Stakeholder Management and Strong Relationship in Tesla Motors

This report discusses the stakeholder management and strong relationship in Tesla Motors, highlighting the company's corporate social responsibility strategy and its impact on stakeholders. It also provides recommendations for strategic programs for different stakeholder groups.

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MBA Assignment
12/27/2018

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Executive Summary
Tesla motors has been successful corporation over years and fulfils the needs and
expectations of various stakeholders such as employees, customers, suppliers, investors and
others within company. The needs and interests of the company are fulfilled through the
corporate social responsibility strategy that ensures the ecological balance and sustainability
in the environment. Thus, the report has discussed well all the relevant aspects of stakeholder
management and strong relationship in the company. This has indicated effectively about the
corporate effectiveness and reputation of the company in the automotive industry that acts as
the major success factor behind Tesla.

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Contents
Introduction...........................................................................................................................................3
Company Overview...............................................................................................................................3
Tesla Stakeholder View of the organisation..........................................................................................4
Stakeholder analysis for four selected Stakeholder groups....................................................................6
Stakeholder category identification and generic programs for stakeholders..........................................7
Recommended strategic programs for the four selected stakeholders groups with the reasons.............8
Conclusion.............................................................................................................................................9

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Introduction
The report will outline and provide an idea of different aspects of stakeholder analysis and
the crucial influence of these factors on the organisation’s strategic development. The
analysis of the important individuals, as stakeholder and their contribution towards the
development of the organisation, Tesla Motors in a strategic manner. The mechanism of the
stakeholder analysis can be used as it defines the mechanism to assess the system of
organisation and the key changes that are relevant and important to the various members or
stakeholders in the organisation. The concept or process of stakeholder analysis considered as
a crucial part of the stakeholder management in any organisation. An organisation must
identify all the stakeholders and fulfil their varying needs and interests. Thus, in this
assignment, the report will identify four important groups of stakeholders in the company and
the generic strategic program has been provided for each of the groups. Moreover, the
analysis will also include the reasons behind the strategic programs taken for each individual
as a stakeholder.
Company Overview
An American automotive company Tesla Inc. (formerly Tesla Motors) is located in
California and the key founders of the corporation are Elon Musk, J.B. Straubel, Lan. Tesla
deals mainly in the production of the electric cars and solar panel manufacturing using solar
city. The current Chief executive officer of the company, Elon Musk has envisioned Tesla to
emerge as the company has been engaged in IT operations, and termed as an independent
automaker (Tesla, 2018). The objective behind operating the independent automaker is to
provide offerings at an affordable rate to the customers In addition to the manufacturing of
the electric vehicles, and the company is focused on making high investments for the
installation of solar and energy products. In consideration, to the above context the company
has been widely recognised for the high performing electric vehicles in the industry (Cekic,
Surlan and Kosic, 2017).
Mission and Vision statement of the company
Tesla’s mission and vision statements highlight and provide the significant information about
their high electric automobile manufacturing and other related activities. Tesla has the
mission to drive the transition of the world towards the sustainable energy which emphasizes

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on the benefit of using electric cars rather gasoline ones. Thus, the company follows the
mission, which is socially responsible because it aims to reduce the dependency of people on
the carbon fuels and switching over to energy systems. The vision of the company is ‘To
create the most compelling car of the 21st century by driving the transition of the world
towards ‘electric vehicles’. The company’s vision statement highlights two elements brand
image and the value creation from the products manufactured in the company.
Tesla has some developments in the recent years, which included software up gradation in
many models that required human interaction. In addition to the growth and expansion in the
vehicle lines, the company has also started working in the products into the space, and
improving infrastructure. The company also faced some challenges, as the company needs to
fill orders, and maintain effective relationships and should emphasize on attaining higher
profits (Black, 2017).
Tesla Stakeholder View of the organisation
Stakeholder theory in context to business organisations is referred to organisational
management and business ethics, which address the ethics and morals of the organisation.
Stakeholder view model has been designed which defines about the goals of the organisation,
i.e. to create shareholder value in the organisation. Stakeholders refer to the individuals
whose interests get affected or who influence the activities of the organisation. In an
organisation, there are two types of stakeholders i.e. internal (who are within the business
entity and external stakeholders (Zhang et al., 2018).
EXTERNAL STAKEHOLDERS
INTERNAL STAKEHOLDERS
Tesla Motors
Suppliers
Society
Government
Creditors
Shareholders
Customer
s
Employees
Manager
Owners

