Carlos Ghosn's leadership style and characteristics analysis

¶ … Carlos Ghosn is a Good Leader

Leadership Style Analysis

The challenges determined by the modern business environment require that companies are able to quickly adapt to the changes they impose. This makes it important that these companies are managed by individuals that possess sets of characteristics that allow them to develop flexible strategies in order to help them achieve the established results. Given these conditions, companies need leaders, not just managers.

There are several differences between leaders and managers. Leaders are oriented towards people, while managers are oriented towards actions. Managers limit their activity within the company to developing and implementing strategies, ensuring the company's activities are properly run, and on establishing procedures. In addition to these activities, leaders try to inspire people, to determine their team members to improve their performance and to help them create value. Also, leaders are usually characterized by innovation. They are not ordinary people and, therefore, determine others to follow their example.

Leaders are different from one another, but they share common characteristics. The most important skills that successful leader should have are represented by integrity, honesty, courage, commitment, passion, confidence, wisdom, responsibility, and others. There are numerous skills and abilities that leaders should possess. However, these sets of characteristics are different in the case of different leaders, and of different activities they address. 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 CEO of Nissan and Renault.

Carlos Ghosn Leadership Style Analysis

Various important leaders known worldwide are characterized by different leadership styles. 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 one. Leaders with this style do not have close relationships with their subordinates, they do not encourage their initiative, and are not interested in discussing their ideas. However, there are several advantages associated with this leadership style, as it provides great motivation for managers. These advantages rely on the fact that the leader in this case is able to make decisions quickly and does not have to discuss them with other stakeholders.

The participative leadership style is quite the opposite of the autocratic style. In this case, leaders are interested in encouraging and supporting group decisions and in ensuring that their team discusses each issue when making a decision. They rely on involving their team in the decision making process. Consultation and participation of the group is very important for democratic leaders. Such leaders focus on cooperation of their subordinates.

Leadership characteristics of Carlos Ghosn

The CEO of Nisan 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

Carlos Ghosn considers transparency of being extremely important within the organization. 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. This way, the activity within the company and the relationship between departments can improve.

Relationship between execution and strategy

In Ghosn's opinion, execution should be 90% of the job, and strategy should be 10%. In other words, although numerous specialists in the field consider that the most important thing regarding 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 disfunctions 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 I this activity does not understand the strategy or does not have the skills and abilities 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 to this, Ghosn is interested in the development of its subordinates. By addressing aspects like their career development, Ghosn expects them 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 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 leaders that take great interest in addressing communication issues within the companies he manages.

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, if approached properly it can determine important results for companies in international level.

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, therefore, different leadership styles. In his opinion, the leader must reveal several dimensions that should be easily applied by understanding the causes and impact of each situation. The leadership styles associated with Ghosn are:

Charismatic or transformational

Democratic

laissez-faire

Situational

People oriented

Charismatic and transformational leadership

This leadership style cannot be learned by the leader in case. This means that Ghosn was born with the ability to embrace the characteristics of this leadership style. This ensures that he is close with his subordinates and they feel they can easily approach Ghosn. This encourages a relaxed environment within the company that favors communication (Avolio & Gibbons, 1988). 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 the must be reached, but 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 suggestions from his employees.

Most leaders of this global size do not usually have the time to investigate the way his subordinates feel about certain situations. But 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).

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.

Conclusions

Carlos Ghosn is one of the most successful leaders on global level. His interesting approach to leadership and the results he obtained through his companies have determined specialists in the field to analyze his behavior. Their findings are very interesting for theorists and specialists in the field.

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. The most important characteristic of 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. This allows them to take better decisions by frequently practicing this activity, and to make decisions more rapidly, which increases their productivity and efficiency.

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. Specialists in the field also consider that Ghosn should make certain modifications to his leadership style. They are 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.

Reference list:

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4. Laissez Faire Leadership Style and Management Styles Theory (2010). ELS. Retrieved February 27, 2011 from http://www.effectiveleadershipstyles.co.uk/Laissez_faire_leadership_style_&_management_styles_theory.html.

5. Schemerhorn, J. (2001). Situational Leadership. Ohio University. Retrieved February 27, 2011.

6. Carlos Ghosn (2007). CNBC Magazine. Retrieved February 27, 2011 from http://www.cnbcmagazine.com/story/carlos-ghosn/263/1/.

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