for

successful CFT’s were supported by the organisation, resulting in significant positive results

for Nissan.

Comment [BT30]: New page for new section, with number.

Comment [BT31]: Defines the concept of ‘organisational structure’.

Comment [BT32]: Introduces the framework of organisational structures for analysis of Nissan.

Comment [BT33]: Defines terms and indicates source by use of citations.


Table 3.3-1. Key factors for successful cross-functional teams. Bishop’s (1999)

Key Success Factors

Nissan CFT Examples

Project sponsorship and upper management support

The CFTs had full support of the executive as they instigated and were part of the teams making and then implementing the recommendations.

Project goals / scope / objectives

The project was the reorganization, which the corporate goals and strategy were the focus with clearly identified goals of survival followed by revival.

Leadership Leadership was provided by Ghosn as COO, giving credibility and legitimacy to the reorganization.

Membership / Resources

The team members were selected on their knowledge and performance. They were also given complete access to information and required resources to accomplish their tasks.

(BALANCE OF TABLE REMOVED)


Comment [BT34]: Uses theory as a framework for analysis of Nissan.

3.4 Nissan’s structure

Ghosn layered nine CFT’s (see Appendix 1) across the functional hierarchy creating a

balanced matrix at Nissan; Figure 3.4-1 illustrates this structure. Due to the scope of the

restructure, the CFT’s covered all functional disciplines within Nissan to develop ideas, make

recommendations and assist in driving the implementation of the Nissan Revival Plan (NRP)

(Ghosn 2002; Yoshino & Egawa 2002).

The structure at Nissan provides an interesting opportunity to examine the roles and

responsibilities of personnel in a large organisation, in which its methods, structure and

capability - is the project.



Figure 3.4-1. Balanced matrix organisational structure at Nissan

.

Abbreviations Functional Areas Cross-functional Teams

PP Product planning Bus Dev Business Development Eng Engineering MF & Log Manufacturing and logistics MF Manufacturing R&D Research and development Pur Purchasing S&M Sales and Marketing Fin Finance G&A General and administrative Log Logistics F&C Finance and cost HR Human resources Parts Phaseout of products and parts

complexity management Org Organisation

Comment [BT35]: Provides diagram to illustrate the principle under analysis.

Chairman CEO

Executive Team Leaders

C. Ghosn COO

PP Func.

Eng Func.

MF Func.

S&MFunc.

Pur Func.

Fin Func.

Log Func.

HR Func.

Org

Parts

F&C

Bus Dev

Pur

MF & Log

R&D

G&A

S&M

Nissan’s Balanced Matrix Structure

T E A M S



4 ROLES, RESPONSIBILITIES AND RELATIONSHIPS Project management staffing and team concepts are plainly evident in the restructure of

Nissan from the highest levels. The creation of roles, allocation of responsibilities and

reporting relationships was conducted within the scope of project team theories prescribed by

Kerzner (2003) and Cleland (1998).

4.1 Team roles

The project manager (PM) leads and is responsible for the project outcomes, and fulfilling this

role requires a fusion of personal attributes essential for effective project management - see

Table 4.1-1. Kerzner (2003) draws an analogy to the role of general manager, visible in

Ghosn’s roles as COO and PM, executing the roles and responsibilities of both.

Table 4.1-1. Kerzner’s project manager attributes applied by Carlos Ghosn

Kerzner’s (2003) PM Attributes Application of PM Attributes by Carlos Ghosn Project

ManagementGeneral

Management

Honesty & integrity All actions carried with transparency and credibility. Would resign if NRP objectives not met. ✓ ✓

Understanding of personnel problems

Is a family man, active in the community indicating a base for understanding problems. ✓

Understanding of project technology

Was in charge of similar reforms at Renault and Michelin, though on a smaller scale. ✓


(Source: adapted from Kerzner 2003)

However, the restructure required dedication to the same goals by a number of individuals

who would be integral to the project team (Kerzner 2003). The new roles created in the

restructure where based around the formation of the CFTs. The CFTs consisted of two team

leaders; a team pilot; and nine team members; with the authority to form additional sub teams

as required (Ghosn 2002; Magee 2003), represented in Figure 4.1-1. The teams were

Comment [BT36]: New page. New number.

Comment [BT37]: Theoretical principle of analysis is ‘team theories’. Source of theory is cited.

Comment [BT38]: Uses table to show analysis clearly and concisely. This is much clearer than using 500 words or so.

Comment [BT39]: Uses and cites theory to be used as a framework for analysis of chosen project.

