Leading Organizational Change at Tesla Motors: A Comprehensive Report

This report provides a comprehensive analysis of organizational change at Tesla Motors, a leading manufacturer of electric vehicles. It begins with an introduction to Tesla's mission, vision, and values, followed by a comparative analysis of its strengths and weaknesses against competitors like Ford and General Motors. The report then delves into a detailed SWOT analysis, identifying internal strengths and weaknesses, along with external opportunities and threats. It further examines Tesla's strategic objectives, outlining strategies for achieving them, including resource capacity and employee skills. A PESTLE analysis is conducted to assess the political, economic, social, technological, legal, and environmental factors influencing Tesla's operations. Finally, the report reviews existing policies and procedures, offering recommendations for improvement. This analysis provides a thorough understanding of Tesla's approach to organizational change and its adaptability in the dynamic automotive industry.

Lead ORGANIZATIONAL CHANGE and manage
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Introduction
Tesla Motors is the manufacturer and designer of one of the most cutting-
edge electric power trains across the world (tesla.com, 2020).
Headquartered in the Palo Alto, California, the company has satellite offices
in Maidenhead, UK and Los Angeles along with retail locations across the
world. The company does not compromise on the performance, innovation
and appeal nor does it compromise on the commitment towards the
development and hiring of the best across the world.
As far as the work style is concerned, Tesla Motors has been found to work in
smaller, focused teams which are efficient, agile and focused on the
excellence. The company is mostly work driven and contributes to global
impact and has been passionate about its future in automotive industry. The
company has a faster pace, stimulating work environment, limited structure
and innovative means.
Tesla Mission:
The mission statement of Tesla is “to accelerate the world’s transition
to sustainable energy” (tesla.com, 2013). It shows the transition towards
the futuristic business approaches. The emphasis on sustainability shows
compliance of the organization with the global demands of business methods
that aligns with the demand for green energy. This mission was adopted by
Tesla after abandoning the previous one that focused on bringing about a
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transition in the world towards a sustainable transport. In this particular
case, the company demonstrated the focus on energy as one of the crucial
aspects of business.
Tesla Vision
The vision statement of Tesla is” to create the most compelling car
company of 21st century by driving the world’s transition to electric
vehicles” (Gilson & Abbott, 2017). The statement seems to acknowledge an
era that demands prioritization of only renewable energy. In Tesla’s case, the
focus remains on use of the electric energy for powering the motor vehicles.
Tesla Values
The core values of Tesla lies in “doing the best, respect, taking risk,
constant learning and environmental consciousness” (Kwak et al.,
2013). The company applies the value as principles governing the overall
practice and attitude for all the stakeholders and the workforce.
Strengths and Weakness of the Allies and Competitors
Competitor 1: Ford Motors
Strengths:
 Have stronger brand image: This helps Ford in leaving a mark on
the minds of the potential customers (corporate.ford.com, 2020). It
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also helps in building customer loyalty. Customers like to remain
associated with the good brands.
 Have a global supply chain: This enables Ford in lowering its cost,
providing greater variety, higher volume and access to international
customers.
 Have effective process of innovation: This enables Ford in
developing the customer value through solutions that helps in meeting
the new, existing and the unarticulated needs of the market in a
unique manner.
Weakness:
 Have limited scope of global production network: This does not
allow Ford to have interconnected links and nodes that can extend
across national boundaries. There is also a limited chance of
production chain at each stage to get embedded in wider set of
horizontal/linear relationship.
 Higher costs compared to competitors: The higher cost of Ford in
comparison to the competitors tend to reduce its profitability.
 Slower processes of innovation: It restricts Ford in producing
newer products on a larger scale at lower cost and guaranteed
investment return. The process also leads to wastage of resources.
Competitor 2: General Motors
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STRENGTH WEAKNESS
Strengths:
 Have Economies of Scale: This leads to decreased cost that implies
that General Motors will be able to decrease price for gaining a
competitive advantage or increase its profit margins (White, 2017).
 Have Stronger Brands: This allows General Motors to take up word
of mouth marketing, customer recognition, enhanced credibility,
customer loyalty and the ease of the purchase.
 Have Expertise of Human Resource: It helps in improving the
employee turnover, resolution of conflict, satisfaction of the
employees, improvement of the employee performance, development
and training and budget control.
Weakness:
 Have bureaucracy in the organizational structure and culture:
This is a key factor that inhibit productivity, decrease morale and
diminish innovation.
 Limited presence of its market in developing countries: This
prohibits the chance of General Motors in exploring emerging market
in a developing economy.
 Limited diversification of business: This reduces the market risk
and results in lower level of average returns.
SWOT Analysis of Tesla
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OPPORTUNITY THREAT
Strengths
 Have First Mover Advantage: This creates lasting impression on the
customers that has led to brand loyalty and recognition. This factor
also allows Tesla to refine the process and perfect the products and
the services.
 Have zero level of emission: The vehicles of Tesla does not emit
any exhaust fumes and puts across the benefits of clean air.
 Possess advanced battery: These batteries are comparatively
lighter, last longer, ensures quick charging and are recyclable.
 Energy efficiency: This helps in lowering the greenhouse gas,
individual utility bills, creation of jobs and helps in stabilizing the
volatility and electricity prices.
 Lower Cost of Maintenance: This leads to increased productivity
and improve the equipment life.
Weakness
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SWOT

