Leadership and Sustainability: Tesla's Leadership and Strategies

This report provides a comprehensive analysis of leadership and sustainability, using Tesla as a case study. It begins by defining leadership and its growing importance in achieving sustainable growth, particularly in the context of environmental concerns. The report then delves into Tesla's leadership, highlighting Elon Musk's transformational leadership style and its application of various leadership theories, including trait theory, transformational style, path-goal theory, and behavioral theory. It examines the challenges leaders face due to global environmental issues, such as climate change, pollution, and the need to balance profitability with sustainability. The report also explores Tesla's sustainable strategies, including its mission to accelerate the world's transition to sustainable energy, and its integration of sustainability goals with organizational objectives. The report concludes by emphasizing the crucial role of leadership in driving sustainable practices and the impact of leaders in shaping the automotive industry's future. The study includes discussions on CSR and shared value, the evolution of leadership for sustainability, and the challenges and strategies for leaders in the face of global environmental pressures.

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Leadership and Sustainability

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Table of Contents
Introduction......................................................................................................................................2
Leadership........................................................................................................................................3
Tesla.............................................................................................................................................3
Challenges for leaders because of global environmental issues..................................................6
Sustainable strategies applied by leader in the organization...........................................................9
CSR and Shared Value and role of leadership...............................................................................10
Conclusion.....................................................................................................................................13
References......................................................................................................................................14

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Introduction
Leadership is defined as the way an individual or leader influences others for achieving personal
or organizational goals. At present, the role of leadership in achieving sustainable growth is
gaining importance. In order to be sustainable, businesses require leaders that act as a change
agent and help the organization to gain first-mover advantage in the market by following
sustainable practices and sustainable goals. Leadership for sustainability requires the
extraordinary abilities of a leader, this includes long term vision, solving complex problems,
bringing change and have emotional intelligence. Leadership and leader is a key to gain
sustainability goals as leadership through sustainability is a new idea and that includes “a
radically expanded understanding of leadership that includes an enlarged base of everyday
leaders in all walks of life who take up power and engage in actions with others to make
sustainable differences in communities and organizations” (Metcalf and Benn,2013).
This paper focuses on the application of leadership theories with sustainability in order to do so
Tesla is selected. Tesla is a leading player in the automotive industry in the US and leads by Elon
Musk. He transformed the organization and at present, the company follows sustainable practices
in order to achieve sustainable goals. This paper discussed the role of leadership in bringing
sustainability and change in the organization and challenges that leaders face because of external
environment factors at the global level. Further, tools of sustainability that the organization
adopted and benefitted from this are discussed and at last sustainable strategies of Tesla are
included.
Leadership
Tesla
Tesla is an American company that operates in the automotive industry and offers electric
vehicles across the world. Tesla is amongst one of the companies in the automotive industry that
has taken this industry to the next level. Its vision and mission statements have been changing to
integrate with its new strategies that are to focus on efficiency, reliability, and sustainability. The
mission statement of Tesla is “to accelerate the world’s transition to sustainable energy”. As
organizations are led by leaders the changes that are carried in any organization depend on the

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leader's ability to take the risk and to make change acceptable by other people (Strielkowski, and
Chigisheva, 2018). Here, Elon Musk's leadership style is highlighted as he is a leader with great
vision that leads Tesla and focuses on bringing changes in the organization that result in the
success of Tesla. In the below sections, the case study of Tesla is discussed using applications of
leadership style used by the company and the theories that are applicable to the present scenario.
Further, theories that are highlighted in the below sections include trait theory, the sustainable
leadership style of Elon Musk, situational theory and behavioral theory (Lang et.al,2018).
Theories and Application
Trait Theory
The trait theory of leadership can be applicable here in order to understand the traits that Elon
Musk possesses and that helps Tesla to be a successful company in the market. Some of the
leadership traits of Musk are powerful vision, self-confidence, innovativeness, and focus on
leading by example. Other traits are collaboration, changing agents, hiring carefully, optimistic
and focus on the big picture (Marshall et.al,2017). Tesla is building and becoming a successful
company because of Elon Musk's long term vision that is focusing on maximizing their use of
green energy. His vision and mission are simple, attractive, beneficial and understandable and
shifted Tesla's focus to sustainable goals.
Transformational style
The transformation step that Tesla has taken is the result of global issues and concern. The focus
of the government on green initiatives is the reason behind the change in Tesla's strategies. The
global concern towards safety and protection of environment shifts tesla focus to sustainability.
With the help of leadership, sustainability can be achieved that helps to reduce the negative
impact of operations of the business on the environment and to focus on global concerns.
Leaders are the one who supports and direct others (Kuenkei,2015). Tesla moved to
sustainability because of Elon Musk and the traits and characteristics that Musk possesses leads
to the success of the organization. In bringing sustainability, the leader’s role is crucial and their
style defines many aspects of the organization. For instance, Elon Musk's leadership style is
transformational. Transformational leaders are the ones who can take the risk and works with a
team to bring revolutionary change. Under the transformational leadership style, Tesla becomes

