Leadership in Business: Analysis of Elon Musk's Style and Challenges

In this analysis we will discuss about leadership in business and below are the summaries point:- Effective leadership is crucial for business success and creating a positive brand identity Elon Musk is a widely known leader in the global business scenario, with innovative organizations Musk's leadership style is a blend of different approaches, including the transformational style focused on vision and forecasting.

Running head: LEADERSHIP IN BUSINESS
Leadership in business
Name of the student
Name of the university
Author note

1LEADERSHIP IN BUSINESS
Introduction
One of the major considerations for the business organizations in getting succeeded in the
market is the effective leadership. This is due to the reason that effective leadership will help the
entities in enhancing the internal capabilities of the firm and staying ahead in the competition. In
addition, leadership will also determine the extent to which the company of the brand will have
positive impression and identity in the market (Paterson, Luthans and Milosevic 2014). The
leaders are the responsible one in getting the company out of the business turbulences and gain
the maximum utility. In the recent time, a leader who is widely known and whose activities and
approaches are getting publicized is Elon Musk. He is the founder of number of innovative
organizations and is creating stir in the global business scenario in small time.
This essay will critically analyze the style of leadership being followed by Elon Musk
along with the major challenges being faced by him. In addition, his approaches of mitigating the
challenges will also be discussed on the basis of different theories.
Personal background
Elon Musk is South African by birth and born on 28th June, 1971. In term of profession,
he is a certified pilot, sailor and electromechanical engineer. In the later stage, Musk moved to
Canada in 1989 and gained Canadian passport. This was followed by moving to the United
States. The first company founded by him was Zip2, which was a software development
company. It got the initial popularity but sold off to Compaq for US$ 307 million. In the later
stage, Elon Musk was associated with the incorporation of PayPal. The most important similarity
between all these companies is that they are stirring up the existing business trends in their
respective industries. Due to the effective leadership style and visionary power of Elon Musk,

2LEADERSHIP IN BUSINESS
SpaceX became the largest private manufacture of the rocket engine in the world, while Tesla
changed the entire scenario of the automobile world by introducing the electric mobility
solutions (Setili 2015). Moreover, all these brands are getting widely popular due to the personal
charisma of Elon Musk. Hence, there are different scopes of analyzing the leadership approaches
of Elon Musk, which will be discussed in the following sections.
Leadership styles of Elon Musk
On the basis of information available for Elon Musk, it is identified that he is having the
blended mix of different styles of leadership. It is identified that transformational style of
leadership is one of his followed approaches. According to the transformational style of
leadership, leaders should have the visionary power and forecasting ability in the business. This
is well applicable in the case of Elon Musk due to the reason that it was his vision of initiating
sustainability in the automobile sector that witnessed the emergence of Tesla motors, while his
vision of colonizing Mars to create sustainable alternative for the human development saw the
birth of SpaceX (Strielkowski and Chigisheva 2018). He once stated that “electric is future” in
regards to the viability of the automobile industry, which is currently witnessing the
transformation of the conventional gasoline powered vehicles to electric ones. Another
assessment being done over the leadership styles of Elon Musk is his approach of leading by
example. According to the transformational style of leadership, it is important for the leaders to
create example in front of the employees (Obschonka and Fisch 2018). This is well evident in the
case of Elon Musk. In the recent time, Tesla is facing the issue of production constraints due to
the lack of facilities along with logistic issues. They are facing bottleneck demand and it is the
leading by example approach of Elon Musk that helped in mitigating the problem. It is reported
that Elon Musk even being the CEO spent 24*7 in the manufacturing facilities and rested in the

3LEADERSHIP IN BUSINESS
office premises. This motivated the lower level employees in giving a bit extra towards the
organization. This incident is also proving that Elon Musk is following transformational style of
leadership.
On the other hand, it is also identified that Elon Musk is having the symptoms of
charismatic style of leadership as well. According to the charismatic style of leadership, the
leaders are having huge publicity and they become public figure over just being the leader of the
lower level stakeholders (Rimmer 2018). In addition, charismatic leaders are having huge
influencing power over their peers. In the case of Elon Musk, he is arguably the most popular
and known CEO in the automobile industry thanks to his social media activeness and
engagement. Elon Musk is seen in Ted Talk show and he is well active in Twitter engaging with
different users. Promotion of his products, updating news and engaging in different social
incidents helped Elon Musk in becoming hugely popular in the larger community (Marques
2017). Other the brand entity of Tesla and SpaceX, Elon Musk himself became a separate brand.
For instance, the engagement being shown by him during the recent Thailand cave rescue
operation helped in getting known to larger number of people (Esty and Bell 2018). This is
helping in building trust in the community and ultimately helping his brands to gain positive
word of mouth in the society. Thus, it can be concluded that Elon Musk is also the follower of
charismatic style of leadership (Lambright 2017). It should also be noted that the charismatic
characteristics of Elon Musk are also helping in following the transformational style. This is due
to the reason that gaining the positive influence among the larger community is helping Elon
Musk in conveying his vision along with having more connection with his employees.
Challenges being faced by Elon Musk

