Corporate Strategy and Governance: A Tesla Case Study Report

This report provides an in-depth analysis of Tesla's corporate strategy and governance, examining the impact of ineffective corporate governance practices on the company's performance and brand image. The report begins with an introduction to corporate governance and its importance, followed by a review of the challenges faced by Tesla, including issues of speculation, lack of transparency, and the influence of the CEO and board of directors. A literature review explores the importance of corporate governance, challenges faced by Tesla, and the relationship between ineffective governance and performance decline. The research methodology outlines the approach taken to gather and analyze data, including primary and secondary sources. The data analysis and discussion section presents findings from both primary and secondary data sources, highlighting key issues and their effects on Tesla. Finally, the report offers recommendations and an action plan for improving Tesla's market performance and brand image through effective corporate strategy and governance, concluding with a summary of the key findings and insights.

Corporate Strategy and
Governance
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CONTENTS
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................3
Background of study....................................................................................................................3
Review of issue faced..................................................................................................................3
Research Aim...............................................................................................................................3
Research Objective......................................................................................................................3
Research question........................................................................................................................4
LITERATURE REVIEW................................................................................................................4
To explore about the importance of Corporate governance for an organisation.........................4
To determine the challenges faced by Tesla due to inappropriate Corporate governance..........5
To identify the relation between ineffective corporate governance and dropping the
performance of Tesla...................................................................................................................7
Recommend ways through which Tesla can improve its market performance and brand image
using effective corporate strategy................................................................................................8
RESEARCH METHODOLOGY....................................................................................................9
DATA ANALYSIS AND DISCUSSION.....................................................................................12
Discussion on the bases of primary data....................................................................................13
Discussion on the basis of Secondary information....................................................................16
RECOMMENDATION AND ACTION PLAN............................................................................17
Recommendation.......................................................................................................................17
Action Plan................................................................................................................................18
CONCLUSION..............................................................................................................................20
REFERENCES..............................................................................................................................22
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INTRODUCTION
Background of study
The Corporate governance consist of set of mechanism or policies which are used by an
organisation in order to manage its operations in effective manner. the main aim of corporate
governance is to look after the operation performed within an organisation while considering the
ethical principles and industrial standards and norms (Puranam and Vanneste, 2016). The
corporate governance support an organisation to create value in front of its stakeholders which
further support in achieving the competitive edge and sustainability at marketplace. For
developing deep understanding about this the study is conducted over an issue of corporate
governance to determine its influence over the organisational performance at marketplace and for
this Tesla is consider. The Tesla Inc. is a electric vehicle and clear energy company which is
specialised in creating the electric vehicle manufacturing, battery energy storage from home grid
scale and also maintain the SolarCity, solar roof and Solar panel manufacturing (Jacoby, 2018).
Review of issue faced
The main issue in which the current research project is based consist of challenges faced due
to inappropriate corporate governance within an orgnisation. Tesla is an American electric
vehicle and clean energy company that is currently facing many challenges due to inappropriate
and ineffective corporate governance that consist of issue of speculation and lack of transparency
and majority among board of directors of Tesla and its CEO (Tesla Board Fails to Pass
Supermajority Measure It Proposed Amid Call for More Oversight, 2019). Thus, the current
investigation is based on evaluation of main challenges encountered by Tesla due to
inappropriate corporate governance along with problems related with ineffective corporate
governance and dropping the performance of Tesla (Tesla, Facing Setbacks and Skeptics, Tries
to Get Back on Course, 2019).
Research Aim
To ascertain the influence of ineffective corporate governance practice on overall
organisational performance at marketplace. A study on Tesla
Research Objective
 To explore about the importance of Corporate governance for an organisation
 To determine the challenges faced by Tesla due to inappropriate Corporate governance
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 To identify the relation between ineffective corporate governance and dropping the
performance of Tesla.
 Recommend ways through which Tesla can improve its market performance and brand
image using effective corporate strategy.
