Case Study: Nissan’s Revival Plan

Edwin Covert
11 min readMay 19, 2022


“Nissan Navara” by Karwik is licensed under CC BY-NC-ND 2.0.

The Greek philosopher Heraclitus stated that change is the only constant in the universe (Foster, 2020). In the nearly 2,700 years since Heraclitus lived, few things have shown themselves to be so true. Change is a constant part of an organization, particularly one that faces an uncertain future. This paper examines whether a significant change plan at a large automobile manufacturer was truly transformative or just a normal turnaround effort in the face of poor corporate performance. This paper will review the change plan and look at public short-term and long-term performance metrics in order to determine the nature of the proposed change.

Nissan Sought a Renewal

In 1999, Renault named Carlos Ghosn as the CEO of Nissan to turn around the fortunes of the Japanese car company (Ghosn, 2014). Ghosn developed and championed the Nissan Revival Plan (NRP). According to Visnick and Chrysler (1999), before Ghosn’s arrival, Nissan had been operating at a loss for the prior seven years. Specifically, they note, “years of mismanagement (how else can it be characterized?) and a well-intentioned but unrealistic focus on engineering regardless of cost had swept the business colossus that is Nissan to the brink of collapse” (Visnick & Chrysler, 1999, para. 5). This was Nissan’s triggering event and thus the impetus for its renewal.

At the end of June 1999, the Board of Directors appointed new executive leadership for the car conglomerate (Nissan, 1999). Six days later, a new management team was in place; Nissan (1999) released the NRP to the world three months later. Nissan clearly possessed a sense of urgency to change its fortunes. Urgency is the realization that something cannot exist as it currently does because it is inefficient, incorrect, legally dubious, etc. The sense of urgency (as Sittrop and Crosthwaite (2021) define it) drives a transformation (change) of a complex process (lots of moving parts) that management oversees.

As a major automotive company, Nissan was already a global conglomerate. While not directly applicable in this instance, research indicates the desire to become a global entity will force companies to launch change management plans (Spector, 2013). Nissan was actually fighting to maintain its global role.

Enter the NRP

The NRP contains several sections. First is the diagnosis of the problem based on past performance and analysis of opportunities lost (Nissan, 1999). The second part of the NRP includes the future state, where Nissan (1999) discusses key elements and the expected impact of the plan. The last section discusses commitments coming from the plan (Nissan, 1999). This last part is crucial. During times of organizational change, defined by Men et al. (2020) citing research from Agote et al. (2015) as “the process by which organizations move from their present state to some desired future state in order to foster the achievement of one or more organizational objectives’’ (p. 2), leaders must communicate a vision to employees, be passionate about the change they are fostering, and be mindful of how the proposed change will affect the staff.

The Role of Shared Diagnosis in the NRP

According to Spector (2013), shared diagnosis is a key component of any successful change management plan. Spector (2013) defines shared diagnosis as the effort to learn about “real, current, and unique dynamics impacting the organization’s performance” (p. 53). The NRP makes a significant effort in attempting to understand flaws in Nissan’s current approach (Nissan, 1999). The NRP notes, for example (Nissan, 1999)

  • a decrease of over 600,000 vehicles produced from 1988 to 1998
  • a decrease in domestic Japanese market share from 17.4% in 1988 to 13.3% in 1989

The NRP appears to be the work of many hands within the company. The document notes it received input from “200 people” globally (Nissan, 1999, p. 15). It claims to have assessed 2,000 individual ideas and reviewed 4,000 proposals submitted to the company’s Executive Committee (Nissan, 1999). These diagnostic efforts are critical to understanding the various sub-elements that compose an organization such as Nissan’s (Beer and Spector, 1993). After all, people will resist change if they don’t have agreement at the beginning (Spector, 2013).

What Type of Change Was The NRP?

It appears at first that Nissan (1999) created the NRP as a cost-saving turnaround process, not a transformation effort. According to Spector (2013), a turnaround effort “looks at a company’s assets and seeks to manage them in a new way in order to stabilize cash flows, shore up the balance sheet, and maximize shareholder wealth” (p. 5). Pearce and Robbins (2008) called turnarounds “business’ responses to declining performance and their post-turnaround performance improvement” but they note it is only one step in changing a company’s fortunes (p. 121). They explicitly state a necessary step is the strategic transformation (Pearce & Robbins, 2008). Mootee (2015) sums the distinction between the two ideas.

