Interesting story regarding Carlos Ghosn

 

 

relates to an interesting story regarding Carlos Ghosn who previously masterminded the successful turnarounds of both Nissan and Peugeot and then became the CEO of both companies as well as helping Mitsubishi. Mr. Ghosn was known as a workaholic CEO and would fly back and forth (6,000 miles one way) each week between Tokyo and Paris where the companies are headquartered. He was considered a pioneer CEO with great vision and commanded a large compensation package. Then, in November 2018, Mr. Ghosn and a Nissan executive, Greg Kelly, were suddenly arrested after landing in Tokyo on charges of Mr. Ghosn understating his tax obligations. One of the primary tax issues in this case related to deferred compensation (Chapter 13 material) and it’s disclosure. Mr. Ghosn and his aide, Greg Kelly, claim that they did nothing wrong. Mr. Ghosn believed that he would not be able to provide an adequate defense for his position and there was much publicity to support him regarding the alleged unfairness of the Japanese prosecution system regarding Mr. Ghosn’s treatment as compared to US prosecutions. (Over 99% of cases that go to trial in Japan result in a conviction, usually based on a confession.) We don’t see anything like that conviction rate in the US trial system.

Then, on New Year’s eve of 2020, Mr. Ghosn arranged a daring escape to his birth home in Lebanon with the help of a team of people including a former green beret literally involving planes, trains and automobiles and a large musical box. He is currently still residing in Lebanon.

 

Sample Solution

This is a scenario that belongs in an over-the-top Hollywood film rather than the deeds of a real-life auto industry CEO. Carlos Ghosn, who looks a lot like Mr. Bean, went from being universally praised as a highly regarded CEO and giant of the car industry to a worldwide fugitive in a matter of months. Ghosn, a Brazilian-born French business magnate with Lebanese ancestry, was the successful CEO of Nissan Motor Company, Renault SA, and Mitsubishi Motors until recently. Under Ghosn’s leadership and administration, the firm became one of the largest and most lucrative worldwide automotive manufacturers.

situation to be deduced, and thus allows the identification of suitable leaders for tasks. The favourableness of the situation depends on three characteristics: leader-member relations, the support and trust the leader as from the group; task structure, the clarity of the task to the leader; and positional power, the authority the leader has to assess a groups performance and give rewards and punishments (Fiedler, 1967). If the leaders approach matches what is required from the situation then success is predicted for the group.
Fiedler’s contingency model offers a very austere categorisation of leadership, clearly defining which situations will and will not result in success for a potential leader. At the senior management level of a hierarchal structure within an organisation the theory can be applied freely, firstly due to the ease at which persons can be replaced if their LPC score does not match that required of the situation (Pettinger, 2007). Secondly, and most importantly, is to ensure that the senior management are best equipped to lead the organisation successfully. However, further down the hierarchy Fielder’s contingency theory begins to hold much less relevance, it becomes impractical from a organisational perspective due to the number of people at this level of leadership. The logistics of matching the leader with their least preferred co-worker is impossible to consistently achieve, so a more continuum based approach is required.
Figure 1: Chelladurai’s Multi-Dimensional Model of Leadership (Miller and Cronin, 2012)

There are other contingency theories that provide a more continuum based approach such as Redding’s theory of leadership and management, however Fielder’s description of how situational factors affect the leadership style required for the situation is extremely useful in understanding the fundamentals of leadership (Pettinger, 2007). Chelladurai in his Multi Dimensional Model of Leadership, expands on much of Fiedler’s theory but in a continuum based approach, in which the leader can adapt their leadership style to fit the situation (Chelladurai and Madella, 2006). Chelladurai’s theory is taken from sports psychology but can be applied to an organisational scenario. It provides a much more empirical categorisation of task structure, clearly differentiating a plethora of situations that require certain leadership styles for success. Chealldurai found three characteristics that affect the leadership style required for a situation, called antecedents, they mainly expand upon Fiedler’s situational factors and leader – member relations and ultimately affect how a leader should behave towards a situation. The first are situational characteristics, the environment in which the leader must perform, the second are leader characteristics, the experience, personal qualities and skills of the leader, and the third are member characteristics, the motivation, skill and experience levels of group members (Chelladur

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