Introduction to Management - Tesla

RUNNING HEAD: INTRODUCTION TO MANAGEMENT
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Research & Analysis Paper- Part II

Introduction to Management 1
Table of Contents
Summary..........................................................................................................................................2
SWOT Analysis – Formulating Strategies......................................................................................2
Environment Constraints.................................................................................................................4
Stakeholders.....................................................................................................................................5
Organizational Structure and Design...............................................................................................6
Motivating employees.....................................................................................................................7
Control Measures and Recommendations.......................................................................................8
Conclusion.......................................................................................................................................8
References........................................................................................................................................9

Introduction to Management 2
Summary
Tesla is a leading manufacturer of electric cars and operates in the automotive industry.
The company has presence across the world mainly in Europe, Asia Pacific, North America and
Europe (Carlson,2015). Tesla became the leading player and the most demanding company
because of its innovation in Model-3, with that Tesla improved its market position and covered
the largest market share in the US. The vision Tesla is “to boost the world transition to
sustainable energy by pushing the automotive sector near advanced technologies”
(Salman,2019). This report focuses on the formulation of strategies based on SWOT analysis of
Tesla, includes environment challenges or issues that Tesla is facing, focus on organization
structure and design, stakeholders of the company, motivation techniques used by Tesla, and at
last control methods and tools that organization can use are discussed and recommendations are
given to Tesla in order to ensure effective implementation of strategies.
SWOT Analysis – Formulating Strategies
Strengths: From looking into strengths of Tesla that are batteries production at low cost,
differentiated product portfolio and strong R&D it can be said that the company can focus on
developing products for average income group also as cost of production as compared to other
competitor is low for Tesla because of its strong R&D and high tech gigafactories. This helps the
company to increase its customer base and to achieve its vision. Hence, Tesla can take
advantage of its strengths to a greater extent by focusing not only on the higher-income group
but also on targeting the average and middle-income group (Valentin,2019).

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Weaknesses: Tesla has some weaknesses that are low profitability and a single source
of battery power packs. In order to overcome these weaknesses, the company first needs to focus
on increasing its market share by targeting more customers, and by increasing revenues of the
company (Bruijl.2017). The company has a high debt capital structure this can be balanced if
sales of Tesla increased. Further, Tesla can contact different suppliers for battery power packs or
can go for backward integration.
Opportunities: Tesla can take advantage of opportunities such as decreasing
consumption for fossil fuels by integrating its organizational goals into sustainable goals. Tesla
can take advantage of this opportunity by focusing on providing products that are ecofriendly
and can reduce carbon emission in the environment. With that, the company can able to create
social value and economic value both that can leads to a strong brand image of Tesla against its
competitors in the market (Valentin,2019).
Threats: Tesla is facing issues related to tough competition from Toyota, Nissan, and
Audi in terms of electric cars. With increasing competition, the company is not able to sustain
its competitive advantage for a longer time. In order to deal with these threats, Tesla should
focus on adopting the concept of continuous improvement in order to compete with competitors.
In addition, to answer the consequences of Brexit, the company can target other countries for
setting up its manufacturing plants such as China rather than any European country as at present
there is no clear settlement about EU agreement. Hence, in order to overcome threats of
competition and impact of Brexit, Tesla should focus on continuous improvement and the setting
of its plants to countries where political stability is high.

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Environment Constraints
Political Factors: In the automotive sector, some of the political factors that impact
Tesla's performance are Brexit and support of the government for the production of electric cars.
Instability in the political environment all across the world such as Brexit is a threat for Tesla
and the support of government is the opportunity for Tesla. At present Tesla is taking advantage
of government support by increasing the production of electric cars and gaining the advantage of
subsidies provided by the government.
Economic Factors: The economic factors impacts on Tesla are the growth of the
economy, trade levels, exchange currency, and employment rate. For the tesla cost of the
battery, production decreased and the company is getting advantage of this by expanding its
production units. Further, slow growth of the economy at the global level is a threat that the
company is facing and to overcome this threat at present tesla is targeting developing countries.
Social Factors: The social factors that impact on Tesla operations are shifting the focus
of target customers on low carbon products. Further, preference by customers for renewable
energy products is the opportunity for Tesla to expand its customer base and at present, the
company Is focusing on reducing battery cost so that cost of production can be decreased and
average customers can also buy electric cars (Long, Axsen, Miller & Kormos,2019).

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Technological Factors: Tesla's energy and automotive business depend on available
technologies. Changes in technologies can be a threat as well as the opportunity for Tesla as this
leads to more competition (Thomas & Maine,2019).
Legal Factors: Laws and regulations systems impact on the business and managerial
decision of Tesla. Some of the legal factors that impact Tesla are expanding protection on
patents, regulation on the consumption of energy and trade regulations.
Environment Factors: These factors directly impact on the production process of Tesla,
at present environment factors are an issue for Tesla as the government focusing on the ethical
supply chain, green policies and supporting eco-friendly products that impact on Tesla as the
company needs to change its policies and practices that leads to the increased cost of production
(Chen, Chowshury & Donada,2019).
At present, the most challenging constraints for tesla are political factors and
environmental factors. It is identified that political factors such as the US-China trade war and
Brexit are indicating instability in the political environment across the world. Moreover,
environmental factors that can prove to be challenging for Tesla is changing environmental
policies, ethical supply chain and increasing interference of the government. Besides that the
company is getting advantages from technological factors and social factors and in return Tesla
implementing various strategies in order to gain the advantage of these strategies.
Stakeholders
Tesla’s key stakeholders are communities, customers, employees, shareholders, and the
government. Tesla is performing many activities to satisfy its stakeholders such as for employees
the company provides good working conditions, a competitive salary, and career growth. To

