Leadership and Management Styles of Elon Musk

This report examines the leadership and management styles adopted by Elon Musk, focusing on his approach to innovation and success. It discusses various leadership theories, including distributed leadership, servant leadership, and performance leadership, and how they apply to Musk's environment at SpaceX and Tesla. The report also highlights the importance of ethical leadership in achieving organizational goals and objectives.

LEADERSHIP AND
MANAGEMENT, THEORY
AND PRACTICE

Table of Contents
INTRODUCTION...........................................................................................................................1
1. Leadership styles used by Elon Musk ....................................................................................1
2. Leadership qualities that Elon Musk have contributed to his successes or failures................3
3. Elon Musk exemplifies ethical leadership and evaluate the advantages and disadvantages of
ethical leadership.........................................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
In a modern era of companies, there are two basic elements which aids an company to
attain the objectives of business firm and those two elements are leadership and management.
Leadership is a kind of practical skills which an individual possess in order to lead and provide
guidance to other people, team or an organisation towards the track of betterment while
management is considered as an authority to manage the operations and functions of an
organisation so that aims and objectives of firm can be achieved in effective manner. Elon Musk
is one of the greatest inventors of all time and has been innovating in the engineering space.
After facing all the hard life experiences Elon Musk did not gave up and fought with them
bravely and maintained his focus on the vision he saw (Bolden, 2011). He sat himself as an
example of one man to dream, strategies and implement. In this report, the spotlight will be on
leadership and management styles which were adopted by Elon Musk for being successful.
1. Leadership styles used by Elon Musk
Elon Musk whose name is considered among the best innovative minds have been
successful in these years and for that he used many leadership theories and among them he
mostly used transformational leadership style. There are mainly 8 types of leadership styles
which are being used by Elon Musk and those are described below: Management Theories: This kind of theory is all about managing the conduction of
operations and uplifting the standards of employees. In this kind of theory the main focus
is on supervising the operations and performance level of employees. Elon Musk have
adopted this kind of theory in order to make relationship healthy with employees. That
have been done with the help of various tools and techniques like starting up of rewards
system. Being a strict nature person, Elon Musk is very strict and discipline about his
company and work, so there are various punishments made for any illegal activity
conducted by any of the employee. Relationship Theories: This kind of theory is basically called as transformational
leadership. Elon Musk have high number of followers and due to that this theory is being
applied by him. In this theory, basically the main focus is on motivating and inspiring the
followers and that can be done by setting up examples of great things done. In case of
Elon Musk, there are million of followers behind him and to lead them for better future
1

and position. Followers mainly follow up the footsteps of their leader and it is the duty of
leader to provide effective guidelines so that it can lead them to better place. This way
motivation can be given to employees and followers as well. Various techniques can be
used like seminars with followers and provide them motivation through it. Great Man Theories: This kind of leadership style is basically all about natural skills
which a leader possess without any training sessions. There are many examples of leaders
who had clear mind about what they wanted to achieve and even their visions were big.
Among those great man, current example can be taken of Elon Musk who is great leaders
and the vision he had made him effective leader and apart from that he had some natural
qualities of being a great leader and provide guidance to the followers and employees.
Saying can be applied on Elon musk that, “Leaders are Born, not made”. Trait Theories: This kind of theory can be stated as an approach for the study on the
pattern of human behaviour. Apart from that study is being done on the thoughts and
emotions of people. This kind of theory is suitable on the effective leaders as their
followers mainly observe the behavioural and ideas of leader and along with that the
ways through which they deal with certain situations. These things matter for followers
and they apply in their life as well so Elon Musk should create certain paths for his
followers on which walking can make them successful in future life. Behavioural Theories: In this kind of theory, mainly the focus is being done on the skills
and capabilities which can be acquired by the experience and learning sessions. It is said
that great leaders are made, they are not born. There are certain qualities which are
naturally present in Elon Musk but still there are some of them which needs to be
possessed by him and that can be done through various tools and techniques. Elon Musk
has mostly gained the skills through books and thus have applied in own life which
enabled him to be great leader and set himself as effectual example. Participative Theories: This kind of leadership is being acknowledged by Elon Musk as
being an effective leader he always listen to the employees take their valuable suggestion
into account and if they are valuable, he even applies them while making any decision or
for new project. This is very effective in nature and even motivate the employees and
boost the confidence among them so that effective decision can be observed.
2

