Stakeholder Management in Tesla Inc.

This report highlights the background of Tesla Inc., their mission and vision, challenges, stakeholder analysis, and strategic programs for stakeholder management.

DYNAMIC STRATEGY
AND
DISRUPTIVE
INNOVATION

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Executive Summary
Bigger organisations have larger numbers of stakeholders attached with it. In this
environment stakeholder management becomes very much essential. This report highlights
the background of the Tesla Inc. along with their mission and vision as well as the challenges
associated with the firm. At the same time, it shows the trends that are going on in the
society. Stakeholder analysis has been provided in this report that helps in identifying the
stakeholders and their associated needs. After identifying these stakeholders they have been
placed in different categories such as governance, providers, users and influencers. This
report also highlights the programmes or strategy that is run by the company for all these
individual group of stakeholders. It is found that company has utilised defensive, hold,
offensive and swing as their major category of strategies for stakeholder management.

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Content
s
INTRODUCTION.................................................................................................................................2
Company’s Overview............................................................................................................................2
Tesla’s stakeholder view of the firm......................................................................................................4
Stakeholder Analysis of four selected group of stakeholders.................................................................7
Stakeholder category identification and generic programs for each one of them...................................8
Recommendations.................................................................................................................................9
CONCLUSION.....................................................................................................................................9
REFERENCES....................................................................................................................................10

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INTRODUCTION
Stakeholder management has become very much important in the modern day business.
Different organisations especially the multinational firms have huge numbers of stakeholders
attached to it. Stakeholders are present at different levels and hence multi-level management
has become very much crucial. It is crucial that company does stakeholder analysis so as to
analyse the motive and behaviour of each of their associated stakeholders (Headrick, 2015).
While making of the strategies company needs to identify stakeholders that are essential for
them and make plans for fulfilling their needs and interests. Tesla is one of the biggest firms
in the innovation and deals in the business of Automobiles and energy production. The
company has specialisation in manufacturing of the electrical cars and solar panels. This
report highlights the different types of stakeholder’s group associated with the firm and the
generic strategy programs being made for each of these groups.
Company’s Overview
Tesla Inc. also known previously by the name Tesla Motors is an America based on
Automotive Company. Tesla was established in the year 2003 by Marc Tarpenning and
Martin Eberhard. Tesla is known for its manufacturing of solar panels and electric cars.
Innovation has been the priority for Tesla Inc. and currently they are pioneers in the
manufacturing of the electric cars and new generation solar panels. They aim to manufacture
electric cars at such lower prices that it becomes affordable to all the sections of the society
(Mangram, 2013). This is the major reason that company has gained recognition in the
manufacturing of electric cars. Company has been planning to invest money on different
projects related to energy storage systems.
Mission and Vision statement
Vision and mission statement of Tesla showcases their dominance in the manufacturing of
electric motor cars. The mission statement of the firm states to improve the pace of their
development in the areas of sustainable energy so as to empower the world’s transition
towards sustainable energy. This statement shows that their focus is to move towards the
energy resources that are non-conventional such as running of the cars on electrical energy

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rather than conventional gasoline energy (Hess and Andiola, 2017). From this statement it is
clear that company wants to work towards reducing the people’s dependency on the carbon
fuels as well as their shift towards energy systems. Its mission is to make world a beautiful
place by the help of innovation.
On the other hand their vision statement is linked with their future development and growth
which ultimately emphasises on two things, first is to enhance their brand image and second
is to make products that creates value.
Recent development, challenges and recent industry trends
In the last five years, the company has undergone many types of changes both in terms of
their product profile and development in new areas of technology. They have been able to
develop such type of technologies that does not require human interactions for its
performance. Apart from its dominance in the motor vehicle industry, they have been able to
make developments in the areas such as energy production and its storage. Some of the basic
levels of challenges that company has faced in the last few years are that they are not able to
maintain a healthy relation with their workforce. Their speed towards fulfilling the orders
related electric cars have also been poor.
Industry Trends in the last few years have changed very much. It has been seen that industry
has moved towards building vehicles that runs on electrical energy (Rogerson, 2017). At the
same time, industry has adopted artificial intelligence and hence the major players of the
industry are working towards making driverless cars. Tesla is also in the race of production of
this type of cars.
Tesla’s stakeholder view of the firm
Stakeholders are known to be as the groups or person whose interests are highly affected by
the policies, activities or actions taken by the firm. They also influence the organisational
performance. Tesla being such a big multinational organisation has different types of
stakeholders attached with them. Stakeholder theory is used by the firm to understand types
of stakeholder attached with the firm and their interests and need. When implied within a
firm, this theory refers to the theory of organisational management and business ethics that
addresses about the values and morals of the associated stakeholders in context of the
organisation (Arons, 2017). Stakeholder theory or view model has been created for describing

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the business organisation’s purpose i.e. to generate value for the stakeholders and
shareholders.
In Tesla there are two types of stakeholders i.e. internal and external stakeholders. This
includes the people from the management or business entity also. Internal stakeholders
include board members, owners, employees and other shareholders (Teodorovic, 2015).
External stakeholders include employees, contractors, customers, suppliers, society or
community etc. Stakeholder theory recommends that leaders or managers should consider the
expectations and interests of the attached stakeholders so as to achieve success and
competitive gains in the long range.