Comment [BT40]: Indicates source of table structure.


restricted to ten members in an effort to maintain efficiency whilst providing a good cross-

section of knowledge and skills; consistent with quality team environments detailed in

Robbins et al. (2001).

Figure 4.1-1. Cross-functional team structure at Nissan (adapted from Kerzner 2003, p. 169).

4.2 Role responsibility

Kerzner (2003) describes generic responsibilities and skill requirements that are incumbent to

roles of the project team in Table 4.2-1. Arrays of these responsibilities were applicable to all

project members. Nevertheless, outside the scope of specific responsibilities, laid the

daunting recognition of individual and team responsibility that if they failed, Nissan as a

company would likely fail (Magee 2003; Yoshino & Egawa 2002). Contrasting with Turner

(1999), Nissan did not use responsibility breakdown charts to detail roles and responsibility,

instead relying on clearly defined relationships and delegated tasks issued, direct from the

executive, outwardly successful.

Responsibilities Skills Applies to

Coordinating and integrating subsystem tasks. Planning CFT Pilot and members. Determining technical and manpower

requirements. Coordinating Analyzing

Measuring technical progress, schedules and budgets.

Understanding organisation


Team Leader Executive 1

Team Leader Executive 2

CFT#1 Pilot

Func # 1

Func # 2

CFT #1 Members

Func# 3

Project Manager

Table 4.2-1. Responsibilities and skills incumbent on the project team (Kerzner 2003, p. 162)




4.3 Communicating and reporting

(REMOVED)

4.4 Appropriateness of the structure

Nissan was a splintered global organisation with numerous strengths, however it also had a

plethora of problems. Nissan required solutions designed from within the organisation to

ensure support and commitment from management and employees, and it needed them fast

(Ghosn 2002). Numerous top down reforms had either failed or been watered down, resulting

in a workforce that while extremely capable were left demoralised and believing it was

someone else’s fault (Yoshino & Egawa 2002).




5 TEAM SELECTION AND DEVELOPMENT Team selection for any project is a critical task, as the personnel selected can make or break

the project. The project requires that all personnel are committed and capable in the

achievement of specific goals (Kerzner 2003). Knowledge of project personnel requirements,

such as type, quantity, specialities, availability, and qualities are required. However, selection

normally begins with the PM, as an executive decision (Kerzner 2003).

5.1 Team selection

Following the alliance agreement, Louis Schweitzer CEO of Renault, selected Ghosn as the

individual who would head the restructure. Ghosn was the natural selection, he had been

instrumental in the feasibility and lead up work of the alliance, had previously conducted

three corporate turnarounds, had the personal attributes required for the task (see Table 4.1-1),

and he volunteered. This task would be his most difficult yet, though Schweitzer was

confident he was the man for the job, few could disagree (Magee 2003; Yoshino & Egawa

2002).

(BALANCE OF SECTION REMOVED)

5.2 Team formation

CFT formation was decisive and immediate, Ghosn named the nine CFTs five days after

officially taking office as COO. The format was simple, the pilot would be the only full time

member of the team, all other members were to maintain positions in their functional areas.


The rapid introduction of the CFTs contrasts with Cleland’s (1998) five-phase life-cycle of

team design, execution and organisation preparation. Cleland (1998) argues that the

organisation needs time to prepare for teams and details a laborious five-phase plan for team

development through to maturity. The CFTs at Nissan were formed in a matter of days and

reached full maturity within a month. This achievement was possible by the manner in which

the executive empowered the teams, providing legitimacy and authority ensuring

organisational compliance (Magee 2003). This concurs with Cleland’s theory of teamocracy,

just applied with greater pace, larger focus and less finite planning.

5.3 Team development

Comment [BT41]: New page and number.


Cross-functional team environments are recognised as providing an assortment of positive

team and individual opportunities, which include motivation, flexibility, lateral thinking,

communication enhancement, and quality learning (Bishop 1999).


Initially, the members of the CFTs were shell shocked at the task given to them and the

resources provided. They were also skeptical that management were serious about ‘no strings

attached’ policy (Magee 2003). The CFTs developed along the lines of the classic five-stage

life-cycle model, Figure 5.3-1, passing through the first four stages, avoiding the last through

permanence.

Figure 5.3-1. Five-stage lifecycle of teams (Robbins et al. 2001 pg. 273).


The initial three steps lasted approximately one month as the members of different locations,

functions and nationalities became familiar with each other. Recognition of the problems

facing them and belief in the new organisational structure, added to this period of uncertainty

(Magee 2003).