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The above diagram of the stakeholder view model describes about the efficiency of the
company as Tesla has contribute significantly towards fulfilling the needs and expectations of
each stakeholder between both the groups. Tesla has important responsibilities towards
internal stakeholders, as they serve the organisation. Therefore, the company would not be
able to survive and grow in the longer period without the presence or contribution and
support of internal stakeholders (Akakpo et al., 2019).
Internal stakeholders are the individuals within the entity of the business organisation, are
enlisted below:
Employees- These are the individuals who receives remuneration or high compensation for
their contribution in the organisation.
Owners- These are the individuals who are partners or the shareholders of the organisation.
Board of Directors – These refer to the individuals who take part in strong governance within
organisation, and they are selected from the vote commonly, from the members of
organisation in the Annual general meeting (AGM).
Managers- These are the individuals perform the function of maintaining different
departments of the organisation who are sales managers, production manager, general
manager and others (Bourne, 2016).
Investors refer to the individuals who make investments in the company.
Tesla motors have adopted efficient CSR strategy, which considers different needs and
interest of the key stakeholders of company. Tesla’s strategy has been considered crucial to
the activities of CSR such as communities, customers, employees, investors, shareholders,
and government (Rahdari, Sepasi and Moradi, 2016).
Stakeholder analysis for four selected Stakeholder groups
Analysing the key stakeholders of company Tesla Motors it has been realised that
stakeholders contribute to the growth, and reputation of the organisation Thus, four key
stakeholders form the group and their interests will be identified to analyse their behaviour,

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motives, and interests; and these categories include communities, employees, customers,
investors/shareholders (Zavyalova et al., 2016).
Communities– Tesla is involved in the automotive business on which communities has a
major influence as they are the base of corporate image of the company. The company
focuses on the primary expectation of communities i.e. to protect the environment; and in this
context the electric cars of Tesla serves the purpose of environment protection. This indicates
that the company has effectively satisfied the expectations of communities by providing zero
emission products (Cherubini, Iasevoli and Michelini, 2015).
Customers- These refer to the individuals are significant element in the stakeholder model of
Tesla, as they are the factors determining wealth or income of the company. To meet the
increasing demand of customers, the company has made efforts in reducing the cost of
batteries utilised in the cars. In addition, they also aim to widen the network station, which
will lead to higher satisfaction amongst customers (Ahsan, 2018).
Employees – Tesla has been accommodating their employees by offering them high levels of
compensation, and efficient HR programmes with the purpose to enhance their ability
towards attaining professional growth. Moreover, Tesla has been responsible towards
ensuring that they provide training programmes, as a part of their CSR activities. This helps
employees to grow and grab opportunities and to build a positive outlook towards world
(Chen and Perez, 2018).
Investors/shareholders- These include the stakeholders, contribute vital to the aspect of
influencing the capitalisation of the company, as they have interests in the profitability and
growth of the business (Mayo, 2016). Thus, the company focuses on addressing this interest
of stakeholders through long-term strategies. In addition, it assures enhancement of
ecological sustainability that is a major factor for building a positive corporate image of the
organisation; thereby attracting investors, which are a part of stakeholder, group (Blomgren,
2017).
Identification of the Stakeholder category and their management through
generic programs
From the above research in the report, it has been analysed that the role of stakeholders in
Tesla has been significant to the increase in productivity and overall success of the

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organisation. In this section, four categories have established for the analysis of chosen
stakeholders, and the categories include users, governance, influencers, and providers
(Ghosh, Gouda and Awasthy, 2018).
The four stakeholders, which will be analysed in the following section, will consist of
employees who belong to the category of internal stakeholders and communities, customers,
investors or the shareholders from the category of external stakeholders of the company.
Thus, the above four stakeholders are attributed to the well-established categories of
stakeholders (Andriof et al., 2017).
Customers are considered to be categorised under the head of ‘users’ as they determine the
effectiveness of the products or programmes initiated by the company; thus, referred as the
beneficiaries of the output. As customers are the best example, it includes some other
important internal stakeholders from the individuals who perform the role of delivering the
software package are found to be the users of sales team. Thus, it indicates that the employees
and communities are also categorised under the head of users in Tesla (Yen and Hung, 2017).
Describing about other chosen stakeholder in the company, i.e. investor/shareholder it can be
defined that these are categorised as the providers. They perform the role of providers, as
they possess the ability to change the direction of the project/programmes. Providers are
major to the company’s effective CSR strategy as they consist of other important
stakeholders includes business partners, contractors, or any individual as they fulfil the
purpose of providing resources for the project completion (Souza et al., 2015).
Tesla’s contribution towards increasing the satisfaction levels of customers includes activities
of expansion of the network station for the customers, which helps them in terms of easy and
improved accessibility. This aspect provided benefits to the most important stakeholder of the
company i.e. customers worldwide. In addition to the satisfaction of customers, the company
is responsible towards their workers/employees equally, as they ensure high compensation
and other significant benefits, and career opportunities to the individuals working in the
organisation. The company maintains a healthy and harmonised working environment
through which employees enjoy a safe, healthy and happy work culture within organisation
(Bendig, Brettel and Downar, 2018).