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INTERNAL STAKEHOLDERS EXTERNAL STAKEHOLDERS
Above specified stakeholder view model for Tesla represents both the type of stakeholders.
Tesla had to work hard so as to efficiently satisfy the need of these stakeholder groups. Since
these groups are dedicated towards fulfilling the expectations and interests of the people
hence it becomes a primary responsibility of the firm to take care of their needs (Ivanaj, et al.
2015). In the lack of internal stakeholder’s support, the firm would not be able to grow or
survive for the longer period of time.
Internal Stakeholders of Tesla
 Owners: It is referred to as the group or people that own the firm. These are also in
the form of shareholders, investors and partners.
 Employees: They are the group of individual who get compensation or remuneration
for their work in the firm.
 Board of Directors: These are the groups who ensure that strong governance is used
within the firm. These members are elected by common vote of members within the
firm. This gets decided in the Annual General Meeting.
TESLA MOTORS
Suppliers
Government
Creditor
Shareholder
Customers
Society
Employees
Managers
Owners

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 Managers: They are the group of people that are responsible for managing or
maintaining different departments within the firm. Every project or unit has different
managers such as production manager, general manager, sales manager, and
marketing manager etc.
 Investors: These are the group of individuals that are making any type of investments
within the firm. They sought to gain profits from the projects that are going on in the
company. Since this company depends a lot on the innovations hence they need large
amount of investments to be made (Rogerson, 2017).
External stakeholders of Tesla
 Customers: This Company has a huge customer base and the type of projects that are
going on in the company will tend to increase this base. The innovations going on in
the firm will also help the firm in satisfying the needs of their future consumers.
 Government: Since government collects the report and taxes from Tesla hence they
are highly connected with the firm. The policies made by the government have a
deeper impact on the operations of Tesla.
 Suppliers: Since the raw materials and technology needed by the firm is provided by
the suppliers hence they have a deeper impact on business operations. With the
increasing demand of quality, it has become essential for the firm to ensure that they
have suppliers who provide them with high quality raw materials (Galateanu and
Avasilcai, 2016).
 Society: Since the innovations that are going on in Tesla is going to have impact on
the society hence they are essential stakeholders of the firm. The CSR policies made
by the firm are going to have positive impact on the stakeholder management.
Stakeholder Analysis of four selected group of stakeholders
Among the different group of stakeholders related to Tesla Inc. An analysis on the four
stakeholders group on the basis of their behaviour, motives or interests have been evaluated.
 Communities or society: Tesla Inc. is an automotive firm that is influenced by the
needs and requirements of the society. From decades society or community has been
demanding for the technology that works in the direction of protecting environment.
In this regards the concerns of the firm becomes highly essential. The cars and solar
panels that are made by the company are towards giving sustainable development

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(Luo, 2016). Till now, they have satisfied the needs of the consumers by producing
Zero emission cars. In many other technologies they have gained the patents which is
also used by other firms and hence indirectly benefitting the society through different
innovations by those companies.
 Consumers: In the stakeholder view model, they play a highly important role. They
are the actual users of the projects that were going on in the firm. They are the major
reasons for whom the company is doing the innovations and they are their source of
income. In the process of fulfilling the demands of the consumers, Tesla has
decreased the battery cost and has also increased the numbers of charging stations so
that no fuel related problem arise in front of their users.
 Employees: Their workers act as an essential part and also one of the most valuable
assets of the firm. This is because it is their efforts along with their performance that
actually adds the value to the products being made by the company. Tesla has used
different types of HR management strategies so as to fulfil the needs of their
employees and to maintain the healthy employee relations. Tesla has an effective HR
development program that aims to improve the capabilities of their employees and
hence ensuring their professional growth. They also give internship opportunities for
the new talents in the society as a part of their CSR campaigns. This provides
workforce with new opportunities where they can gain certain new kind of skills.
 Shareholders/Investors: Being an innovation driven company, Tesla need to have
large numbers of investors attached to them so that they face no problems in the
funding. In the research projects, Tesla needs to ensure the cash flow for which
investments is very much essential. Apart from this, the mission and vision of the
cited firm is long term and hence requires strategies that aim to fulfil them (Lee and
Jay, 2015). For these strategies Tesla needs continuous investments but at the same
time also needs to ensure that their strategies provide the company with desired
growth and profitability. Company needs to invest the money of the shareholders in
the projects that returns them with profits for the longer duration of time.
Stakeholder category identification and generic programs for each one of them
As deduced from the stakeholder theory, all stakeholders have a significant role in the
success of the firm especially in terms of productivity of the firm. There are four categories