1 Forming: Characterised by

uncertainty

2 Storming: Characterised by

inter-group conflict

3 Norming: Characterised by cohesiveness & coming together

4 Performing: Characterised by quality & high

output

5 Adjourning: Characterised by wrapping up &

goodbyes

Comment [BT42]: Provides simple diagram to illustrate the phases of team development.



6 LEADERSHIP Leadership is such an elusive subject (Turner 1999) that after thousands of research studies

there is still no universally accepted definition (Cleland 1999). Robbins et al. (2001, p. 400)

offer ‘…Leadership is the ability to influence and develop individuals and teams to achieve

goals that contribute to a worthwhile purpose.’ This definition encompasses a broad range of

perspectives on leadership, though does not limit the methods, traits or characteristics used to

achieve worthwhile goals.

6.1 Leadership at Nissan

Carlos Ghosn’s leadership at Nissan as COO and PM is a direct and positive example of

Robbins et al. (2001) definition of leadership. Employing a combination of leadership styles

that allowed him to provide the vision and motivation to turn around Nissan. This is

consistent with Cleland’s view (1999) that project leaders need to be flexible and not

necessarily consistent with their leadership style over the extensive range of project activities.

Table 6.1-1. Leadership traits displayed by Ghosn. (Cleland 1999; Magee 2003; Robbins et al. 2001; Turner 1999)

Traits Robbins Cleland Turner Ghosn Displayed by Ghosn

Honesty and integrity ✓ ✓ Acted with commitment, openness and transparency

during the reorganization.

Intelligence ✓ ✓ ✓ Educated to Masters level. Spoke four languages.

Self-confidence ✓ ✓ ✓ Volunteered for the role to reform Nissan.


Comment [BT43]: New page and new number.

Comment [BT44]: Use of theory (or theories) to analyse the chosen project.



Regardless of the style employed, Table 6.1-1 details a selection of traits or characteristics

generally exhibited by effective and successful leaders (Cleland 1999; Robbins et al.2001),

and how Ghosn displays them. Note the parallel to Kerzner’s (2003) PM attributes (see Table

4.1-1).


6.2 Success

The success at Nissan is the result of a combination of factors, however, the leadership by

Ghosn is the principal factor. His leadership provided the vision and motivation that

provoked the commitment from the thousands of employees required to perform the tasks that

brought Nissan back from the brink of collapse.



7 CONFLICT Conflict is the perception of one party, that another has or is about to negatively affect them

(Pinto & Kharbanda 1995; Robbins et al. 2001), existing as a regular component in

organisational behaviour, both internally and externally that can take on a functional or

dysfunctional form. Dysfunctional conflict is that which hinders performance and should be

eliminated as soon as possible, in direct contrast to functional conflict that can be utilised to

stimulate discussion, ideas and increase motivation (Robbins et al. 2001). Ghosn utilised

functional conflict and sought to prevent dysfunctional conflict from occurring during the

restructure.

7.1 Conflict at Nissan

Conflict during the restructure occurred as a result of: changing organisational norms, job

security, long held beliefs, disagreements on goals and methods, and differentiation, Table

7.1-1 describes. It can be assumed that conflict arose other typical areas such as, lines of

authority, reward systems and scarce resources (Magee 2003; Pinto & Kharbanda 1995),

however, the material available does not provide adequate information on these aspects.

Table 7.1-2. Conflict resolution methods employed at Nissan. (Magee 2003; Pinto & Kharbanda 1995; Robbins et al. 2001)

Conflict Sources Pinto & Kharbanda

(1995) Occurrence at Nissan Methods of conflict

resolution employed

Competition for scarce resources

Occurrence not reported. Unlikely given that Ghosn ensured resources were delivered where required.

Violation of organisational norms

Breaking of traditional Japanese business practices, examples, plant closure, performance pay, and unwinding of Keiretsu.

Avoidance; Smoothing; Problem solving;

Superordinate goals Disagreements over

goals or methods Functional conflict within the CFT about level and depth of reforms.

Problem solving; Superordinate goals;


Comment [BT45]: Use of theory for analysis.



The conflicts described in Table 7.1-1 had the potential to become severely dysfunctional and

derail the restructure process on a number of fronts. Recognising this, Ghosn sought to

prevent conflict from occurring by eliminating the common cause of faulty or lack of

communication about the changes (Pinto & Kharbanda 1995).

(BALANCE OF SUBSECTION REMOVED).



