What mbo concept did ghosn apply?

Answer 1

Ghosn had adopted five step MBO process. As the principle behind MBO concept is to create empowered employees, who have the clarity of the roles and responsibilties expected from them, understand their objectives to be achieved and thus help in the achievement of organization as well as personal goals. Clarity of goals with MBO concept of smart goals were:

• Specific
• Measurable
• Achievable
• Realistic and
• Time Bound

To create the sense of urgency necessary to initiate change, Ghosn announced to his employees the 'Nissan Revival Plan'. The plan consisted of three quantifiable goals:

Return to profitability for the fiscal year 2000.

Achieve a consolidated operating profit of 4.5 per cent of sales by the fiscal year 2002.

Reduce net debt from ¥1.4 trillion to less than ¥700 billion by the fiscal year 2002.

To underline his commitment, Ghosn publicly announced that if any one of these three goals was not achieved, he and the whole top management would resign. This statement put not only himself but also the whole top management team under pressure to achieve the goals. Besides this symbolic statement, Ghosn also demanded accountability on a day-to-day basis from all managers, based on the practice of management by objectives.