Research question
 What is the importance of Corporate governance for an organisation?
 What are the major challenges faced by Tesla due to inappropriate Corporate
governance?
 Explain about the relation between ineffective corporate governance and dropping the
performance of Tesla?
 What are several ways through which Tesla can improve its market performance and
brand image using effective corporate strategy?
LITERATURE REVIEW
It is a vital section of a research project or dissertation that lead base and framework for
complete investigation through developing better understanding about specific topic and its
objective (Puranam and Vanneste, 2016). To accomplish the objective of current investigation
and have better understanding about chosen topic and its objective various online articles and
authentic journals are reviewed and surveyed, a discussion and brief evaluation of which is
provided below:
To explore about the importance of Corporate governance for an organisation
According to the view point of Prachi Juneja, 2020, Corporate Governance is basically
referred to the way as per a corporation or orgnisation is being governed thus, it is mainly the
technique or tool by which all operations and strategies of companies are directed or managed by
its directors and other members of top authority. Corporate governance is important for an
orgnisation as it lead to carrying out the business operations in such a way that is desired by its
stakeholders in order to satisfy them and meet their expectations. Thus, corporate governance is
basically consists of ways and process that are actually conducted by the board of Directors and
the concerned committees for benefits and supporting needs and desires of companies’
stakeholders thus, corporate governance is all about balancing individual and societal goals along
with leading coordination with overall economic and social goals that need to be meet by an
orgnisation (Jacoby, 2018). Corporate governance is a broad concept that deals with deterring a
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way for effective strategic decision making thus, important for creation of value for stakeholders
through ensuring transparency in business operations which ensures strong and balanced
economic development. Thus, it can be evaluated that Corporate governance is important for an
orgnisation as it ensures that the interests of all shareholders are properly safeguarded and meet
through leading enhanced transparency and accountability in business operations and ensures
that all shareholders fully recognizes their rights and act is most viable way to achieve both
financial and social objective of an orgnisation (Lutsenko, 2018).
Further, as per the information provided by Nicholas J. Price, 2017, it has been evaluated
that corporate governance is vital and important for an orgnisation as it ensures corporate success
and economic growth through maintaining confidences and strong connection with stakeholders
and investors that benefits an orgnisation through supporting raise of capital and finance in a
more efficient and effective way. Further, an effective and string corporate governance also
lowers the capital cost through leading a positive impact on the share price of an organisation.
Beside this, corporate governance is having significant importance for an orgnisation as ensures
that an organization in managed in a best possible manner and way that fits and suitable for
meeting interests of all stakeholders in a best way through proper inducement to the owners as
well as managers in order to set and achieve objectives that are in interests of all shareholders
and overall organization (Wang and Sarkis, 2017). Furthers, corporate governance lead to an
efficient tool for the orgnisation that minimize wastages, risk of corruption, and miss-
management in an orgnisation through leading transparency and accountability in all decision
making and corporate strategy that helps in better brand formation and efficient development of
the organisation. Thus, it can be evaluated that corporate governance is important for an
orgnisation to ensure effective strategy formulation ad decision making that meet expectations of
all stakeholders and overall objectives of organisation along with leading foundation of
transparency, accountability and trust in stakeholders and investors to meet the objectives of
company in more better and viable manner (Singh, and Delios, 2017).
To determine the challenges faced by Tesla due to inappropriate Corporate governance
As per the view point of James McRitchie. 2019, Corporate governance represent a set of
rules, practices and processes that are used by top authority and directors to direct and control a
company. This process of compare governance consists of setting an effective balance
betterment interest of stakeholders of company and overall interest and gaols of an orgnisation.
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Furthers, corporate governance forms a vital part of a company as it is essential for the overall
success and leading sustainability through setting out of rules and processes of governance but an
ineffective corporate governance or its failure could have disastrous consequences for an
organisation. The failure of corporate governance can be lead due to ineffective governance
mechanisms that is due to lack of board committees or committees consisting of few or a single
member. The another reason of failure of corporate governance consists of inadequately un
qualified or audit committee members those are not having appropriate accounting and other
financial qualifications or required experience to analyse key business transactions (Lone, Ali
and Khan, 2016).