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a leading and innovative company. Tesla employees followed Elon Musk because he is the one
who changed the way the company operates.
Moreover, transformational leaders use their power and intelligence to bring change and with
that, they get first-mover advantage. Tesla electric cars, mainly Model X proved to be a great
success for the company due to that most of people shifted towards electric car use. This reduces
the overall impact on the environment such as the reduction in the level of pollution, reduction in
greenhouse gases and stability in climate. Further, with this approach that is adopted by Tesla,
the automotive future will be electric cars that contribute positively to the environment and
sustainability. In order to bring leadership and sustainability in one frame, Tesla leader integrated
its goals to sustainability and made strategies that are applicable to achieve those sustainable
goals (Burns et.al,2015).
Path-Goal theory and Behavioral Theory
On the other side, leadership theory that is applicable to Tesla and adopted by tesla includes Path
goal theory and behavioral theory. In 2018, Elon Musk sent an email to its employees regarding
the high rate of injuries during production or operations in that he highlighted that he will meet
injured people individually. This indicates that because of supportive leadership and participative
leadership traits he tries to connect with its employees and considered their employees as an
important asset for the company. At last, he decided to change policies and rules regarding
health and safety measures of employees. For that, he took responses from employees this
indicates its participative leadership traits. Further, the focus of path goals theory is that a leader
set goals of follower and measures their performance and guides them to achieve those goals.
Elon Musk set goals for its employees such as producing high-quality electric cars and in order
to complete this goal he stands in front of their employees to remove any roadblocks and
obstacles. Hence, Tesla become successful and shifted its focus to sustainability because of
vision and leadership style of its leader. This indicates that leader characteristics and traits and
style play an important role in order to bring sustainable practices and growth for the
organization. In a nutshell, Elon Musk leadership style is based on the behavioral and situational
theories of leadership (Bilbeisi and Kesse,2017).

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Tesla with the use of different leadership theories is able to solve current issues at the global
level. As because of innovativeness and quality of Tesla products people start using electric cars.
Further, the main advantage is that sources of energy are also sustainable. The move taken under
leadership of Elon Musk by Tesla proving to be beneficial for people, environment and for the
society and with that the company is setting example for other competitors in the market. Hence,
the impact or influence and role of one leader can be seen in changing the whole industry and
operations of its competitors. Hence, the leader becomes significant part of sustainability
development because the businesses have larger impact on environment and society with the
involvement of leaders businesses can shift towards sustainable techniques, methods and
practices ( Nicholson and Kurcuz,2019).
Figure 1: Evolution of leadership for sustainability
Source: (Redekop,2010)
Challenges for leaders because of global environmental issues
At the global level, some issues that are of major concern and businesses and people should also
concern about this include climate change, pollution, global warming, waste disposal, and loss of
biodiversity. These problems are becoming a serious concern because of increasing business
activities and the changing demand of people. The government and institutions at the global
level focusing on bringing change by restricting businesses for imposing sustainable practices.
This change can be implemented in any organization with the help of the leader ( Broman

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et.al,2017). But it is a challenging situation for the leader to change the status quo and influence
others to accept a completely different way and platform. Leaders face challenges such as
developing managerial effectiveness that includes quick decision making, time management, and
standardization. Further, some of challenges are related to inspiring others to accept the change
and developing employee’s mindset to accept the change and managing of politics and internal
stakeholders.
1. Bringing changes and let employees accept the change: Tesla also faces challenges
because of global environment issues, as the company need to change its strategies and
goals as per the changing business environment. The role of leaders in this era is more
demanding as they need to focus on motivating a diverse workforce, need to work across
cultural boundaries and have different ways of getting work done (Kiron et.al,2015).
Tesla also faces these challenges as their employees were not ready to accept changes.
Elon Musk changed the number of things in order to make employees more productive
and these changes include the adoption of 24*7 shifts to boost production of Tesla Model
3 electric car, employees resist this change but Elon Musk is a leader who doesn’t depend
on others to accept change rather he sets an example (Groysberg et.al,2018). He asked
employees to give ideas to boost productivity and to improve work but no one is able to
give an idea and they all ended up accepting the change. Hence, it is clear that bringing
change and let others accept the change is a challenging task for a leader and if this is
done efficiently it can lead to a greater result.
2. Setting of sustainable goals and vision: Leaders because of global environmental issues
are not able to integrate sustainable goals with organizational goals. Due to that
companies are not able to set sustainable goals in the organization. It is the
responsibility and accountability of the company to set sustainable goals in the
organization so that they can reduce the negative impact on society. It is difficult for the
leader to set goals or to change goals for the organization as a leader is the one who sets
goals in the organization and lets others follow the goals (Pearce et.al,2013). Hence, the
leader faces challenges in order to set sustainable goals for the organization.
3. Ensuring profitability and sustainability at the same time: Leaders have the
responsibility to run the organization profitably and in order to do so they set goals,

