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Business & Finance Series: Expert Comment

Downfall of Nissan boss Carlos Ghosn

Cass expert Professor Andre Spicer says it is a classic case of executive hubris

by Amy Ripley (Senior Communications Officer)

Nissan has moved to force out its long-serving boss Carlos Ghosn after accusing him of misleading investors and misusing company assets for personal gain.  Professor Andre Spicer comments on the case.

“The fall of the auto-executive Carlos Ghosn is a classic case of executive hubris.  Since being credited with turning around Nissan, Ghosn has become seen as a corporate Demi-god.  He is featured in business books and has been the subject of case studies used to teach managers in training. In additional he has become increasingly powerful in Nissan, Renault and Mitsubishi.  All this has fuelled a sense he has almost super human abilities. When this happens, leaders start to think the normal rules don’t apply to them. Ghosn clearly thought that Japanese laws shouldn’t hem in his remuneration package.

“Ghosn may have been also suffering from envy. His own official pack package of about £13.3 million looks relatively modest when compared to other celebrity CEOs. We know that people tend to think about their pay in relative rather than absolute terms. They compare their own pay with others who they see as their peers. This means they often lose sight of how their pay compares to the average worker.

“Ghosn’s departure could be an existential threat for all three companies. Ghosn had built a complex alliance between three auto-makers. The alliance has been the centrepiece of the car maker’s strategy. However, the only thing holding it together was Ghosn.  With him out of the picture, old differences between the companies could come to fore.  The alliance could fall apart.  This would have profound implications for the direction of each company - particularly in an industry which is undergoing a series of significant disruptive changes.”

Quotes can be attributed to Professor Andre Spicer, Professor of Organisational Behaviour, Cass Business School.

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