Organisational Structure of Tesla: A Business Report

The report revolves around the organisational structure followed by Tesla. It has been analysed in the report that Tesla works upon the divisional organisational structure. The divisional structure can be referred as the multi divisional structure that is divided by the organisational functions in form of a division that have ample resources to operate.

Business Report
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Executive summary
The report revolves around the organisational structure followed by Tesla. It has been analysed
in the report that Tesla works upon the divisional organisational structure. The divisional
structure can be referred as the multi divisional structure that is divided by the organisational
functions in form of a division that have ample resources to operate. It is very important for an
organisation to have an effective and efficient organisational structure that will facilitate the
organisation to stay focussed. The organisational structure followed by the organisation are
divisional organisational structure. The effectiveness of the structure has been discussed in the
report.
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Table of content
Table of Contents
Executive summary..........................................................................................................................2
Introduction.....................................................................................................................................4
Main Body.......................................................................................................................................4
Background information of Tesla...........................................................................................4
Organisational structure..........................................................................................................4
Organisational structure of Tesla............................................................................................5
Effectiveness of the Divisional Organisational structure ......................................................6
Conclusion.......................................................................................................................................7
References........................................................................................................................................8
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Introduction
A business report basically revolves around the evaluation of specific issues that are
faced by an organisation. The purpose is to identify the circumstances along with financial
operations that further relates to the business performance of an organisation. The main purpose
of the business report is to communicate the relevant information regarding the business issues
faced by the organisations in an effective and efficient manner. The topic covered in the report is
Organisational structure of Tesla. The organisational structure is a concept wherein the specific
activities are directed in a specific manner in the organisation in order to accomplish the goals of
the organization (Smeds, 2018).
Main Body
Background information of Tesla
Tesla is an electric vehicle manufacturing organisation that is based in California, United
States. The focus of the organisation is upon combustion of clean energy in the environment.
The headquarters of the organisation is situated at Austin, Texas. Tesla is an auto mobile sector
organisation that designs as well as manufactures electric cars and battery energy storage along
with solar panels as well as solar roof tiles along with the related products. At present, Tesla is
the leading auto mobile organisation in terms of sales of the battery electric vehicles along with
the plug in electric vehicles. The organisation was founded by Martin Eberhard and Marc
tarpenning in the year 2003 by the name of Tesla Motors.
Organisational structure
The organisational structure is referred to the concept of determining the flow of the
information between the various levels of the organisation. It is very important for an
organisation to have an effective and efficient organisational structure that will facilitate the
organisation to stay focussed. The organisational structure allows the organisation to perform
various functions in a smooth manner. There are various types of organisational structures such
as functional, divisional, flatarchy as well as the matrix structures. The various types of
organisational structures have been discussed below (Liu and Zhu, 2019).
 Functional structure- The functional organisational structure is considered as the most
common organisational structures for various organisations. The functional
organisational structure can be alluded as the bureaucratic organisational structure. In the
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functional organisational structure, the company is divided on the basis of the work force
specialisation. The functional structure is implemented by many small as well as medium
sized businesses. The different divisions of an organisation under the functional
organisational structure to attain the organisational performance are marketing, sales,
human resources along with operations (Chen and Chang, 2020).
 Divisional structure- Divisional structure is referred to the type of organisational structure
which is quite common in the large organisations that have different business units. The
divisional structure is also alluded as the multi divisional structure that is used by the
organisation in order to structure the leadership team based on the products as well as
projects along with respective subsidiaries that they operate in. It is very significant for
the organisation that have various product lines and each business unit to operate
individually under its own superiors. In the divisional structure operational structure, the
divisions can be further made on the basis of the functions performed at the organisation.
 Flatarchy structure- Flatarchy is a new organisational structure that that is used in the
various new start-ups. Just like the name suggests, the flatarchy organisational structure
tends to flatten the hierarchy along with the chain of command that helps in facilitating a
lot of employees within the economy. It is considered that the organisations which use
the flatarchy tend to have a high speed of implementation in the organisation. The
implementation tends to be in aspect of assorted strategies that are implemented at the
organisation in order to accomplish the organisational objectives (Quail, 2020).
 Matrix structure- The last and the fourth type of organisational structure is the matrix
organisational structure. The matrix organisational structure is among the most confusing
type of organisational structure as well as the least used organisational structure due to its
complex procedure and application. The matrix organisational structure comprises of
various employees that work within various superiors, divisions as well as departments
(Salt, 2018).
Organisational structure of Tesla
The organisational structure followed by Tesla is Divisional organisational structure.
