nissan 2005

NISSAN in France
Best in France Case Study
December 2004
Toshiaki Endo
Kamen Palatov
Sandeep Raghuwanshi
Shelagh West
Executive Overview
• About NISSAN
• NISSAN and
• Organisational
• NISSAN Europe
• Background data
• Impressions of
• Constraints
• Advantages
• Adapting to
• Essential Advice
• The world’s seventh
largest Japanese
• Sold over five-hundredthousand vehicles in
Europe in 2003, out of a
worldwide total of more
than three million
NISSAN and France
• Nissan signed a
strategic alliance with
Renault in 1999
• First alliance between a
Japanese and a French
• Primary purpose of the
alliance was survival in
the competitive
automobile industry
Organisational structure
North America
Other area
NISSAN Technical
Center Europe, Ltd.
Europe, Ltd.
Manufacturing Ltd.
Iberica, S.A.
• Regional headquarters of
NISSAN located in France
• Manages its European
operations and products
• Established in 1989 in
Netherlands and moved to
France in 2002 following its
alliance with Renault
• Employs 350 people at the
headquarters, including 40
Japanese representatives
Background data
• Nissan moved to France in order to improve
cooperation with its partner Renault
• The company sold 47,000 vehicles in France in
• Cars are mainly manufactured in the U.K. and
• Nissan is trying to increase sales not only in
France but also across Europe, utilising its
alliance with Renault
• However, the company is cautious about
expanding the number of employees in France
because of uncertain business circumstances
Impressions of France
• Although the French automobile market is
large, domestic companies are strong in
• Generally speaking, there are few reasons for
foreign manufacturers to locate their regional
headquarters in France
• Nissan executives think that they still have
room to improve the company’s relationship
with Renault, especially to reduce back office
Constraints - 1
• Arrogant administration
– It always takes lots of time for each procedure, compared to
the time required in other western countries.
– Moreover the procedures differ depending on who is in charge.
– Sometimes the results and duration differ depending on
whether executives have certain connections or not.
– Operations often slow down or even stop during vacation
• Strong labor unions
– The rights of workers are strongly protected. For instance, the
maximum number of working hours is limited to 35 by law for
non-professional employees. These constraints cause high
labor costs.
Constraints - 2
• Expensive hiring costs
– Tax and social security are expensive in France.
– Especially, the double-layer social security for Japanese
representatives is a serious constraint on expert exchange.
• (The French and Japanese governments agreed to solve
this problem last October)
• Vertically divided job system
– Each employee has his/her own specialty but does not tend
to share information and expertise.
– Thus people sometimes have to repeat procedures, which
may prevent jobs from running smoothly.
Constraints - 3
• Sense of time and services
– Generally speaking, people are less punctual than the
Japanese and Anglo-Saxons.
– Awareness of the importance of quality service is low. The
company has to train local employees or distributors about its
required standards.
• Language
– Compared to Benelux countries, fewer people can speak
• Easy to recruit candidates
– In addition to high educational standards, Nissan’s recognition
and brand image have improved recently in France, which
allows the company to hire talent easily.
• Employees work at their best
– Interviewees said they felt that even temporary employees
worked as hard as they could.
• High living standards
– There are many places for expatriate employees to visit in
France, especially in and around Paris. Employees can enjoy
high quality of life, as long as they do not feel burdened by
language constraints.
Adapting to France
• The company has tried to introduce a common
appraisal system worldwide
• Regarding the constraints mentioned before, it
has accepted the French way due to a lack of
• Since being affiliated with Renault, Nissan has
launched many measures to adapt to the French
way of business
– Personnel exchanges and the Alliance Business Way Program
Adaptation – example 1
A Charter, signed in July 1999, sets out
the principles of a shared ambition,
mutual trust, respect of each partner’s
identity, and balance between the two
partners of the Renault-Nissan Alliance,
completed by operating and
confidentiality rules.
“A spirit of cooperation, of
understanding and of mutual respect is
the basis of this Alliance which induces
a set of rules.”
