Write a report on an agreed REAL case study business covering the following points: How entrepreneurial is the business currently What are the projections for the business as it is c

BEM3060

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BEM3060 Managing Entrepreneurially

Aliyev Nurgun (680065530)

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Business analysis report

This business analysis report will examine the current entrepreneurial aspects of Nissan by focusing on areas such as leadership, innovation and creativity along with other key entrepreneurial characteristics of the company. This report will pay particular attention to how Nissan could become more entrepreneurial by offering proposals after analysing the history and current weaknesses of the company. Furthermore, the report will give projections for the state of the company now and after the proposals that have been advised.

Nissan is the leading Japanese car company which was founded on 26 December 1933 and is engaged in sales and manufacturing automobiles along with the provision of sales financial services. Nearly 87 years later, Nissan is one of the leading car manufacturers in the world with more than 5 million sales per year since 2013. Since 1999, Nissan has been part of the Renault–Nissan–Mitsubishi Alliance (Mitsubishi joining in 2016), a partnership between Nissan and Mitsubishi Motors of Japan, with Renault of France. In October 2019, Makoto Uchida was unanimously chosen by the board of directors to become the new Nissan CEO, taking office on December 1, 2019. As of 2013, Renault holds a 43.4% voting stake in Nissan, while Nissan holds a 15% non-voting stake in Renault. From October 2016 onwards, Nissan holds a 34% controlling stake in Mitsubishi Motors. In 2013, Nissan was the sixth largest automaker in the world, after Toyota, General Motors, Volkswagen Group, Hyundai Motor Group, and Ford. Taken together, the Renault–Nissan Alliance would be the world's fourth-largest automaker (Nissan, 2020).

Nissan is a prime example of an entrepreneurial company when it comes to unique organizational methods, creativity and innovations. Nissan is also the largest electric vehicle manufacturer behind Tesla, with global sales of more than 450,000 all-electric vehicles as of December 2019. Nissan received the ‘Innovation in Electric Vehicles’ award not just for its all-electric models, but also for its work in developing EV infrastructure and driving wider improvements across the EV industry. The company is also planning a 20% increase in outdoor charging points in Europe, and is working on bi-directional charging, a clever system allowing Nissan LEAF owners to draw power from the grid to charge their car and sell power back to the grid at peak times for others to use (Nissan, 2017).

Nissan also aims to improve employee education by implementing various HR policies to achieve growth and efficiency. The company has founded the Monozukuri University intending to provide learning opportunities and pass down necessary skills to future generations. This is quite vital for the company as it had to recall 1 million vehicles in 2017 due to poor training procedures. Furthermore, the company provides cultural diversity training to promote understanding of the actions and mindsets of all the employees within the company. However, the company has also suffered from poor managers, as the employees protested that the management in some sectors is not human-centric.

Risk management is also one of the key areas to focus as the company has suffered from poor risk management. In 2016, the car sales had taken a significant dive in Japan after their supplier Mitsubishi Motors revealed that they were manipulating fuel economy test data for the last 25 years on some the vehicles. This is a direct result of an uncommitted approach to work by Nissan as they failed to conduct a proper risk assessment of its supply chain. A risk assessment process is a must for businesses when it comes to identifying potential business risks.

Throughout the years, Nissan had scandalous incidents because of the leadership that affected the reputation and image of the company. Carlos Ghosn, the CEO of Nissan and Renault for years held their two-decade partnership together until his arrest last November on allegations of financial misconduct, which he has denied. His downfall exposed shoddy corporate governance at Nissan and brought long-standing tensions between the automakers to the fore (Inoue and Nussbaum, 2019). Ghosn was known for dominating decision-making and had excessive influence over Nissan and its alliance with top shareholder Renault. Leaders are those who seek opportunity to communicate and mentor others in an effort to clarify and achieve team objectives, Ghosn had his selfish objectives. As a result, Makoto Uchida decided to adopt collective-style leadership when he came to power by making significant changes in the corporate governance structure.

(Nissan-Global, 2020)

This is a perfect example of leadership by Makoto Uchida as he created an environment in the company where employees can make speedy and vital business decisions. However, there are doubts within the company that Uchida is not the man to deal with the current crisis, who doesn’t have the trust of alliance partners. His critics accuse him of being “invisible” and that he lacks leadership skills. During meetings, it is usually the director of the company who addresses the employees at various plants, just like when he didn’t even take the stage after Ghosn incident. This is unacceptable by Makoto Uchida as it is the leaders who must communicate and deliver the vision to achieve company objectives.

