Nissan Motors Entering the International Market

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Table of Contents

Theories of Leadership: Critical Review
Human Resources: Key Challenges
Recruitment Strategies
Summary and Recommendations
Reference List

Theories of Leadership: Critical Review

Trait Theory

The first assessed approach is the trait theory (TT) of leadership. TT focuses on assuming that personal attributes and skills are leadership markers (GuramatunhuCooper, 2017). Past meta-analyses associate traits like intelligence, self-confidence, determination, integrity, and sociability with leadership (Dan, 2019). However, the TT has not been adequately supported due to its leader-centric nature, dependence on only a few leader attributes, and unresponsiveness to changing situations (GuramatunhuCooper, 2017). TT’s limitations are rooted in a presumption of universal traits, which ushers a failure to note cultural and gender variations (GuramatunhuCooper, 2017; Jheid, 2021). As more complex notions of leadership emerge, TT as a stand-alone approach lost relevance today. The problem of identifying universal leadership traits increases when research is conducted in culturally complex multinational settings (Jneid, 2021). Although the TT approach can be used for planning ideal manager profiles, it is recommended that Nissan Motors (NM) incorporate it with a contingency theory.

Contingency Theory

Based on the observations above, a suitable approach for NM is the contingency leadership model. A contingency model argues that a leader’s competence depends on adapting to different contexts and situations (Abba et al., 2018). Contingent leadership provides a more realistic outlook, recognizing that leaders must consider the environment and characteristics of clientele to achieve optimal results (Williams et al., 2017). The strengths of contingency theory (CT) include sufficient research support, flexibility, and the ability to predict an effective type of leadership (Williams et al., 2017). Therefore, applying CT implies that prescriptions and procedures no longer exist to facilitate decision-making in every situation, which allows for higher adaptability to the international market.

Furthermore, high levels of distributed leadership and responsibility require that innovation, creativity, and individual initiative are upheld over notions of ‘right’ behavior. If NM were to develop leadership profiles, the obtained data about individual leader styles could then be used. However, it is important to consider that the theory does not explain the advantage of particular leadership styles in certain situations. Additionally, CT does not show organizations how to act when there is a mismatch between the leader and the workplace situation, which NM should be cautious about, moving into the international scene.

Human Resources: Key Challenges

Economic Crisis

The financial crises of the 2000s were an example of widespread effects on employment, including company restructuring, layoffs, wage cuts, and high unemployment. An economic crisis is not preventable at the single-firm level (Farndale et al., 2019). Therefore, the first challenge for international human resource management (IHRM) would be uncertainty and the pressure to adjust to changes in the economy given no existing standard procedures. Furthermore, a crisis leads to a decline in the demand for labor as consumers spend less on products and services (Farndale et al., 2019). As a result, IHRM systems unable to adapt to this flexibility in demand may face a labor surplus and layoffs.

Political Crisis

Welcoming international personnel to the company may seem easier during the globalization era. Today, however, nations trend toward more nationalistic policies, characterized by less porous borders, higher trade barriers, and more aggressive political rhetoric regarding the diplomacy costs and nations’ cooperative action (Farndale et al., 2019). Consequently, highly skilled people are increasingly hesitant to move across national borders, which may mean losing NM’s competitive advantage due to slowed growth and innovation (Farndale et al., 2019). Therefore, NM managers must be aware of the increasing political tensions as they engage with the international workforce.

Social Crisis

Geographically permeable labor markets have become an important feature of global migration. Therefore, the lack of professional opportunities, poverty, and political instability in many developing economies have made international migrants a significant group in the global workforce (Farndale et al., 2019). However, the IHRM research presents limited knowledge of migrants’ skill sets (Farndale et al., 2019). Thus, a lack of IHRM strategies for using and managing these skill sets and knowledge to build a competitive advantage is another challenge for NM’s entry into the international environment.