Divisional structure is referred to the type of organisational structure which is quite common in
the large organisations that has various business units. The divisional structure is also referred as
the multi divisional structure that is used by the organisation in order to structure the leadership
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team based on the products as well as projects along with various subsidiaries that they operate
in. It is very significant for the organisations like Tesla, which have various product lines and
each business unit operates individually with its own superiors. It is very important for Tesla to
have an effective and efficient organisational structure that will facilitate the organisation to stay
focussed. The divisional organisational structure allows the organisation to perform various
functions under various divisions in a smooth manner (Chadwick, Larmer and Smythe, 2020).
Effectiveness of the Divisional Organisational structure
The application of divisional organisational structure is quite effective for Tesla. Tesla
does not have particular organisational structure but it can be termed as divisional as it has a
unique nature and It is quite specific and rigid. The organisational structure of Tesla comprises of
various number of divisions like energy, production, engineering, production, human resources,
communications, finance, legal, sales as well as software. Each division of the organisation is led
by various superiors such as vice presidents. The software division is an exception that is led by
Director of Artificial intelligence. The divisional organisational structure of Tesla has a huge
significance for the organisation. The organisational structure facilitates the organisation to have
less bureaucracy in comparison to the various other organisations of the same size. The
divisional organisational structure facilitates the electric auto maker so that the speed of
communication can be increased within the several layers of the management in order to have
positive implications regarding the decision making and flexibility of the business. The
importance of divisional structure of Tesla have been discussed below (Zeb, 2020).
 Development of divisional heads- The divisional organisational structure helps in
development of the division that further looks after all the functions that are connected
with the organisation. The various divisions of Tesla include various departmental
functions like purchase, sales, production, advertisement, finance, etc. These are helpful;
for the organisation in performing effectively and efficiently due to the divisional
structure of the organisation. The divisional structure has facilitated the development of
the diversified skills within a divisional head (Cox and Soobiah, 2018).
 Divisional results can be assessed- The divisional organisational structure has facilitated
Tesla in carrying out the activities of each division on the independent basis. This has
helped Tesla to ascertain the profit and loss of each division in an easy and effective
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manner. As per the performance, Tesla can shut down its non-operating divisions in the
various regions (Parent and O’Brien, 2018) .
 Quick decision making- The divisional structure of Tesla has helped the organisation in
formulating quick decisions as every organisation is considered independent in itself.
This will help in reducing the workload of the divisional heads as the decisions are taken
without the divisional managers (Keneley, 2018).
 Easy expansion- Tesla has opened separate division heads for different production units
under the divisional organisational structure. In case, the organisation wishes to introduce
a new product in the organisation, it can be initiated easily without creating a hindrance
in another division. Hence, it can be stated that divisional organisational structure has
facilitated easy expansion of the organisation .
Conclusion
It can be concluded from the report that organisational structure plays a significant role in
an organisation. The organisational structure is referred to the concept of determining the flow of
the information between the various levels of the organisation. The report has highlighted the
concept of organisational structure along with the organisational structure followed by the
primary organisation. It has been analysed that the organisation follows a divisional
organisational structure and thus the effectiveness of the structure has been discussed in regard of
the organisation in the report.
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References
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Structure. In The New Management Challenge (pp. 71-84). Routledge.
Liu, D. and Zhu, W., 2019, March. Students' Initial Experience of Flipped Classroom in Business
and Management Education in China: Perceptions and Implications. In Proceedings of
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124-130).
Chen, Y. and Chang, V., 2020. Philips vs. Matsushita: a critical review and
comparison. International Journal of Economics and Business Research, 20(3), pp.243-
254.
Quail, J., 2020. The proprietorial theory of the firm and its consequences (pp. 73-110).
Routledge.
Salt, J., 2018. Organisational labour migration: theory and practice in the United Kingdom.
In Labour migration (pp. 53-69). Routledge.
Chadwick, M., Larmer, P. and Smythe, L., 2020. The History of Allied Health An International
Perspective. Journal of Allied Health, 49(4), pp.285-289.
Zeb, J., 2020, September. An integrated framework for municipal capital investment planning.
In Proceedings of the Institution of Civil Engineers-Municipal Engineer (pp. 1-12).
Thomas Telford Ltd.
Parent, M. and O’Brien, D., 2018. Organisation theory and sport management. In Managing
Sport Business (pp. 179-205). Routledge.
Keneley, M.J., 2018. The Response of Corporate Strategy to Competitive Challenges: The
Predicament of Australian Mutual Insurers 1970–2000. Australian Economic History
Review, 58(3), pp.315-337.
Cox, P. and Soobiah, D., 2018. Evidence on post-financial crisis corporate culture in UK listed
banks. Journal of Banking Regulation, 19(2), pp.149-159.
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