The Entrepreneurship Prospects of Tesla

Running head: CORPORATE ENTREPRENEURSHIP
Corporate entrepreneurship
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Executive summary
The aim of this report is to discuss about the entrepreneurial prospects of Tesla. In doing so, this
report have considered a number of factors including the corporate environment, human
resources, corporate strategy, organizational culture, and company structure. Determination of
these factors helped in identifying the similarities and differences between the entrepreneurial
venture and the business operation of Tesla. It is identified in this report that majority of the
elements of the business of Tesla are getting matched with that of the characteristics of
entrepreneurial venture. On the other hand, this report also discussed about the market
orientations of Tesla in their business operation and it is identified that Tesla is having high level
of market orientation, which is further helping them in focusing on customer oriented products.
The resource allocation process of Tesla is also analyzed in this report. In addition, the existing
organizational structure and culture of Tesla and the extent to which they are effective are being
analyzed. It is identified that the top two designations of Tesla including their CEO Elon Musk
are the top innovations of the company. The major reasons behind this are discussed in this
report. There are few challenges being faced by Tesla identified in this report and a few
recommended steps are discussed accordingly.

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Table of Contents
1.0 Introduction................................................................................................................................3
2.0 Identification of the innovative nature of Tesla.........................................................................4
3.0 Identification of the risk taking nature of Tesla.........................................................................5
4.0 Identification of proactive nature of Tesla.............................................................................5
5.0 Identification of entrepreneurship intensity of Tesla.................................................................6
6.0 Innovation goals of Tesla...........................................................................................................7
7.0 Market orientation of Tesla.......................................................................................................8
8.0 Evaluation of allocation of resources........................................................................................9
8.1 Identification of the critical resources...................................................................................9
9.0 Identification of strategic resources.........................................................................................10
10.0 Entrepreneurial personality traits...........................................................................................11
11.0 Identification of management style.......................................................................................11
12.0 Structure of Tesla...................................................................................................................12
13.1 Effect on entrepreneurship.....................................................................................................13
13.2Organizational structure role in promoting innovation..........................................................13
14.0 Functional areas in creating new products, services & processes.........................................13
15.0 Evaluation of organizational control system (tight or loose).................................................14
15.1 “slack” to support entrepreneurial initiative..........................................................................14
15.2 Examples of controls that support or hinder entrepreneurship..............................................14

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16.0 Critique of employee evaluation and rewards system...........................................................15
16.1 Role of Appraisal and reward systems in encouraging entrepreneurial behaviour...............16
16.2 Awards provided by Tesla to their employees......................................................................16
17.0 Examine the hiring practices of the firm from an entrepreneurial perspective.....................16
18.0 Open communication in Tesla. Can anybody communicate with anybody? How
efficiently?.....................................................................................................................................17
19.0 Organizational culture of Tesla and key values.....................................................................17
20.1 Reinforcement and evaluation of organizational culture and its role in entrepreneurship....19
21.0 Bureaucracy of Tesla in terms of policies and procedures, approval cycles, and speed in
decision-making.............................................................................................................................19
22.0 People feelings about change.................................................................................................20
3.0 Tolerance of failure and ways..................................................................................................20
23.1 Learning from failures.......................................................................................................20
24.0 Sense of urgency in Tesla......................................................................................................21
24.1 Ways of reinforcing urgency.............................................................................................21
25.0 Most and Least entrepreneurial department in Tesla.............................................................22
26.0 Innovative champions of Tesla..............................................................................................22
27.0 Entrepreneurial thing of Tesla...............................................................................................24
28.0 Major problem areas of Tesla................................................................................................25
29.0 Conclusion.............................................................................................................................26

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30.0 Reference...............................................................................................................................27