 Newer Innovations in Technology: This lead to higher costs thereby
leading to higher price of products.
 Higher Cost of Spare Parts: This leads to increase in cost thereby
leading to a fall in demand.
 Competition within newer innovations: This implies that Tesla
aims towards latest innovation for hitting the market. This leads to
increase in cost and reduction in profitability.
 Weaker Network for Distribution: Poor distribution network leads
to customer dissatisfaction and higher cost of distribution.
 Maintenance of Fueling Network: This involves additional cost to
the company.
Opportunities
 Have Global Expansion of Sales: This enables Tesla to generate
new potential for revenue, ensure exposure to the investment
opportunities and improve the reputation of the company.
 Expansion of Global Supply Chain: This allows Tesla to enhance its
efficiency and allow the mitigation of risk. This also helps the company
in minimizing delays, improving the customer service and in reducing
the overhead cost.
 Diversification of Business: This ensures the growth of the
company through creation of newer business. For instance, the
company focuses at the creation of newer batteries for different non-
automotive applications.
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Threats
 Inefficiencies in Cost and Production: This leads to higher cost of
operation thereby resulting in competitive disadvantage.
 Uncertainties of the Market: This results in the enhancement of risk
and in turn the cost of the capital.
Future Strategies
First Strategic Objective:
The year 2020 will bring about a fundamental change in the Tesla Motors.
This is because the complete construction of Gigafactory will allow Tesla in
decreasing the battery cost by 30 percent.
Strategy needed 1
Priority: Major
Timeframe: One Year
Responsible Party/Person: Organization
Key Performance Indicator (KPI):
 Resource capacity: This helps in determining the capability of an
organization in committing resources to the new approved workflows
with confidence. This includes all kinds of resources.
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 Budget variance: This helps the company in understanding the
fluctuations and the steps that needed to be taken for reducing
adverse variance. This helps in improved budgeting activity.
Strategy needed 2:
Priority: Minor
Timeframe: Two Months
Responsible Party/Person: Managers
Key Performance Indicator (KPI):
 Cost of training: New training program for newer generation of
technicians which is bound to involve cost.
 Employee knowledge/ skills: The employees of Tesla needs to be
dynamic, multitalented, and a higher achiever with an entrepreneurial
flair.
Strategic Objective 2:
Higher demand for the model 3 guided the company in reconsidering
targets. Tesla looked forward to the goal of producing close to one million
cars by end of the year 2020. This indicated an incremental change.
Strategy needed 1
Priority: Major
Timeframe: One Year
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Responsible Party/Person: Organization
Key Performance Indicator (KPI):
 Resource capacity: The Model 3 deliver a standard electric range of
close to 250 miles while longer range version delivers close to 322
miles. The model is believed to carry complete self-driving hardware
that requires periodic updates in software thereby adding to
functionality.
 Employee capacity: There was a plan for increasing the work force to
close to 9000 people.
 Efficiency of equipment’s: Typically an electric car has efficiency between 85
percent and 90 percent.
Strategy needed 2:
Priority: Minor
Timeframe: Six months
Responsible Party/Person: Managers
Key Performance Indicators (KPI):
 Cost of training: The service training designed for providing students
with the required skills for pursuing a successful career with Tesla
involves certain cost.
 Employee skills/knowledge: Employees are expected to enhance
productivity through necessary skills, abilities and knowledge.
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Review the existing policies and procedures
I tried to review existing procedures and policies of Tesla Motors. There
should be few changes that need to be incorporated through conducting
formal meeting with CEO. Some of the changes includes:
 Increase in the budget for the Gigafactory: This will help in building
more factories
 Staff training budget: This will include the indirect and the direct cost
necessary for designing, analysis, implementation, development,
evaluation and maintenance that will enable the personnel in having
required competencies and skills necessary for completion of the job .
PESTLE Analysis
Political
 Government incentive for the electric automobiles: The decision
of the government to put across financial incentives including the tax
credits for lowering up front cost of the electric vehicles has worked in
favor of Tesla (Zhou et al., 2015)
 Expansion of Free Agreements for Trade: This allows cross border
trading of goods and services without any hindrances or tariff.
 Political Stability in Major Markets: This has implications for the
consumption, economic growth and the investment.
Economic
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 Intervention of Government in Free Market and the related
Goods for Consumer: This enables the company to promote growth,
increase the employment, raise wage, promote equality in income,
enhance profits and address the market failures.
 Stability in Exchange rates of host country currency: This allows
efficiency of the financial market (Buckley, Forsans & Munjal, 2014).
 Productivity and Labor costs within economy: This factor helps in
determining the efficiency of the labor in goods production and also
helps in measuring unit cost of labor for producing every unit of output.
 Rate of Economic Growth: This enables the company in measuring
comparative heath of economy over a time period.
 Discretionary income: This enables the company in determining the
amount it could pay reasonably every month.
 Rate of Unemployment: This helps the company in getting an
overview of the percentage of unemployed workers in labor force.
 Rate of Inflation: This allows the company to get an insight into the
impact of the prices changes for diversified set of products and
ensures a single value representation of the price level for the goods
and services over a time period.
 Business Rates: This enables the company in determining the taxes.
Social
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