Recruitment Strategies

The traditional IHRM approaches to recruiting are becoming obsolete in the emerging trends and market requirements. Jneid (2021) found that there is no universal set of competencies for global leadership. In this context, talent management is the recommended international recruitment strategy for NM, the central objective being to find the right person at the right moment for the position (Jheid, 2021). Therefore, IHRM must develop customized recruitment strategies for finding such employees. Another one of the well-known strategy in the international recruitment world is language-sensitive recruitment. Peltokorpi (2017) suggests that MNCs invest in language-oriented recruitment to enhance knowledge transfer. An enhanced knowledge transfer, in turn, increases companies’ absorptive capacity. Therefore, to aggressively improve and pursue desirable candidates, a flexible and language-oriented approach is required.

Cultural Challenges

A very important cultural challenge lies in international migrant workers’ willingness and ability to integrate into the new society. This aspect is currently understudied and may differ significantly by country (Farndale et al., 2019). Thus, the HR department must be willing to discuss individual reservations and expectations of desired workers beyond the standard employment-related questions. Furthermore, an undeniable aspect of culture is language and, as follows, the linguistic barriers. When using language-oriented IHRM, NM recruiters must note potential misalignments between language and functional competencies (Peltokorpi, 2017). Such misalignment is especially prevalent in countries with a limited supply of highly competent workers proficient in the corporate language (Peltokorpi, 2017). The NM management can deal with the challenges of language-sensitive recruitment by using established interview techniques and selection committees composed of local and highly qualified employees.

Summary and Recommendations

The key conclusion and recommendation for international expansion is avoiding universal, template-like approaches to leadership strategies, recruitment, or addressing challenges. The importance of trait and contingency theories of leadership, particularly in a multinational environment fraught with behavioral complexity, was critically evaluated in the company’s expansion. The recommendation for the IHRM would be to adhere to the contingency theory of leadership more than in a domestic context, given the lack of leadership qualities equally applicable in all countries. Although core competencies may be universal, leaders’ supporting behaviors should be culturally contingent. Specific behaviors, for instance, grasping initiatives with energy and drive, should be avoided since they are unlikely to transfer easily across cultures.

Furthermore, there are several issues that Nissan Motors IHRM may face upon moving to an international arena: an unstable economic environment, political tensions between nations, and uneven skillsets of the migrant workforce. In such a context, the competitive advantage of NM will be based on its ability to transfer knowledge effectively through its intra-organizational networks. Therefore, a case-based recruitment methodology and language-oriented approach are the recommended strategies for successful expansion. Unlike in a domestic context, IHRM must be aware of potential challenges with cultural integration and hiring people of sufficient linguistic proficiency.

Integration of these practices will assist Nissan Motors in ensuring a degree of flexibility that is much needed in the international context. The leaders in the company will have to be responsive to new environments and be willing to act independently beyond strict protocols. Furthermore, the need to be culturally and linguistically oriented will result in a profound shift in the HR staff composition. The inclusion of local staff will be a paramount change the company must undergo to truly become a multinational corporation.

Reference List

Abba, M., Yahaya, L. and Suleiman, N. (2018) ‘Explored and critique of contingency theory for management accounting research, 4(5), p. 12.

Dan, H. (2019) ‘The Analysis of LG and Haier with Trait Theory and Leadership Style Theory’, The Frontiers of Society, Science and Technology, 1(3).

Farndale, E. et al. (2019) ‘Facing complexity, crisis, and risk: Opportunities and challenges in international human resource management, Thunderbird International Business Review, 61(3), pp. 465–470.

GuramatunhuCooper, N.M. (2017) ‘Theory leadership from Africa: examples of trait theory, in Global and Culturally Diverse Leaders and Leadership. Emerald Publishing Limited (Building Leadership Bridges), pp. 3–19.

Jneid, C. (2021) ‘Evolution and decline of MNCs from a leadership-quality perspective – MNCs from the Brazilian market’, Management Decision, 59(1), pp. 118–133. Web.

Peltokorpi, V. (2017) ‘Absorptive capacity in foreign subsidiaries: The effects of language-sensitive recruitment, language training, and interunit knowledge transfer’, International Business Review, 26(1), pp. 119–129.

Williams, P., Ashill, N. and Naumann, E. (2017) ‘Toward a contingency theory of CRM adoption’, Journal of Strategic Marketing, 25(5–6), pp. 454–474.

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