Carlos Ghosn: A Lesson in Leadership and Cultural Differences

Every now and again the business world hands the cross-cultural training world some great examples of cultural difference in action!

One such case study is that of Carlos Ghosn, ex-CEO of the Japanese car giant, Nissan.

Ghosn, a French citizen who was born in Brazil of Lebanese descent, took over in 2001 and was widely viewed as a success story for helping turn the company's fortunes around.

Foreign CEOs are rare in Japan, which added further to the praise being thrown his way.

That all changed in 2018 when Ghosn was arrested on suspicion of serious financial misconduct.

A CNN analysis went on to describe serious tensions between Ghosn and the Japanese board over his running of the company.

His approach, demeanour and style were all seen as being in direct contradiction to the 'Japanese way'.

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Cultural Differences in Leadership Style

"It's like organ rejection" 

So where did Ghosn go wrong in terms of not fitting in with Japanese culture?

 

All about 'Me'

A major criticism of Ghosn's style was that it was all about him.

Japanese corporate culture is heavily steeped in Buddhist and Shinto philosophy which are all about 'us' and creating 'harmony'. Success is always collective. A leader who congratulates themselves before the team is not a leader in Japan.

"He nurtured hero worship and took too much credit for positive developments"

 

Humility, or lack of

Japanese culture stresses humility, discretion and balance.

It sees extremes and opulence as unhealthy for the individual and for society. A leader should set the standard. Ghosn on the other hand led an extravagant lifestyle with regular trips around the world and hosting lavish parties.

Japanese companies also prefer CEOs who don't take credit for successes and keep a low profile, experts say. Ghosn didn't fit that mould. He was a regular at World Economic Forum meetings and threw lavish wedding parties.

 

Above the rest

Although Japanese culture and society is hierarchical, it is also particular in how this hierarchy works.

Those at the top are expected to act in a certain way and always for the benefit of the group. As a result you will see the salary differential between the top and the bottom in Japan is much smaller than in the USA, for example. Foreign CEOs earning more than their Japanese counterparts are therefore viewed with some negativity.

"There's a sense they're there to make hay while the sun shines and will take the money and run when things go badly"

 

You Can't Escape Culture

Culture is everywhere. No matter how experienced or business-savvy you may be, cultural differences can, do and will play a role in any sort of international commercial venture.

As the example of Ghosn and Nissan shows, when two or more cultures come together there needs to be a level of awareness around potential cultural challenges as well as a shared attitude towards finding positive compromises.

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Learn About Japanese Business Culture

Do you work with the Japanese? You might find our Online Japan Cultural Awareness Course useful as it covers many of the cultural differences faced by foreigners visiting Japan for work or working with Japanese peers.

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Image thanks to Norsk Elbilforening on Flickr (CC BY 2.0)