 Contingency Theories: In this kind of approach, there are certain variables which are
being related to the environment which helps in determining the best leadership style
which can be adopted for certain situations so that aims and objectives can be attained in
effectual manner. This requires flexibility in order to survive in the dynamic environment
of the marketplace.
 Situational Theories: In this kind of approach, leaders choose certain course of action
which needs to be adopted as per the demands of the situation.
2. Leadership qualities that Elon Musk have contributed to his successes or failures
There are number of companies which are being run by the average kind of leaders. Then
there are rare breeds who have extraordinary vision just like Elon Musk who was successful in
establishing the revolutionary ideas into reality and made them practical in nature so that people
can be convinced to believe in large and essential visions. There are certain number of leadership
qualities which Elon Musk possesses in order to lead his employees and make his vision
successful in nature and those qualities are:
 Passionate: This is the special kind of quality which is present in Elon Musk and that
bei9ng highly passionate towards the work and company which is SpaceX. He has the
excitement element just like a schoolboy for new thing or for making something
productive. After selling PayPal, he got enough money that his upcoming generations
can live out a luxury lifestyles but what he did was remarkable and states about his
passion. He invested all that money into his company SpaceX, Tesla Motors and Solar-
city and this is not it, he even took personal loans in millions so that the ventures he is
running should be kept afloat (Haslam and et al., 2014). This kind of financial decisions
made him face situation like he borrowed money for paying up the rents for particular
period of time. His passion did not get affected by the failures of the company like
SpaceX faced various kind of failures regarding launching of space rocket and even for a
decade Tesla Motors remained unprofitable.
 Visionary: Being a leader it is highly important to have a vision not about the place
where you are but the place where you want to be in future within desired time frame.
Musk's vision is what it differentiate him from others. Many of the effective leaders
does not much think about the realities of global warming and the effects on the ozone
3

layer whereas Musk has been working on it and thus finding out the solutions for more
than a decade (Jones and et al., 2014). The most important factor which should be
adopted by every leader is that effective communication skills should be established so
that the vision which is being seen by the leader should be communicated to every
employee and they can set up their focus on certain criteria and thus aims and objectives
can be attained in positive and effective manner.
 Being Rare Breed in Industry: There are many things which are being copied
including the vision and start up ideas. Just like the world does not require same kind of
restaurant who serves chilly chicken in frozen style, just like that there are many other
companies who sell similar kind of products and services and there is no requirement of
the companies who has the tag-line of “Me Too”. This kind of thinking belongs to Elon
Musk and thus he applied it to the real life and launched Tesla Motors. This kind of
element reflects of being unique in own field because there were many companies who
are selling compact and luxury cars but Tesla cars are out of the box by making them
electric smart cars.
 Working for the Greater Good: There are various number of leaders whose thinking is
just ordinary and thus they just keep up the work for making their investors happy and
gaining large number of customers. But that is not the case with Musk as he really
contribute towards the society by bringing effective tools and techniques and upliftment
of the social and economical factors for better tomorrow. Musk believes in upbringing of
everyone and thus he has announced that any other leader or the company who wants to
use their technology can feel free to do it because it is for everyone and moreover he
believes in bringing development to whole society and hands can be laid by everyone to
do it (Mendenhall and et al., 2017). He also stated that no lawsuits will be initiated up
against anyone who uses their technology and that is why even after no profit situation
with both Tesla and SpaceX, still there are investors associated with his company.
3. Elon Musk exemplifies ethical leadership and evaluate the advantages and disadvantages of
ethical leadership
Ethical leadership is defined to be the ability of an individual to lead people keeping in
mind the moral and ethical standards. Ethics in context of leadership are mentioned to as set of
values and beliefs which govern behaviour of a person. The values and beliefs which are adopted
4