As per the view point of Tim Higgins, 2019, the biggest issues encountered by Tesla due to
inappropriate corporate governance consists of failed to pass corporate governance changes at
the electric-car maker that its directors had proposed to give stockholders a greater voice in
company matters. The issues seen in Tesla is mainly associated with Failure of boards of Tesla
over Pass Supermajority Measure It Proposed Amid Call for More Oversight further,
Shareholders also reject measure the proposal of shortening term period of boards to two years
from three. Further issues of speculation and lack of transparency is faced at the Tesla as the
CEO of Tesla, Elon Musk had made an unauthentic statement at Twitter and was unavailable for
a long period that has lead to many consequences for Tesla as the statement was not confirmed
by any of the board member (Naciti, 2019). Thus, lack of transparency and issues of speculation
is the biggest challenge that is lead by inappropriate corporate governance at Tesla.
Further, as per the opinion of Mark Matousek, 2019, the main challenges that are faced by
Tesla due to inappropriate Corporate governance consist of unexpected Layoffs at Tesla that
hampered morale of its employees along with high level of turnover of executive and departure
of talent employees. Beside this, reduction in brand image and a lost Consumer Reports
recommendation along with the SEC accuses Musk of violating their settlement lead to store
closures and investigations into deadly crashes along with enhanced controversial conference
call by its CEO that had lead to overall reduction in brand image and reputations of Tesla that is
creating negative impact on its sales and success of organisation (Kabir and Thai, 2017).
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To identify the relation between ineffective corporate governance and dropping the performance
of Tesla.
As per the view point of Neal E. Boudette, 2019, the ineffective corporate governance has
lead to a big setback for Tesla that lead to dropping of performance of this company. The issues
of speculation and lack of transparency faced by Tesla due to an ineffective corporate
governance. The issues of speculation is mainly associated with act of conducting a financial
transaction that has substantial risk of losing value but also holds the expectation of a significant
gain or other major value. Thus, it can be evaluated the issue of speculation is the situation when
the risk of loss is more than the possibility of a substantial gain as in case of Tesla false
statement has been made by the CEO Elon Musk that was not confirmed by any other
stakeholders has lead to more risk and authentic information for investigator that is due to lack of
majority among directors as a result of inappropriate corporate governance. It could be evaluated
that this act of Tesla had lead to breach of trust in investors who could and wrong decisions due
to unauthentic information lead by CEO of Tesla and lack of majority at among board directors
(Ocasio and Radoynovska, 2016). Thus, the ineffective corporate governance of Tesla has
resulted in bad brand reputation and break of trust of its major stakeholders that is biggest set of
for this orgnisation and also lead to reduction in its performance.
Furthers, as per the opinion of Hilton Holloway. 2019, the issue of lack of transparency in
the corporate governance of Tesla has lead to many difficulty and challenges for this orgnisation
that negatively impacted its performance and business reputation. The issue of lack of
transparency has affected the ability of boards and top authority to take suitable strategies for
betterment of Tesla and further lack of majority among broad of directors is also seen in
corporate governance of Tesla that lead to enhanced issues of inappropriate direction and
framework for overall orgnisation and its stakeholders that affect viability and success level of
Tesla. Further, an ineffective corporate governance lead to bad reputation among stakeholders
and customers that would ultimately affects the performance and productivity level of Tesla
(Grennan, 2019). Thus, it can be evaluated that issue of speculation lead to conscious choices by
stakeholders and lack of trust in them thus, lead to unjust result of uncontrollable circumstances
that is hazardous for the overall performance of Tesla. Further, lack of transparency and majority
among board of directors has made formulation of strategic policies more complicate and
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enhance difficulty in their implication thus, hampers the overall performance and viability of
Tesla (Schmidt and Fahlenbrach, 2017).