These days there are many challenges and barriers for the companies to become more entrepreneurial. The COVID-19 pandemic affected all the industries around the world by forcing partial and full shutdowns of plants and factories. This led the Monozukuri university and all other training centres of Nissan to not operate restricting new learning opportunities. The shutdown of factories and issues with supply chain will significantly affect the company’s potential to innovate. As a result of the pandemic, the company projects an operating loss of $4.5 billion for this year which will increase uncertainties for the company making it more difficult to cope with negative risks. This will lead to disruption of the supply chain and finance limiting the ability to fund operations and provide employee relief. Another issue is the fact that currently, employees may have to work from home which will have a significant impact on human resource management. In fact, 26% of employees who work remote report being socially isolated and 41% say they lack emotional connections with their colleagues (Kropp, 2020). Managers within the company will not be able to properly monitor employee success and engagement and leaders will have a difficult time to communicate and deliver their vision. Furthermore, operating in a non-work environment will also affect the productivity and relationships of teams within the company.

There are many precautions and actions Nissan should take in order to become more entrepreneurial in these challenging times. Firstly, the company should regain its ability to innovate in an industry that is shifting towards electric vehicles and other types of mobility. Although the pandemic had an impact everywhere in the world, the circumstances and rules differ from country to country. Therefore, Nissan should strategically expand its innovation and training centres globally to not face the issue of the full shutdown of plants. The centres should also train employees to adapt to work efficiently during a pandemic and different circumstances. Moreover, the company should focus on having more gender-diverse workplace to have easier access to various resources, information and wider industry knowledge. The ratio of the female managers to male is only 13.6 % globally which is very low. Nissan should pay particular attention to women in managerial positions by providing mentoring programs to support their further career development into higher leadership positions.

Furthermore, to achieve an agile response to risk management during Covid-19 pandemic, managers should increase engagement and collaboration across risk functions and leverage new technologies and tools. By increasing the speed and accuracy of data collection and analysis, these tools can help swiftly provide risk insights to the business to support informed decision (PWC, 2020).

Finally, leaders within Nissan should focus on adopting the concept of diversity intelligence (DQ) in order to achieve organisational goals and effectively lead employees during this crisis. Diversity intelligence provides an opportunity for leaders to reflect on their actions and behaviours toward all employees and to effectively implement new strategies (Hughes, 2016) and that’s exactly what Makoto Uchida needs to implement.

These proposals will eventually have a positive impact entrepreneurially, however, there will always be uncertainties. Focusing on innovation will help the company to succeed in a competitive industry and have vertical progress. Innovations and products will have much higher demand and positive financial impact which will help to improve other entrepreneurial aspects of the company. Furthermore, training and supporting employees to adapt to current circumstances will dramatically improve employee efficiency and satisfaction. This will also encourage creativity and progress within the teams of the company. Acquiring new tools and collaboration for risk management will have the greatest impact by eliminating potential risks that the company suffered throughout the years. Finally, by implementing new policies and concepts like DQ, leaders within Nissan could achieve better relationships and an overall increase in employee performance and satisfaction.

In conclusion, it is comprehensible that Nissan has both positive and negative entrepreneurial aspects. It is quite clear that there will be many challenges and barriers in the upcoming years because of the pandemic. Therefore, the company should rapidly take necessary precautions and actions in order to survive during these times. Nissan needs to mainly focus on its risk management as it led the company to have a huge financial loss. Moreover, the company should keep on concentrating on its training centres and adopt various HR policies to have some kind of progress. Ultimately, Nissan has to focus on all the entrepreneurial aspects of the company and take action as soon as possible by developing new organisational methods and policies to survive in these challenging times.

References

COVID-19 and the automotive industry. PwC. (2020). Retrieved 2 November 2020, from https://www.pwc.com/us/en/library/covid-19/coronavirus-impacts-automotive.html.

Nissan. En.wikipedia.org. (2020). Retrieved 5 November 2020, from https://en.wikipedia.org/wiki/Nissan.

PwC. PwC. (2020). Retrieved 4 November 2020, from https://www.pwc.com/us/en/library/covid-19/risk-functions-response-strategy.html.

Hughes, C. (2016). Using Diversity Intelligence for an Inclusive Organization. Main. Retrieved 4 November 2020, from https://www.td.org/magazines/td-magazine/using-diversity-intelligence-for-an-inclusive-organization.

Inoue, K., & Nussbaum, A. (2019). Nissan power struggle ends with Renault-backed collective leadership. Automotive News Europe. Retrieved 5 November 2020, from https://europe.autonews.com/automakers/nissan-power-struggle-ends-renault-backed-collective-leadership.

Kropp, B. (2020). The lasting effects of coronavirus on HR and business – Personnel Today. Personnel Today. Retrieved 3 November 2020, from https://www.personneltoday.com/hr/the-lasting-effects-of-coranavirus-on-hr-and-business/.

NMC. Official Great Britain Newsroom. (2020). Retrieved 5 November 2020, from https://uk.nissannews.com/en-GB/releases/release-426212058-nissan-is-fully-charged-with-innovation-in-electric-vehicles-honour-at-annual-carbuyer-alphr-car-tech-awards.

Nissan-global.com. (2020). Retrieved 5 November 2020, from https://www.nissan-global.com/EN/COMPANY/PROFILE/CORPORATEGOVERNANCE/pdf/Overview_EN.pdf.

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