A turnaround involves a company that has fallen off the rails and has executed poorly and still competing in the same product/market space. It takes a tough driven executive to make it work. A transformation is truly a lot more difficult and takes a lot more deep wisdom, with execution playing a secondary role. The company must fundamentally change its mental and operating model. It is a reinvention and companies who are used to doing things their way find it difficult to start doing things differently. This is not a 3 or 6-month initiative. It’s very, very strategic, foresight driven and problematic. (paras. 5–6)

Spector (2013) identifies a third change model: tools and techniques. He defines it applying change management processes such as Total Quality Management, Balanced Scorecard, or Considered Design. The NRP does not mention any particular tools or processes such as these but it is possible the plan used these models in individual implementation efforts.

Nissan’s Turnaround Versus Transformation

The NRP does not strictly address transformative efforts for the company (Nissan, 1999). Rather, the NRP calls out explicitly that Nissan’s (1999) earnings performance was negative in several years; this statement is about performance of the company. The NRP lists several reasons for its prior performance problems: a lack of orientation around generating profit; a lack of customer focus; not enough cross-functional or cross-border teams; no sense of urgency at the company; and no shared vision of the future (Nissan, 1999). The focus on shareholder value is clear in the NRP.

The NRP calls out several actions around the goal of creating profitable growth. It first discusses new product opportunities (Nissan, 1999). In its 2001 Annual Report, Nissan (2001) notes that, while global sales were down slightly (based on a decline in Japan and the United States), operating profits 68.5% over the prior year. In fact, Nissan met all the commitments the company made in the NRP early: net profitability increased, sales margins improved, and debt reduction occurred (Nissan, 2001).

Changing employee behavior patterns with an eye toward improving the long-term success of the company does not seem to factor into the overall themes of the NRP. It appears Ghosn developed the NRP within the structure of what Klempin and Karp (2017) call a situation that “involves technical problems with known solutions” (p. 85) rather than a true change management plan looking to change behavior. However, by reviewing the results in Nissan’s (2001) Annual Report, one can see the NRP was a great initial success.

Motivating Nissan’s Workforce

As noted previously, a significant aspect of transformation is changing behaviors; this requires incentives or rewards. After all, Nissan’s employees do not perform their job for solely altruistic reasons. Instead, they expect something for their efforts. According to Spector (2013), two types of rewards exist: extrinsic and intrinsic. Malek et al. (2020) note that organizations use both financial and non-financial rewards as ways of motivating employees.

Extrinsic Rewards

Spector (2013) says “[m]oney is the most obvious and prevalent example of an extrinsic reward” (p. 142). However, there are other forms of extrinsic, or externally derived, rewards, i.e. rewards that are given to an individual from a source outside of themselves. Extrinsic rewards are not always financial. Table 1 lists some examples of extrinsic rewards.

Table 1

Examples of both financial and non-financial extrinsic rewards

Note: Adapted from “Job Satisfaction in the Hospitality Industry: The Comparative Impacts of Work-Life Balance, Intrinsic Rewards, Extrinsic Rewards, and Work Relations” by M. S. Andrade, D. Miller, and J. H. Westover, 2021. Copyright 2021 by North American Business Press.

Intrinsic Rewards

Malek et al. (2020) state, “[a] task is intrinsically motivating if it provides its own inherent reward — because it is interesting or pleasant, for example” (p. 530). Here, the reward comes from an internal source: the feelings of the individual. These rewards, or motivations, are the thoughts people have about how they derive meaning from their work. Table 2 provides examples of intrinsic rewards or motivations.

Table 2

Examples of intrinsic rewards or motivations

Note: Adapted from “Job Satisfaction in the Hospitality Industry: The Comparative Impacts of Work-Life Balance, Intrinsic Rewards, Extrinsic Rewards, and Work Relations” by M. S. Andrade, D. Miller, and J. H. Westover, 2021. Copyright 2021 by North American Business Press.