“While preserving respective brands
and identities and ensuring profitable
growth for each partner, Renault and
Nissan seek to build a new culture
founded on trust, aiming at building a
bi-national group.”
“Thanks to complimentarily and
synergy opportunities, and despite
distance and differences between the
2 companies, Renault and Nissan
intend to develop a continuous cross
learning process in order to build
together value for both companies
and their employees, shareholders
and customers.”
Adaptation – example 2
The Alliance Charter also formalises a
guide to the “Spirit, Principles and
General Rules of Business Ethics”,
agreed to by both partners. It includes
the following :
1. Ambition and will to success must guide
both partners to build together value for
both companies and their stakeholders.
2. Promote and maintain at all times mutual
3. We should develop a common vision
based on truth and human respect.
4. Ensure balance between the 2 partners.
5. Keep confidential within the Alliance any
information or document relating more
particularly to studies, products,
industrial, financial, commercial data and
any industrial property rights or knowhow, exchanged or developed as a result
of the Alliance.
6. Be fair with third parties. The Charter
also sets out key conditions of success
that were widely communicated to all
contributors of the Alliance.
Adaptation – example 3
Since the beginning of the Alliance,
Renault and Nissan have been
committed to developing personnel
exchanges in order to increase Alliance
performance. These exchanges concern
approximately 350 employees (including
common organisations and can be
grouped into four categories:
The first category includes Renault and
Nissan expatriates who are employed by
the partner company during their
expatriation. Such exchanges help
reinforce the various functions through
the sharing of best practices as well as
encouraging mutual understanding. As
of November 1, 2003, 75 expatriates fall
into this category:
- 40 Renault employees are integrated
into Nissan in Japan and work mainly in
Ginza (Headquarters) and Atsugi
(Technical Center).
- 35 Nissan employees work at Renault,
either at the headquarters or at the R &D
facilities in Rueil and Guyancourt.
Fourteen other expatriates work in
Alliance projects such as development of
platforms, engines and transmissions,
A third category is made up of people
working in common companies (RNPO
and RNIS). Approximately 200 people fall
into this group.
Adaptation – example 4
Lastly, personnel exchanges within a
regional framework also exist. Thus,
25 Renault employees have been
assigned to European Nissan affiliates.
Nissan has also posted 30 employees
either to Renault Samsung Motors or
Renault Japan and the Asia-Pacific
region. These 350 people are not the
only ones directly making the Alliance
work. Several hundred people are
involved in Alliance bodies,
particularly Cross-Company Teams
(CCTs) and Functional Task Teams
(FTTs). These people remain
employed by their home company.
The Alliance Business Way Program
is a performance-oriented program in
three phases for Renault and Nissan
individuals and Renault-Nissan
Cross-cultural training consists of
attending a conference on Japanese
or French culture and a “Working with
Japanese/French Partners”session.
Over 1,400 people have been trained
in both companies.
Team-Working Seminars (TWS) for a
Renault-Nissan team focus on
individual and team efficiencies by
developing teams’ processes and
enhancing team communication.
Essential Advice
• First of all, though it has large market, France
is not necessarily a good place for the
European headquarters of an automobile
• The company should be prepared for
inefficient and non-cooperative administrative
bodies and expensive tax and social security.
• Strongly protected labor rights may also be a
serious issue.
• Regarding production, most automobile
companies consider locating in low cost
countries in eastern Europe instead of France.
We Thank
• Mr. Toshiya Yamaguchi
General Manager, Business Planning
Parc de Pissaloup, 13 avenue Jean d’Alembert B.P. 123, 78194 Trappes
Cedex France
• Mr. Tetsuya Tajima
Section Manager, Human Resources
Parc de Pissaloup, 13 avenue Jean d’Alembert B.P. 123, 78194 Trappes
Cedex France
Our Team
Kamen Palatov
Sandeep Raghuwanshi
Shelagh West
Toshiaki Endo
HEC MBA Program
HEC School of Management
1, rue de la Libération
78351 Jouy-en-Josas Cedex

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