by a person should be suitable and appropriate in context of a society. The rise of ethical
leadership can be traced back to the scandals which has been experienced in the corporate world.
The people sitting at position of management were driven by unethical behaviour totally
emphasizing on the profitability domain (Meyers and van Woerkom, 2014). Such behaviour by
leaders in recent past lead to increase in demand of ethical behaviour which leads to sustainable
development and welfare communities. According to a research conducted it has been found out
that unethical leadership is one of main cause of failure of management.
Ethical leadership can be stated as a unique leadership style in which direction is given
for respecting the ethical beliefs and values and for the dignity and right of others. There are
certain concepts which are being related to trust, honesty, consideration, charisma and fairness.
Elon Musk is poster boy for ethical leadership and have relied on values and beliefs which are to
be taken into consideration while formulating decisions for business. He have always considered
to give due importance to the environment in which business is carrying out its operations. The
development of solar city and greener technology are enough evidence to support that he gives
due emphasis to environment and its well beings. The motive behind launching of solar city was
the ethical leadership which made him to give benefits to the society. This does not means that
venture initiated by him is incurring losses. It relies on trust, faith and accountability in the
actions and decision formulated by the management. The subordinates of business are to be
informed on how decision are taken by management.
The major advantages of ethical leadership are:
 The major advantage of ethical leadership is that components such communication and
collaboration will lead to increased job satisfaction among employees. For example: Elon
Musk have quality of establishing effective communication channels which can help
employees to get resolution of the issues which they are facing.
 Employees in the organisation will get a chance to share their views and opinions which
will lead to positive work environment within the company. For example: Elon Musk
have certain quality of encouraging involvement of employees in decision making
process and new project starting and that feel boost confidence in them.
 A situation of conflict is inevitable in an organisation and in such an environment
employees feel safe and convenient to share their views and problems with the
management which ultimately will lead to resolution of problem at a rapid rate. For
5

example: in the above statement it has been mentioned that effective communication
funnels are being established by Elon in order to maintain the decorum within workplace
(Northouse, 2015).
 The situation of collaboration and harmony among employees can be obtained through
practising ethical leadership in the organisation. The collaboration of efforts results in
creating something of value for the society and that is the one of the motives of Elon
Musk to provide upliftment to the economic condition of country. Having such an ethical leader such as Elon must and presence of factors such as
trustworthy and commitment will enhance innovation in an organisation.
Disadvantages of ethical leadership
However there are some disadvantages to ethical leadership as well which are as follows:
 It is necessary that ethical leadership should align with goals and objectives by Elon
Musk of the organisation to carry out their operations and if that is not the case, company
will collapse.
 The dependency on the Elon Musk increases which is not beneficial to organisation
(Parris and Peachey, 2013). The excess of trust on Elon will lead to blindly following
without pointing out of mistakes and issues in the same.
 The policies formulation takes too much time which means that other important measures
are not given enough time and consideration.
CONCLUSION
From the above report it can be concluded that in order to be successful and innovate
there are certain leadership and management styles which needs to be followed so that aims and
objectives can be achieved in positive and effective manner. Elon Musk being an outstanding
leader and entrepreneur always focused on providing upliftment to the social and economical
factors so that betterment can be provided along with the development. In this report it has been
discussed that about the leadership theories which has been adopted by the Elon Musk and have
contributed towards the ethical leadership in the environment of company.
6

REFERENCES
Books and Journals
Bolden, R., 2011. Distributed leadership in organizations: A review of theory and research.
International Journal of Management Reviews. 13(3), pp.251-269.
Bratton, J. and Gold, J., 2012. Human resource management: theory and practice. Palgrave
Macmillan.
Brigham, E. F. and Ehrhardt, M. C., 2013. Financial management: Theory & practice. Cengage
Learning.
Fletcher, D. and Arnold, R., 2011. A qualitative study of performance leadership and
management in elite sport. Journal of applied sport psychology. 23(2), pp.223-242.
Gill, R., 2011. Theory and practice of leadership. Sage.
Haslam, S.A. and et al., 2014. Social identity at work: Developing theory for organizational
practice. Psychology Press.
Jones, S. and et al., 2014. Synthesising theory and practice: Distributed leadership in higher
education. Educational Management Administration & Leadership. 42(5), pp.603-619.
Mendenhall, M.E. And et al., 2017. Global leadership: Research, practice, and development.
Routledge.
Meyers, M. C. and van Woerkom, M., 2014. The influence of underlying philosophies on talent
management: Theory, implications for practice, and research agenda. Journal of World
Business. 49(2), pp.192-203.
Northouse, P.G., 2015. Leadership: Theory and practice. Sage publications.
Parris, D. L. and Peachey, J. W., 2013. A systematic literature review of servant leadership
theory in organizational contexts. Journal of business ethics. 113(3), pp.377-393.
Online:
The Theory & Practice of Leadership and Management Styles. 2016. [Online]. Available
through: <http://smallbusiness.chron.com/theory-practice-leadership-management-
styles-34147.html>.
7

8