NISSAN AND UK BREXIT

INTRODUCTION:

  This blog is specifically about change management and how the change is implemented. The blog discusses about the an automobile manufacturing company named Nissan, it also talks about the problems faced in manufacturing sector from the finalization of Brexit deal and what changes could be made to overcome problems from Brexit in the manufacturing sector.

I have been hearing about increase in the problems from Brexit in the UK and the blog explains in brief regarding the impacts of Brexit.

CHANGE MANAGEMENT:

  Confrontation to change is a natural phenomenon, it is important to manage change in a structured and controlled approach in order to benefit business cases in an organization. Change management is also a term that can be discussed freely in the organization or a country. It is often used as catch-all for project activities: “When we implement that new process, lets not forget about the change management” (Mindtools.com, 2019).

Change management is structured approach to make the organization move from lower level to higher level in the future (Apm.org.uk, 2019). There are very few organizations, which manage to achieve success. It is believed that the reason behind poor success rate of change initiative is lacking in the implementation and management in the organizational activities (Hossan, 2015).

WHAT IS BREXIT:

  The voters of United Kingdom (UK) made the decision on 23 June 2016 to leave the European Union (EU), caused an earthquake in many ways in the country (Wincott, Peterson and Convery, 2017). When the outcome was analyzed from the votes, everyone in the UK was shocked and surprised as if they have woken up in a different country. In 2016 around 52% of voters voted to leave EU and a decision was made in 2017, which summoned Article 50 of the Treaty on the European Union to withdraw from EU and it was referred as “Brexit” (Moschieri and Blake, 2019). Brexit was supposed to take place in 2019 and now it has been extended until January 2020.

NISSAN AUTOMOBILE AND IMPACTS:

  Brexit will have a huge significant impact on British firms operating in Europe and other multinational firms operating in UK. It will change the strategies and organizational structure of the businesses from head to toe and a totally different environment will be created in UK and EU.

  One of the most famous automobile companies Nissan in Europe has to face a lot of consequences, if Brexit deal is finalized. Nissan is the company, which was born in Japan and raised in Europe and it has 2401 outlets in Europe (Nissan.co.uk, 2019). According to Nissan, they sold around 5.8 million vehicles in 2017 and they have a work force of 247 500 employees in total (Nissan.co.uk, 2019). Recently in 2018, Nissan sold the first electric vehicle Nissan Leaf in the Europe and it was the top selling vehicle. This vehicle was analyzed as the low running cost and zero-emission driving for second generation (Nissan.co.uk, 2019).

Image 1.1 (Nissan.co.uk, 2019)                                          Image 1.2 (Nissan.co.uk, 2019)

  According to BBC UK the European Chairman of Nissan, Gianluca de Ficchy, said that no-deal Brexit could make his business model unsustainable (Bbcnews.co.uk, 2019). He further said that if UK leaves EU than there will be a 10% export tariff on his company, which will put them in the great loss and he could not make a future beneficial decision for Nissan’s 16000 employees in UK (Independent.co.uk, 2019). Nissan has its plant in Sunderland, where they will be working on Nissan Juke’s model soon and also the Japanese firm confirmed that they had invested around £100m in the plant. They look forward to make it UK’s biggest car plant in Sunderland but since the Brexit has been announced so it has become difficult for the company to make future plans (Nissan.co.uk, 2019).

Solution for Nissan:

  A change management theory should be applied to overcome Brexit that can be Lewin’s model of change, which states unfreezing, changing and freezing (Yukl, 2013). Nissan should change their strategy to overcome Brexit problems and it can be possible by increasing the prices of vehicles. If Brexit deal is finalized than there will be 10% export tariffs imposed on the company which, means the company, can increase the prices of vehicles in a way to cover the tariffs. This could also increase the amount of profit, as increase prices on vehicles will generate greater revenue, which can easily overcome the tariff and increase profit. However it is estimated that Lewin’s model of change unfreezing, changing and freezing can benefit Nissan automobile to survive in Brexit.

Figure 1.1 (Mulder, 2019)

LEARNING OUTCOMES:

  It is understood that Brexit will have a great impact on Nissan and business will be reduced. There will be problems and hurdles for Nissan in starting if Brexit deal is finalized, but as explained above in light of Lewin’s change management model. The company should increase the prices to overcome tariffs on export and since the company is afraid of great loss from the tariffs than this strategy would release their stress as anyways after the Brexit prices would rise whether its luxury use or basic need.

Figure 1.2 (Buehring, 2019)

CONCLUSION:

  In conclusion, change management is important for every business around the globe because every time scenarios are not same. If Brexit happens than Nissan automobile should take precautions earlier on time in order to overcome the loss situation. However the leaders and managers have huge tasks to deliver within the organization to produce effective outcomes and to bring this in action they need implementation of change on right time.

REFERENCES

• These Are The Companies Cutting UK Jobs And Leaving The UK Ahead Of Brexit (2019) available from <https://www.independent.co.uk/news/business/news/brexit-companies-leaving-uk-list-job-cuts-eu-no-deal-customs-union-a8792296.html&gt; [29 November 2019]

• Nissan Europe ‘Unsustainable’ In No-Deal Brexit (2019) available from <https://www.bbc.co.uk/news/business-50000530&gt; [29 November 2019]

• NISSAN CORPORATE SALES EUROPE (2019) available from <https://www.nissan.co.uk/eu-fleet-nissan-europe.html&gt; [29 November 2019]

• Change Management: Making Organization Change Happen Effectively (2019) available from <https://www.mindtools.com/pages/article/newPPM_87.htm&gt; [29 November 2019]

• Hossan, C. (2015) “Applicability Of Lewin’S Change Management Theory In Australian Local Government”. International Journal Of Business And Management 10 (6)

• Moschieri, C. and Blake, D. (2019) “The Organizational Implications Of Brexit”. Journal Of Organization Design 8 (1)

• Wincott, D., Peterson, J. and Convery, A. (2017) “Introduction: Studying Brexit’S Causes And Consequences”. The British Journal Of Politics And International Relations 19 (3), 429-433

• Apm.org.uk. (2019). What is change management? | APM.

Available at: https://www.apm.org.uk/body-of-knowledge/delivery/scope-management/change-management/ [Accessed 26 Nov. 2019].

• Mulder, P. (2019) Lewin’s Change Model, Discover New Behavior Change Theory | Toolshero [online] available from <https://www.toolshero.com/change-management/lewin-change-model/&gt; [30 November 2019]

• Yukl, G. (2013) Leadership In Organizations. New Jersey: Prentice-Hall

• Buehring, S. (2019) Change Management Jobs [online] available from <https://www.knowledgetrain.co.uk/change-management/jobs-available-change-management&gt; [30 November 2019]