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of the stakeholders identified within Tesla. These categories include governance, providers,
users and influencers.
In the above section of the report, employees were considered as the internal stakeholders and
external stakeholders comprised of suppliers, shareholders and customers. These all are
present in the above mentioned stakeholder categories.
Customers reside in the category of users. This is because they are the major users of the
projects or programmes that are run by the company. They are actual beneficiaries of the
output that is produced by the company. The products of the company aim to resolve the
issues related to their clients. Another group that comes under this category is the sales team.
Another essential stakeholder of the firm is their shareholders and suppliers. This is because
they have the capacity to change the dimension of the programmes or projects run by the
company. Some of the stakeholders of the firm are their contractors, business partners or the
resource providers. They play a very essential role in achieving the goals of the company.
In the next category comes the stakeholder like managers or board of directors. They have the
role of managing all the function within the firm and maintaining governance within the firm.
Last is the influencer category in which company’s decision makers and investors come
(Freeman, 2018). Since their interest is given higher priorities in the firm hence they have
high influence on the operations of the firm. They have the power to make change in the
operational methodology so as to achieve the desired benefits from the operations. This also
helps them to attain the desired objectives set by firm for it.
Strategic program for stakeholders
Strategic program for these stakeholder have also been divided into four categories namely
defensive, hold, offensive and swing. The stakeholders that are supportive pose a lesser
amount of potential threat to the organisation. They have higher cooperative potential
including employees, customers, employees and managers (Akpinar and Vincze, 2016). Tesla
should emphasize on implementing a strategy that is advantageous for the competitiveness
and it must improve the cooperation potential. It is utilised for managing workers, suppliers
and other shareholders.
Swing strategies are utilised for the stakeholders who have both high cooperative potential
with high competitive threat. It is a highly effective strategy that involves examples such as

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change that is made in the transaction process, decision forum or the rules made by the
company. Tesla can very effectively use it for the employees that are working within the firm
(Chen and Perez, 2018). Apart from this hold strategies are used by Tesla for the stakeholder
groups like suppliers.
Offensive strategic program within a firm is applicable to the group that is having higher
cooperative potential and having lower competitive threats. An example of offensive strategy
is the attempts that are made to alter the stakeholder’s perspectives or to link the program to
those things that is considered to be more favourable for the company. For internal
stakeholders it is proven to be a highly effective strategy. On the other hand defensive
strategy is found in the areas such as shareholder management, where there is an increasing
threat from other investors as well.
Recommendations
It is recommended that these strategies can be implemented within Tesla in a more effective
manner so that a client associated with the firm has no preferences to switch to other rivals.
They also have low cooperative potential once they are already satisfied with offerings of the
company and hence hold strategies can be highly beneficial. For employees, high
compensation and healthy work environment has to be provided and hence hold strategies are
useful. It is always recommended that mixture of these strategies must be used within the
firm so as to satisfy the needs of all the stakeholders.
CONCLUSION
From the above based report, it can be concluded that Tesla Motors is pioneers in the
manufacturing of the solar panels and electric cars. They have wide range of stakeholders
attached with them and company has the responsibility to address the needs and interests of
these stakeholders. Communities or society, Consumers, Employees and
Shareholders/Investors are the four main stakeholders attached with it. All these attached
stakeholders lies in the categories like Governance, providers, users and influencers are the
four categories of stakeholders under which all these four stakeholders. Defensive, hold,
offensive and swing are the four types of strategies being used by the firm for their
stakeholder management.

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Arons, J.B., 2017. Tesla's Right to Rise. Transp. LJ, 44, p.133.
Chen, Y. and Perez, Y. (2018) Business model design: lessons learned from Tesla Motors.
In Towards a Sustainable Economy (pp. 53-69). Berlin: Springer.
Freeman, B. (2018) Who Are The Major Shareholders Of Tesla Inc (NASDAQ:TSLA)?.
[Online] Available at: https://simplywall.st/stocks/us/automobiles/nasdaq-tsla/tesla/news/
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