Recommend ways through which Tesla can improve its market performance and brand image
using effective corporate strategy.
As per the opinion of Nousrath Bhugeloo, 2020, effective corporate governance plays a vital
role in improving market performance and brand image through leading more effective strategy
formulation and decision making that meets the expectations and desires of all stakeholders
along with leading majority of all board directors thus, lead to enhancement in brand position
and market performance. The vital ways that could be adopted by and recommended for Tesla
for having more effective corporate strategic in order to improve its market performance and
brand image are evaluated below:
Leading transparency and accountability in decision making process- The foremost
recommended way for Tesla to improve its market performance and brand image using effective
corporate strategy consist of brining transparency and enhanced accountability in its corporate
governance so that effective strategic can be formulated (Puranam and Vanneste, 2016).
Transparency is the core competent of corporate governance that transparency ensures that all
actions and operation of board of directors and other authority member should be checked at
must given time by an outside observer and clearly stated towards all stakeholders to provide a
clear answer to expectations of stakeholders. Accountability is also recommended for Tesla as
corporate accountability brings a high level of obligation and responsibility in order to give an
explanation or reason for all actions taken and operations conducted by company. A high level of
transparency and accountability in the corporate governance also ensures more effective
communication of board with stakeholders at a regular intervals so that a more fair, balanced and
understandable assessment about companies actions and operations can be provided in order to
specify how the company is going to achieve its business purpose and desired expectations of
stakeholders.
Regular evaluation of board and directors performance- It is also recommended for
Tesla to keep a check on performance and efficiency of its board and other directors to ensure
effective decision making and strategy formulation for success and better performance of overall
orgnisation (Jacoby, 2018). A regular check and monitoring to evaluate whether the board
members and directors are competent and properly skilled or not to take decisions and from
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strategy as per current market scenario is vital for Tesla to have better brand image and enhanced
market position.
Formation of audit committee- The other way or measure recommended for having more
effective corporate governance for Tesla consists of leading and formulating an audit committee
in order to lead better check on its board operations and actions taken by them. Formulation of
audit committee is recommended for Tesla as it is an effective means and tool to enhance
efficiency of corporate governance through reducing the expected potential and chance for
fraudulent financial reporting and other corruption and unauthentic acts to maintain the good
brands image through better check on financial statement and business position (Lutsenko,
2018). Further, Audit committees is also vital for Tesla as it oversee the overall management of
an organisation through leading internal and external auditors to protect and preserve the equity,
interests and expectation of stakeholders in a more effective and better way thus, ensures better
brand image and market position for Tesla.
RESEARCH METHODOLOGY
Research methodology consider to be that section of a research which put emphases
toward describing set of tools, approaches, techniques and methods that are used by the
investigator in order to perform investigation effectively. This section act as a guide for the
researcher by providing them direction to the researcher about how the data must be collected,
arrange, presented and interpreted to the best possible so that aporop0raite information can be
presented. This section also represented the validity and reliability of the whole investigation by
presenting detail about eth methods used. The presented research is based on both the primary as
well as secondary research and method used for conducting this investigation is mentioned
below:
Secondary Research: -
The secondary investigation is mainly performed over the information which is already
investigated and published with related topic. In secondary research the information about a
particular area of study is collected with the relevant information by collecting the view point
presented by several scholars or authors through their studies. Hence with the help of this
investigation the information is provided from the prospects of other researcher who published
their investigated material rom several different sources such as books, journals, articles,
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company record, media records etc. This investigation is performed for developing an
understanding regarding the nature of study.
 Research approach: - In order to perform secondary research the qualitative research
approach is taken into consideration as it help in gathering and arranging the information
in more detailed manner by providing in depth understanding of data in more meaningful
manner. Despite of this in order to analyse the secondary information the inductive
approach will be used which support in evaluating the information and also work toward
creating a new theory which is based on existing one which provide a base to extend the
knowledge and current understanding.