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satisfy its customers at present Tesla is focusing on reducing battery costs so that price of final
output can be reduced. Tesla is also taking care of its investors as at present to improve its
financial position the company allowed other organizations to use Tesla’s patents this will
increase demand for electric cars in the market and eventually leads to increase in revenues and
profitability of Tesla. The government is also satisfied as Tesla contributed to the green
initiative taken by the US and other European countries with that Tesla satisfies government
interest. All these stakeholders are affected and can affect the activities of Tesla (Chen &
Perez,2018).
At last, Tesla should manage communities and give the highest priority to them. As one
of the main interests of the communities is to protect the environment and in order to compete in
this changing environment and due to shifting concern of government, and customers on the
environment it becomes essential for Tesla to give priority to communities with that other
stakeholders can also be satisfied.
Organizational Structure and Design
Tesla is a unique company and its uniqueness is seen in its organizational culture. The
organizational structure of Tesla is characterized as an organic structure. Tesla comprises
different divisions such as energy, production, sales, software, and production. Further, each
and every department focuses on joint specialization rather than individual specialization.
Moreover, Tesla initiates decentralization and flexibility in the organization to ensure
coordination and innovation. Elon Musk flattened Tesla management structure with the motive
of improving communication, coordinating business functions and quick decision making.

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Figure 1: Organizational structure of Tesla
Source: (Cooper,2018)
Hence, from the analysis of the organizational structure of Tesla, it can be said that the
company follows the organic organization structure. Because tesla supports innovation and
coordination with decentralization, flexibility, informal structure, and joint specialization in
order to achieve its organizational objectives (Cooper,2018). From figure 1 it is clear that Tesla
focus on flat structure and specialization along with that decentralization is appreciated that
includes delegation of duties and responsibilities as this leads to innovation and efficiency in the
organization.
Motivating employees
In order to motivate Tesla employees the Maslow hierarchy theory can be used. This
includes identifying five needs in an individual than motivating them accordingly. The basic
needs are psychological needs and safety needs. In order to motivate workers and lower-level
employees, monetary benefits should be given that includes bonuses for their extra efforts,
further self-esteem needs, and belongingness needs are mainly seen in top-level or middle-level

Introduction to Management 8
executives in order to motivate them Tesla can focus on promotion, transfers and by giving
recognition on a quarterly basis to those who performed extraordinarily. Hence, Maslow need
hierarchy theory is useful for motivating employees in Tesla. As with the help of this theory,
efficient employees and inefficient employees in the organization can be identified and focus can
be put on inefficient employees in order to boost their productivity level by offering them
monetary and non-monetary benefits.
Control Measures and Recommendations
In order to ensure that all the plans and strategies are implemented effectively and the
result of these strategies can be achieved, different controlling techniques can be used that are
concurrent control and feedback control. As the strategies recommended to Tesla include
continuous improvement, expansion, and finding alternatives suppliers for batteries power packs.
Hence, to make sure that all these strategies are implemented and lead to result in concurrent
control and feedback control measures can be used. In concurrent control, employee performance
will be track and balance scorecard will be used in that different parameters could be that is the
number of cars approved in quality check, time is taken by each worker for assembling and
reduction in a number of defected cars (Ansoff, Kipley, Lewis & Ansoff,2018). Furthermore,
feedback control includes specific feedback; the changes in plans will take place if any deviation
received. The changes will be done as per the feedback received and then new plans will be
implemented considering the loopholes and deviations.
Conclusion
It is concluded from the above analysis that Tesla adopted strong strategies in order to
compete in the market. But with the changing business factors that are creating a threat for the

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company that is political and environmental factors the company needs to change its strategies
and with that in order to gain advantage from opportunities from social and technological factors
company needs to go for expansion strategies. Hence, these changing factors directly impact on
the strategies of the company and in order to ensure effective implementation of strategies
different control methods or measures can be used that includes concurrent control and feedback
control system.

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References
Ansoff, H. I., Kipley, D., Lewis, A. O., Helm-Stevens, R., & Ansoff, R. (2018). Implanting
strategic management. Springer.
Bruijl, G. H. T. (2017). Tesla Motors, Inc.: Driving Digital Transformation and the Digital
Ecosystem. Inc.: Driving Digital Transformation and the Digital Ecosystem (October 14,
2017).
Carlson, W. B. (2015). Tesla: Inventor of the electrical age. Princeton University Press.
Chen, Y., & Perez, Y. (2018). Business model design: lessons learned from Tesla Motors.
In Towards a Sustainable Economy (pp. 53-69). Springer, Cham.
Chen, Y., Chowdhury, S. D., & Donada, C. (2019). Mirroring hypothesis and integrality:
Evidence from Tesla Motors. Journal of Engineering and Technology Management, 54,
41-55.
Cooper, C. (2018). The Truth about Tesla: The Myth of the Lone Genius in the History of
Innovation. Race Point Publishing.
Long, Z., Axsen, J., Miller, I., & Kormos, C. (2019). What does Tesla mean to car buyers?
Exploring the role of automotive brand in perceptions of battery electric
vehicles. Transportation Research Part A: Policy and Practice, 129, 185-204.
Salman, D. M. (2019). An insight for the market driving forces: Case of Tesla Model-
S. International Journal of Business Ecosystem & Strategy (2687-2293), 1(2), 25-30.

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Thomas, V. J., & Maine, E. (2019). Market entry strategies for electric vehicle start-ups in the
automotive industry–Lessons from Tesla Motors. Journal of Cleaner Production, 235,
653-663.
Valentin, M. (2019). The Tesla Way: The disruptive strategies and models of Teslism. Kogan
Page Publishers.