Rewards in the NRP

The NRP does not spend a lot of time discussing what its reward plan would look like moving forward (Nissan, 1999). In fact, it discusses several negative aspects that will happen in the plan. For example, the plan calls for a centralization of parts and material purchasing, a reduction of “vehicle assembly and powertrain manufacturing capacity,” and plant closures across Japan (Nissan, 1999, p. 25). Each of these would lead to job losses and thus negatively impact both extrinsic and intrinsic rewards for employees. In their Annual Report, Nissan (2001) reports an 11 percent decrease in their workforce from 1999 to 2001.

However, Nissan (2001) specifically notes the NRP energized the remaining employees: “The first steps have already been realized, in employees with increased ambition and drive for the future, and customers responding with enthusiasm to Nissan products that provide a more satisfying, safe and intelligent driving experience” (p. 11). Therefore, one must conclude Nissan improved its intrinsic motivations in some fashion, as defined by Andrade et al. (2021) in Table 2 above. Unfortunately, Nissan does not release results of internal employee surveys, but these would provide insight into how employees felt about the NRP when Nissan launched it.

Long-term Effects of the NRP

It is clear from its 2001 Annual Report the NRP was an initial success for Nissan (2001). However, in the two decades following its implementation, the company’s fortunes have slid. According to an analysis by the Wall Street Journal (2022), Nissan lost money in both 2020 and 2021 ($671,216 and $448,697, respectively). Figure 1 compares Nissan with two other Japanese automobile companies: Toyota and Honda.

In Figure 1, both Toyota (blue line) and Honda (gold line) have witnessed substantial stock price growth compared to Nissan (black line), particularly since the end of the last decade. Another metric is the overall stock price of a company. On October 29, 1999, Nissan’s stock price was $11.94 per share; on May 13, 2022, the stock closed at $7.67 per share (Google Finance, 2022). This is a nearly 36% loss of value for shareholders from the start of the NRP until May 2022.

Figure 1

Comparison of Nissan, Toyota, and Honda stock prices since the NRP implementation

Note: Adapted from “Nissan Motor Co. Ltd.. ADR annual income statement” by Wall Street Journal, 2022. Copyright 2022 by Dow Jones and Company.

Over a twenty-year period, many factors come into play in any organization. Therefore, it is difficult to determine whether a turnaround-based change plan implemented in 1999 would still have a significant impact on that organization two decades later, with the September 11 attacks in the United States, the 2008 financial crisis, and the COVID-19 pandemic occurring during the intervening years among other global events. While Nissan (2001) clearly felt the NRP was changing the future of the company based on their 2001 Annual Report, Spector (2013) says that turnaround-based change plans do not have the lasting effects of transformative change plans. Spector (2013) feels true transformation requires turnaround, updated process and management (tools and techniques), and behavioral changes working in concert. Nissan’s lackluster economic results since the advent of the NRP is evidence his thinking is correct.

A Side Note: Ghosn’s Arrest

In 2018, the Japanese Government arrested Ghosn and charged him with violating Japanese laws about salary disclosure; he then fled the country for his childhood home in Lebanon before his trial began by hiding from authorities in an equipment box that accomplices sent through Turkey (Aronczyk & Nickisch, 2021). Japanese authorities later arrested several accomplices for helping him get out of the country illegally (Welna, 2020). Reuters (2022) reports Japan charged one accomplice, with embezzling over $11 million. The case is ongoing.


Nissan created a turnaround change plan to address performance issues. Unfortunately, it did not do enough via the NRP to implement lasting change in the company. From the two decades between NRP implementation to today, relative to its competitors, Nissan is not performing well. Its stock price over this period is lower than when the company first executed the NRP. To properly change an organization over the long-term, a transformative approach is required that focuses not just one making better use of its assets but also focuses on changing long-term behavior throughout the company. Turnaround efforts, such as Nissan’s NRP, are simply insufficient.


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Edwin Covert

Cybersecurity, guitar, jazz, bourbon, rye, enterprise security architecture, current trophy husband. CISSP-ISSAP, CISM, CRISC, SCF, PMP at