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1.0 Introduction
Entrepreneurship is one of the major factors being considered by the contemporary
business organizations in their business operation. This is due to the reason that in the current
time, elements of the entrepreneurship helps the business organizations in gaining competitive
advantages. In addition, in the current business scenario, innovation is being given the maximum
preferences and concentration. These can be achieved by initiating the entrepreneurship approach
in the business operation (Mcluskie 2017). However, on the other hand, it is also to be
considered that there are number of determining factors being present, which are having
influence on the effectiveness of entrepreneurship. Thus, it is important for the business
organizations to have the idea about these factors and how to deal with it. Some of these factors
are corporate strategy, performance, human resources and external business environments.
Effective management of these factors will ensure that business organizations are having
entrepreneurship approach in place (Galindo and Mendez 2014).
In the recent time, Tesla positioned itself as one of the leading firms initiating disruptive
technologies in the market. They are known for their unique and innovative approaches in the
industry and disrupted the entire global automobile market (Tesla.com 2018). In addition, they
also solidified the fact that any new entrepreneurship ventures can succeed in the highly
competitive market just with the help of innovative approaches. However, in order to analyze the
entrepreneurship approach of Tesla, it is important to determine the internal management factors
and how they are coordinating and contributing in the organizational success.
This report will discuss about the different internal factors of Tesla, which are helping
them in their entrepreneurship venture. In addition, this report will also discuss about the

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organizational culture, management style and human resource strategies of Tesla in more
specific manner. On the other hand, this report will try to identify the major negative factors in
the internal management of Tesla and will recommend a few steps that will further help them in
enhancing their business potentiality.
2.0 Identification of the innovative nature of Tesla
The entrepreneurship approach of Tesla can be considered as innovative due to the reason
that the entire business process of them is based on innovation. One of the prime examples of
their innovation is in the form of their product strategy. This is due to the reason that the
products being introduced by them in their initial stage are one of the kinds. The first vehicular
product for Tesla is Model S, which is a pure electric car having the capacity of high
performance and long range. This can be termed as innovative due to the reason that Model S
was first launched in 2012 when the electric mobility had not gained exposure in the market
(Christensen, Raynor and McDonald 2015). In addition, the technology being used by them
including the floor mounted battery and autopilot feature are innovative in nature. On the other
hand, it is also reported that Tesla is innovative in terms of their managerial scope also. This is
due to the reason that employees of Tesla are being considered as shareholder and owner of the
company rather than just being a salaried people. This is innovative due to the reason that this
approach is one of the kinds in the industry.
In terms of generation of revenue and business model also, innovation is quite evident in
the process of Tesla. This is due to the reason that unlike the major large organizations, Tesla
initiated their businesses without being a public organization and they have taken a funnel
approach in accumulating fund for their future sustainability. According to their business model,

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model S and model X were first launched by Tesla in the market, which commands high sticker
price and they are targeted to the upper section of the customers. Hence, commanding an extra
price for the innovative and one of the kind products helped Tesla in having more profitability
per unit (Schulze, Paul MacDuffie and Taube 2015). This extra fund was used by them for
developing more mass market cars such as model 3. Thus, they gained extra fund from their
niche products and introduced mass market and affordable products for increasing the sales
volume in the further stage. This approach of Tesla can also be considered as innovative and
unique over the existing business models being followed by other automakers.
3.0 Identification of the risk taking nature of Tesla
Apart from their innovative nature, risk taking nature is also relevant in the business
process of Tesla. This is due to the reason that the practices being followed by them are all
involved risks. One of their most risk taking approaches is introduction of the electric vehicles.
This can be termed as risk taking approach due to the reason that prior to the introduction of
model S by Tesla, there are number of electric vehicles being introduced by other automakers in
the market, which were not successful (Hardman, Shiu and Steinberger-Wickens 2015). Thus,
Tesla played a gamble in introducing the pure electric vehicles and entirely designed their
organizational approach over the electric vehicles. Another risk taking approach of Tesla is
targeting the niche market by offering high end electric vehicles. Prior to these, a number of
electric vehicles are offered for different customer segments. Thus, initiating electric vehicles in
the higher customer segments is one of the most risk taking approaches of Tesla.
4.0 Identification of proactive nature of Tesla