Corporate Life Savers

8/6/2019 Corporate Life Savers

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CORPORATE LIFE SAVERS

A STUDY ON TURNAROUND

LEADERS


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INTRODUCTION

The dawn of a leader is required more at hell

than at heaven.

When corporations show downturn, it is theleaders who turnaround them into successful

establishments.

The main purpose of this paper is to analyze

successful turnaround leadership cases, and to

understand the strategies of turnaround

leaders.


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OBJECTIVES

To analyze successful turnaround leadership

cases; and

To understand the strategies of turnaround

leaders.


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METHODLOGY

The study was based on secondary data.

The turnaround cases were collected throughInternet, journals and magazines.

Several turnaround cases have been examined

and from them the most successful fiveturnaround cases have been analyzed in thispaper.


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The cases are taken from different industriessuch as computer industry, airplanemanufacturing industry, automobile industry,

media and FMCG industry; and from differentcountries such as US, Japan, Brazil and UK.

From the strategies adopted by the turnaroundleaders a generalized Turnaround Philosophyhas been presented in this paper.


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SCOPE OF THE STUDY

Turnaround of IBM by Louis V. Gerstner

Turnaround of Nissan by Carlos Ghosn

Turnaround of Embraer by Mauricio Botelho

Turnaround of Gillette by Jim Kilts, and

Turnaround of BBC by Greg Dyke


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LOUIS V. GERSTNER (IBM)

In 1993, IBM was in deepfinancial trouble. The company

reported a net loss of $ 8.1

billion. Many analysts wrote off

IBM was dead. At this time,

Louis V. Gerstner (The life

saver of IBM) became its CEO.

During the year 2001, IBM

reported a net income of $ 7.7billion. During the period of

Gerstner (1993-2001), the

share price of IBM shot up by

nearly 800%.


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CARLOS GHOSN (NISSAN)

When Carlos Ghosn became theCOO of Nissan it was on the verge

of suspending its payments and it

had accumulated losses of $

20billion.

Because of Ghosn, Nissan became

the most profitable auto company

in the world over the course of the

past six years. During the threemost recent fiscal years, Nissan

has managed to increase its sales

by 27% and it recorded a profit of

3.76 billion Euros.


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MAVRICIO BOTELHO (EMBRAER)

In September 1995, Botelho joined

Embraer as the CEO. When he arrived,

Embraer, an aircraft manufacturing

company from Brazil, has $ 330

million in annual losses.

The recovery of Embraer never would

have happened without Botelhos

decision to pursue the growing market

for regional jets. It is the leadership ofBotelho, which makes Embraer as the

fourth largest aircraft manufacturing

company in the world.


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JIM KILTS (GILLETTE)

By the beginning of 2001, therewere lack of coordination among

the executives in Gillette and

respect among peers also declined.

Profit was in decreasing trend and

the company continuously losing its

market share.

At this time Jim Kilts became the

CEO of Gillette. Through his style ofleadership he introduced dramatic

changes into the organization and

made Gillette a profitable

organization.


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FINDINGS

From the above cases, the turnaround strategies

followed by great corporate leaders can be

understood.

Every one of them has their own style of leadershipand their working style and analytical ability was also

quite different.

But all of them operate on a common philosophy the

philosophy of how to turnaround an organization into a

successful one.


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They have a clear understanding of the current

position of the organization

They take a fresh look at the problems

They encourage ideas from the bottom of theorganization


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The turnaround leaders are much efficient inidentifying the potential opportunities available for

the company

They have firm conviction. They know what theyare doing and are not bother about criticisms

They havestrong vision and also have the ability toconvert their visions into reality


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CONCLUSION

Through these cases we learned the significant role ofleaders in corporate turnaround. They have shown thatnewly elected CEOs are much efficient in turnaroundmanagement than existing ones.

However, it will be wrong to presume that when anorganization needs restructuring, there is a need for anew CEO.

But what should be understood from these cases is that,when an organization faces continuous failures, those atthe top should look the problem from a freshperspective.

They should make a through study of the wholeorganization and should encourage views from thebottom of the organization.


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BIBLIOGRAPHY

Books:

Organizational behaviour by Stephen P. Robbins. Ninth Edition.Pearson Education. (P.N. 538-562)

Human Behaviour at work by Keith Davis & John W. Newstrom.McGraw-HILL INTTERNATION EDITIONS. (P.N. 293-300)

Journal

Rosabeth Moss Kanter Leadership and the Psychology ofTurnarounds, Harvard Business Review. June 2003. P.N 59-67.


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Net sources

http://www.icmrindia.org/casestudies/

www.wfpma.com/PDFs/hrglobalchallenges.pdf

http://www.managementtoday.co.uk

http://www.allbusiness.com


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