8 CONCLUSION This report on the restructure of Nissan, following the alliance with Renault illustrates a

complete structural and strategic shift utilising many project management techniques. Carlos

Ghosn, with relative freedom initiated a structural shift from a functional hierarchy into an

effective and successful balanced matrix. This change created new team roles and

responsibilities in line with project management team theories from Kerzner and Cleland,

combining with short, clear, and simple communication and reporting chains. This

organisational structure proved to be the most appropriate for the restructure efforts.

(BALANCE OF SECTION REMOVED)

The turnaround of Nissan is remarkable by any measure; the fact that it can primarily be

attributed to one man’s leadership is astounding. Ghosn formed, focused and motivated the

Nissan employees into an exceptional team that continues to drive forward. The utilisation of

practices relevant to general and project management illustrate their effectiveness when

applied in an organised and structured format. This turnaround provides opportunities for

benchmarking of management, CFTs, leadership, personnel policy and conflict dealings, for a

whole range of organisations.

Comment [BT46]: New page for new section. Numbered.

Comment [BT47]: Conclusion about the project drawn from the analysis.

Comment [BT48]: Conclusion drawn from the analysis.

Comment [BT49]: Conclusion.

Comment [BT50]: This type of comment is a bit judgmental for a professional report. Make sure it stays objective.



9 RECOMMENDATIONS This restructure is a model example of employing project management principles and general

management practices in conducting a major restructure, the leeway for suggesting

recommendations to improve the results is limited. However,

1. Allowing more time for the planning stage may have allowed the organisation and the

CFTs to produce a better output than what they did. This was within the realms of time

available, as implementation of the reforms did not begin until six months after the planning

stage was concluded.

2. This restructure should be studied by all organisations as a guide to leadership, team

building and problem solving.

Comment [BT51]: New page. New section.

Comment [BT52]: These recommendations should address the issues identified in the conclusions. They should be specific, clear, and ‘actionable’.



References Bishop, SK 1999, ‘Cross-functional teams in functionally aligned organisations’, Project Management Journal, September, pp. 6-12. Cleland, D 1998, The strategic management of teams, Jossey-Bass, San Francisco, pp. 33-55. Cleland, D 1999, Project management strategic design and implementation, McGraw-Hill, New York, pp. 367-88. Ghosn, C 2002, ‘Saving the business without losing the company’, Harvard Business Review, January 2002. Kerzner, H 2003, Project management: a systems approach to planning, scheduling and controlling, 8th edn, John Wiley & Sons, New Jersey, pp. 139-84. Magee, D 2003, Turnaround: how Carlos Ghosn rescued Nissan, HarperCollins, New York. (THE BALANCE OF THE LIST OF REFERENCES HAS BEEN REMOVED)

Bibliography Taylor III, A 2002 ‘Turnaround artist: Carlos Ghosn is giving Japan a lesson in how to compete’, Fortune International, vol. 145, is. 4, pp. 34+, viewed 4 May 2003, INFOTRAC Business ASAP International, A83319133.

Comment [BT53]: New page. New section. No number.

Comment [BT54]: Set out in Harvard style. Alphabetical listing. Full details of each publication.

Comment [BT55]: A bibliography generally contains additions readings of interest, but which have not been cited in the text. This is optional.


Appendix 1. Cross-functional Teams at Nissan


(BALANCE OF APPENDIX REMOVED) (Source: Ghosn 2001, pp. 6-7).

Team Business Development Purchasing Manufacturing &

Logistics

CFT Leaders

Executive VP of overseas sales & marketing Executive VP of product planning

Executive VP of purchasing Executive VP of engineering

Executive VP of manufacturing Executive VP of product planning

CFT Pilot General manager of product planning

General manager of purchasing

Deputy general manager of manufacturing

Functions Represented

Product planning Engineering Manufacturing Sales and marketing

Purchasing Engineering Manufacturing Finance

Manufacturing Logistics Product planning Human resources

Team Review Focus

Profitable growth New product opportunities Brand identity Product development lead time

Supplier relationships Product specifications and standards

Manufacturing efficiency and cost effectiveness

Objectives Based on Review

Launch 22 new models by 2002 Introduce a minicar model by 2002 in Japan

Cut number of suppliers in half Reduce costs by 20% over three years

Close three assembly plants in Japan Close two powertrain plants in Japan Improve capacity utilization in Japan from 53% in 1999 to 82% in 2002

Comment [FoB56]: Appendices come after the List of References and should be numbered Appendix 1, Appendix 2, etc. There is no need to say ‘Table 1’ etc.

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