although they maintained good customer-supplier relationships with their former partners. As a result of their exit and Ghosn’s emphasis on reduced purchasing costs, Nissan began to substantially lower its cost after the keiretsu investments were sold.
 Ghosn reorganized the way that Nissan operated. The organization was restructured toward permanent cross-functional departments, which each serviced one product line. All unnecessary positions were eliminated. Employees were disciplined much more strongly for inaccurate or poor data than misjudgment, thereby stimulating risk-taking behavior and personal accountability. Product quality, reliability, and customer service were stressed.
 A performance-based incentive system was implemented. These incentives included cash incentives and stock options for achievements that could be linked directly to successful operating profits and revenue. Promotions were also tied to this new system.
8. What grade would you give Carlos Ghosn for the job he has done in crafting the turnaround plan at Nissan? What is it that you like or dislike in his plan? Which elements were the most consistent with the Japanese culture? Which were the least consistent? How were key elements received by employees? What about by external stakeholders? Why were employees willing to accept elements of the turnaround plan that were inconsistent with their corporate and national culture?
Most students will be inclined to give Ghosn an A+ based on his improvement of the profitability of the company, reduction of the redundancies in the workforce, freeing up cash from keiretsu partnerships, efficiently reorganizing the structure of the departments, encouraging worker autonomy, and positively altering the reward system. However, his plan does not include one crucial element — an exit strategy.
Students need to understand that a plan is not completely accomplished once the immediate goals have been achieved; someone must take over and, at least, maintain the progress of the company, once the previous leader is gone. Thus, Ghosn should receive a high grade for his leadership but not an A+. A grade of “incomplete” may be appropriate until his selection of a successor is accomplished. This exit strategy could consist of hands-on training, a handbook of procedures, previous performance guidelines, or personal recommendations.
Not all of Nissan’s stakeholders favorably viewed Ghosn’s leadership. Some of his most vocal critics pointed out instances in which he took actions that were inconsistent with Japanese culture. For example, the media was critical of the plant closings and layoffs he initiated, industry experts found fault with this performance-based system that led to the firing of several key executives, and some employees did not agree with the advancement of high performing, younger managers over more senior employees. Ghosn did not seem to pay attention to the media when he was openly criticized and labeled a gaijin, but he might have tried to smooth over relations, especially since one of his goals was to work within cultural restraints, and by laying off employees he was violating the tradition of lifelong employment. Further, in terminating these employees Ghosn did not make any provisions for the former Nissan employees. Instead, he relied on the Japanese government to offer subsidies and help the affected workers.
According to the elements of Japanese national culture defined in the case, students will note that Ghosn utilized the cooperative nature of the people to help execute the NRP. The CFTs would also have not worked without the cooperation of the members on each respective team, along with the executive management’s. Another important cultural element that the NRP required from its participants was consensus. Once management adopted the plan and the CFTs began to champion change, consensus from