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Recommended strategic programs for the four selected stakeholders groups with
the reasons
The above discussion has mentioned the general aspects of CSR activities or contribution of
Tesla towards satisfying the varied interests and expectation of the stakeholders within the
organisation. Thus, the following discussion will provide recommendations regarding the
programs available for these stakeholders; strategic programmes can be classified into four
categories swing, defensive, offensive, and hold. These stakeholders work on the following
aspects that mentions about the aspects of supportive stakeholders of the firm that possess
low potential threat, and high cooperate potential, and these include employees, communities
and the customers. Therefore, it is necessary for the firm to adopt the strategy that ensures the
competitive edge of the company and enhance the corporate potential of the firm. The above-
mentioned names of four strategies found to be capable enough for effective management of
these stakeholders.
The application of the swing strategy include the cases when the stakeholders possess high
cooperate potential and low competitive threat. For an instance, it relates with the changes
made in the rules, decision forum, and the processes of transaction. Thus, it is related and
relevant to the employees or workers in the organisation. On the other hand, the organisation
can apply hold strategies to the other stakeholders such as communities as they perform the
responsibility of monitoring the existing programmes formulated and implemented within
organisation. As in this case, these individuals have low competitive threat and low cooperate
potential to continue with their current stakeholder programmes, and activities and
maintaining their positions amongst other key stakeholders of the firm (Mukerjee, 2016).
Offensive strategic programs are utilised in the cases where stakeholders of the firm who
have high cooperate potential and the degree of competitive threat is comparatively low. An
example includes the attempts made to change the stakeholder’s viewpoints or linking the
programs to others, which has considered favourable by the stakeholders. Thus, offensive
strategy used to manage wide range of customers in an effective manner. The case where
competitive threat is high and cooperate potential has been low, within the stakeholders
determines application of defensive strategies. These strategies are applicable to the investors
or shareholders in the organisation, i.e. where there is an increasing threat from other
investors within the company (Weinstein, 2016).

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Customers in Tesla has no preference towards switching over other competitors in the
industry also they are characterised with low cooperate potential, reason being they have
higher satisfaction levels from the offerings and products of company. Hold strategy can be
effective for the company for varied stakeholders (Zhang et al., 2018).
In context to the employees of the organisation, Tesla has satisfied them with the strategy of
high pay and healthy work environment, which defines the appropriateness of the hold
strategy. Describing the reasons these strategies are implemented within organisations, is that
it meets the interests and expectations of the mixed stakeholders in Tesla. According to the
viewpoint of some researchers, the hold strategy in context to the organisations like Tesla has
been one of the best strategies to ensure the stakeholder management and building healthy
relationships within organisation. Hence, Tesla’s managers must focus on adopting and
practising the hold strategy to bring positive outcomes for their contribution to the multiple
stakeholders and attain higher success in future.
In this context, employees in the company have been satisfied with the management’s
strategy of high compensation or pay benefits to them. Moreover, they are provided with
healthy work environment, which helped in retaining them for a longer period. Therefore, it
can be concluded that the case where cooperative potential and the factor of competitive
threat are considered both low, leads to the application of hold strategy.
The rationale for choosing these strategies is that in context to the company and their varied
stakeholders, these are considered as most appropriate strategies in the organisation.
According to the some researchers in this field, the evidences has shown the use of strategies
as beneficial and leading to higher growth and profits which further ensures effective
relationships. These are the contributions of Tesla that determines the effective and efficient
corporate social responsibility of the company in the automotive industry.
Conclusion
To conclude from the above discussion on the stakeholder management of Tesla motors it has
been analysed that the company has achieved higher success, growth, and development in the
future years. The Company has sound and healthy relationship with their employees,
suppliers, creditors, and other stakeholders as it fulfils their needs and expectations largely.
The aspect of strong relationship with the stakeholders indicates about the efficiency of the
CSR practices within the organisation. Thus, the report above has provided recommendations

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for the strategic programs in the organisation, i.e. to manage their stakeholders and change
within their positions, which form the base of success and growth of the organisation in the
long-term.

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