Transformational CEOs

Transformational CEOs

Leadership and Management Success in Japan

Kimio Kase, Francisco J. Sáez-Martínez and Hernán Riquelme

Transformational CEOs questions why some Japanese firms succeeded in the 1990s despite an economy that failed – regardless of the burst of the ‘bubble’ economy, a number of Japanese companies have maintained or extended their international leadership in particular sectors. The authors argue that whilst some of the reasons for successes are plain common sense – operational effectiveness and superior CEO leadership – some are Japan-specific and point to a break with traditional leadership rationale.

Nissan: the ghost era

Kimio Kase, Francisco J. Sáez-Martínez and Hernán Riquelme

Subjects: asian studies, asian business, business and management, asia business, business leadership, international business, strategic management


A1. Nissan: the Ghosn era INTRODUCTION Grant and Neupert (1999) summarised automotive industry trends as follows: 1. Technological and design convergence: cars look more alike. Front-wheel drive and disc anti-lock brakes, suspension, and steering systems are more standardised. Body shapes are increasingly similar. 2. Market segmentation in different countries is growing more consistent: (1) luxury; (2) sport-utility; (3) passenger minivan; (4) mid-size family sedans; (5) subcompacts; etc. The relative size of the segments varies between countries. 3. All major car manufacturers have adopted Toyota’s lean production system. Increased flexibility lowers minimum efficiency levels. So, average plant size is 150000–300000 units a year. 4. New product development cost increases mean smaller producers become cost-uncompetitive. This means new product development is a critical differentiating organisational capability. 5. Development and supply of sophisticated subassemblies (transmissions, braking systems, and electrical and electronic equipment) increase component manufacturer negotiating power. 6. Cost reduction, driven by increasing competition, is a key success factor. Outsourcing, JIT scheduling, automation, use of low-cost locations, etc., are intensely sought. 7. Excess global capacity: capacity utilisation was around 70 per cent in the US and Western Europe in 1998 against 60 per cent in Asia. 8. Internationalisation: through trade and foreign direct investment the global car market is dominated by US, Japanese and European large car makers. In this scenario, a shock wave spread in the automotive world in March 1999 at the announcement that France’s Renault would take a controlling stake in Japan’s Nissan. It was a symbolic event heralding...

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