4LEADERSHIP IN BUSINESS
Even though the leadership style of Elon Musk is creating positive value but still there
are numbers of challenges faced by him. One of the major challenges being faced by him is the
production hell by Tesla. Due to the excessive backlog of orders and limited production
facilities, Tesla is not being able to manage the market demand, which is leading to the
bottleneck in the production process and each of the resources including the human resources is
over utilized (Boudette and Musk 2018). This may have negative impact on the quality of the
products along with the dissatisfaction among the employees. With the bottleneck in the
production process, Tesla is losing the new and potential orders and this is major challenge for
Elon Musk. However, in this case, the approach being taken by Elon Musk caused further issues.
According to the reports, he initiated combative style of leadership and forced the employees in
meeting the expectations at any way. He even went to embarrass the employees for not meeting
the expectations publicly and even firing them. According to his approach, the employees should
keep up their performance even beyond their capability. This approach of pressurizing and
bullying people went against the desired expectations and Tesla is still facing the issue of
backlog. In this case, it is recommended that Elon Musk would have been initiated the
democratic style of leadership in getting the job done (Fawcett et al. 2018). This is due to the fact
that according to the democratic style of leadership, all the employees would have been asked for
feedback about what needs to be done in mitigating the challenges and initiating the strategies on
the basis of consensus. This would have caused enhancement in the employee performance and
practical solution to the issue.
Another challenge for Elon Musk is managing the proper and effective organizational
culture. This is also majorly evident in Tesla. Due to the obsession of Elon Musk in doing
everything by own, various organizational elements are getting diluted. This is also incorporating

5LEADERSHIP IN BUSINESS
challenges for Tesla in managing their employees. In the current state, Elon Musk became the
superior and everything in Tesla and thus the internal stakeholders are trying to meet his
expectations rather than achieving the organizational goals (Buschgens, Bausch and Balkin
2013). It is identified that the current organizational culture of Tesla states the pale condition of
their internal environment. Thus, it is becoming challenge for Elon Musk to manage the
effectiveness of the organizational culture. In this case, the current approach of Elon Musk of
getting everything done by self will make the matter worse (Anderson and November 2013). It is
recommended that he should quit as CEO and should act only as the executive board member.
This will ease the pressure from him and Elon Musk will be able to concentrate on a particular
organizational matter. Moreover, with the emergence of larger influence of other board
members, it is expected that the existing organizational culture of Tesla will get improved.
Conclusion
Thus, it can be concluded that by studying the leadership style of Elon Musk helped in
identifying his strengths and weaknesses. Moreover, it is also learned that irrespective of any
kind of leadership styles, involvement of the internal stakeholders in the organizational affairs is
much important. Even if the transformational leader gets the monopoly power and authority in
the business, he will behave in autocratic manner. Thus, transformational leaders should be
limited by the influence of the stakeholders and should be driven accordingly.

6LEADERSHIP IN BUSINESS
Reference
Anderson, C. and November, F., 2013. The shared genius of Elon Musk and Steve Jobs. Fortune,
December, 9.
Boudette, N. and Musk, E., 2018. For Tesla,‘Production Hell’Looks Like the Reality of the Car
Business. New York Times.
Büschgens, T., Bausch, A. and Balkin, D.B., 2013. Organizational culture and innovation: A
meta‐analytic review. Journal of product innovation management, 30(4), pp.763-781.
Esty, D.C. and Bell, M.L., 2018. Business leadership in global climate change responses.
American journal of public health, 108(S2), pp.S80-S84.
Fawcett, S., Jin, Y.H., Fawcett, A. and Bernardes, E., 2018. Technological game changers:
convergence, hype, and evolving supply chain design. Production, 28.
Lambright, W.H., 2017. Relay leadership and long-term policy: The case of Mars. Space Policy,
42, pp.1-7.
Marques, J., 2017. A Mindful Moral Compass for Twenty-First Century Leadership: The Noble
Eightfold Path. The Journal of Values-Based Leadership, 10(1), p.7.
Obschonka, M. and Fisch, C., 2018. Entrepreneurial personalities in political leadership. Small
Business Economics, 50(4), pp.851-869.
Paterson, T.A., Luthans, F. and Milosevic, I., 2014. A proposed orthogonal relationship between
psychological capital and ethical leadership. Advances in authentic and ethical leadership, pp.1-
23.

7LEADERSHIP IN BUSINESS
Rimmer, M., 2018. Elon Musk’s Open Innovation: Tesla, Intellectual Property, and Climate
Change. In Intellectual Property and Clean Energy (pp. 515-551). Springer, Singapore.
Setili, A., 2015. Does Your Leadership Style Destroy Agility... or Supercharge It?. Leader to
Leader, 2015(78), pp.56-61.
Strielkowski, W. and Chigisheva, O., 2018. Social, Economic, and Academic Leadership for
Sustainable Development of Business and Education in the Future: An Introduction. In
Leadership for the Future Sustainable Development of Business and Education (pp. 3-8).
Springer, Cham.