 Research strategy: - In order to perform secondary research more effectively the
competent analysis method will be used where the gathered information is explai8ned by
providing a theme that provide an idea about what next is to be discussed. This provide
an idea to the reader about the thing over which the discussion is going to be made in
order to make it more explanatory.
Primary Research: -
In this type of investigation the researcher collecte the first hand information which is not yet
been collected by any other person before. This kind of information is result into whole new
information which is not present before. The primary information is mainly collected with the
help of tools like survey, questionnaire, interview, focused group etc. The information collected
through the primary research is consider to be valid and more reliable as compare to secondary.
This is so because it is a data which remain without any kind of filtration.
 Data collection method: - In order to perform the primary information the method used
for gathering data is either qualitative or quantitative method. Among these two methods
the quantitative method of investigation is used within this study as it help in presenting
the information with numerical facts or figures which help in presenting the accurate
information and results into more specific outcomes/.
 Data collection tool: - For gathering primary information there are number of tools that
represent to assist the researcher such as interview, questionnaire, focused group, survey,
case study etc. But for the current study the information will be gathered with the help of
questionnaire which allows investigator to collect larger amount of information in
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stipulated time period by approaching more and more people at a time. The questionnaire
prepared for presented study is mentioned below:
QUESTIONNAIRE
Q 1 Are you aware about role of corporate governance within an organisation?
a) Yes
b) No
Q2 Do you this that Corporate governance support a business in achieving sustainability and
marketplace?
a) Yes
b) No
Q3 According to you what is the importance of corporate governance for an organisation?
a) Maintain work ethics
b) Accountable for Economic development
c) Safeguard interest of stakeholder
Q4 Do you think that, inappropriate corporate governance was the major cause behind this issue
of volatility in stock of Tesla?
a) Yes
b) No
Q5 What challenges does Tesla faced due to this case of inappropriate corporate governance?
a) Negative publicity of brand
b) Drop in stock
c) Mechanical issue with cars
Q6 According to you what actions must be undertaken by Tesla in order to minimise this effect
and improve brand image?
a) Develop an audit committee
b) Maintain transparency with BOD
c) Regular interact with community
 Administration: - The information that will be gathered for this study will be
administrated using email as it is most confinement source for presenting the appropriate
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information to the respondents along with the questionnaire form. This will saves time
and cost, as well as also support in keeping the information safe.
 Sampling technique: - The sampling is defined as the process of selecting group of
people out of whole population who are witness of a particular situation or holds
information about it so that appropriate data can be gathered to assist the primary
investigation for getting better outcome. The sampling is mainly performed with the help
of two methods such as probabilistic and non-probabilistic. Among these two the
probabilistic sampling method has been taken into consideration within this study as it
provide equal opportunity to the people within the population to get selected as a
respondents that will be selected using random sampling method. Hence, in current
project the sampling will be performed using random sampling under the probabilistic
method where the respondents would be 50 employees of Tesla.
 Ethical issues: - While collecting the primary information there are several kind of
ethical issues that a researcher have to face. In order to avoid such kind of ethical issue
there are certain ethical consideration that researcher will follow such as informed
consent where the respondents are provided with a chance to become a part of
investigation voluntarily by disclosing the main aim behind this study. Other than this the
confidentiality principle of ethics will also be followed where the confidential and
personal information of the respondents will be kept secret
DATA ANALYSIS AND DISCUSSION
Data analysis refers to the process of analysing the gathered data in order to convert it into
meaningful information so that appropriate conclusion can be extract out as per the set objectives
of the study. There are several tools that are used for performing eth data analysis in effective
manner such as thematic analysis, content analysis etc. For this study the content analysis will be
used where themes are created for giving zest about upcoming discussion. The frequency table
regarding gathering of primary data is discussed below:
Q 1 Are you aware about role of corporate governance within an
organisation?
Frequency
a) Yes 50
b) No 0
Q2 Do you this that Corporate governance support a business in Frequency
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