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influence others to achieve those goals effectively and efficiently. On the other side, it
becomes difficult for the leaders to implement sustainable practices and earn profits at the
same time. As most of the organizations are not able to integrate sustainable practices in
its operations because of low profitability and more efforts by the organization. The
leaders who are not ethical and think of their profitability and success on any cost impact
negatively on the society and community. Hence, it is challenging for leaders to make the
organization profitable by adopting sustainable approaches.
In the context of Tesla, Elon Musk is also facing challenges because of global issues such as
maintaining profitability as due to sustainable practices adopted by the company it is difficult to
reduce the cost of production. As the company firstly adopted sustainable practices in its supply
chain and invested a huge amount in its factories to ensure sustainable production and
distribution. Due to that, it is a challenging situation for Elon Musk to increase its profits.
However, because of Elon Musk's leadership style and qualities the company will be successful
in the long run.
Sustainable strategies applied by the leader in the organization
A sustainable organization is the group of organized people that are gathered to attain the
objective of sustainability. Sustainability is not limited to the implementation of sustainability
strategies rather it is more than that; it is integrating strategies with the goals to earn long term
profits along with ecosystem protection. There are many organizations that adopted sustainable
strategies in order to meet sustainable goals. One of the organizations is Tesla; Elon Musk made
tesla a sustainable organization by integrating sustainable practices with organizational goals.
The leader adopted sustainable strategies in Tesla due to the value of the company increased to
USD $ 50.84 billion (Lang et.al,2018). Tesla incorporated the concept of sustainability at the
heart of its business strategy. Tesla adopted the big picture from the starting by addressing two
sustainable criteria that are: transition to a carbon-neutral economy and the adoption of a
business model for Zero emissions in the transportation industry. Tesla's objective is to lessen
environmental problems, for that the company adopted an approach to focus on creating higher
value for the society and for the target customer of the company. The sustainable leadership
model of the company helping Tesla to be a leader in the market by achieving long term profits

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with the aim of conserving resources of the planet and contribute to building a sustainable
society (Marcus,2015).
Tesla's strategy includes the production of electric cars and using renewable sources for energy
in order to reduce the impact on climate by reducing greenhouse gases emission. Elon Musk
focuses on the development of Model 3 that aims to shift people to use electric cars so that
pollution can be reduced, consumption of petrol and diesel can be reduced and more initiatives
can be taken to protect the society. Further, other strategies that are adopted by the company are
the growth of electric vehicles, doubled the capacity of Powerwall battery and the adoption of
new technology in order to reduce the negative impact on the company. Further, the company
invested in Gigafactory in order to ensure the use of a renewable source. The factory aims to
produce 50GWH of batteries by 2020. Hence, Elon Musk is a transformational leader that
transforms Tesla towards sustainable practices and integrates all its practices with the
organizational goals (Khan and Ahmed,2019).
CSR and Shared Value and the role of leadership
Corporate social responsibility and creating shared value are two different concepts. CSR is
taken as part of company operations and each and every organization take steps to reduce the
negative impact that companies operations are creating on the stakeholders. On the other side,
CSV has emerged as the dominant paradigm underlying CSR. CSV is considered as “efforts to
enhance the competitiveness of a company while simultaneously advancing the social and
economic conditions in the communities in which they operate” (Hynes and Mickahail,2019).
Creating shared value
The concept of CSV has been welcomed by businesses as Tesla is the company in the
automotive industry that gets a competitive advantage in the market because of adopting the
concept of “creating shared value”. Elon Musk’s vision and objectives for Tesla lead the
organization in the new direction. As the company is a clear indicator of adding social value
and economic value, it produced Tesla S in 2016 that transformed the automotive industry and
helped both society and economy to develop. The creation of value is the joint between
companies and the community. The man behind this change in Tesla is Elon Musk; the leader

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has the ability to transform the organization and influence each and every individual to attain
common goals ( Hoffman,2015).
CSV is integral to profit maximization and Tesla completely based on the concept of CSV and
developing economic value and societal value. As the company redefined its market and
products as Elon Musk not only changed the automotive industry by introducing electric vehicle
rather he aims to create 100 percent renewable energy sources for supercharger infrastructure.
Further, a solar city merger will provide solar panels to the supercharger stations. Musk is using
solar city as an actor in the systematic innovator of electric vehicles. This approach benefits the
company as Tesla gains a competitive advantage in the market and with that creating value for
the society by reducing the use of CO2 and other gases that contribute to global warming
(Confetto et.al,2018). With that initiative, the company can create economic value and well as
value for society. Hence, the role of leadership is more influential in order to create shared value
and to run the organization in a single direction. As implementation and adoption of a shared
value concept required long term vision, integrity, and courage by the leader to lead others and
influence and motivate others to accept and initiate the change (Hedstrom,2018).
Corporate Social Responsibility
CSR is the activities that companies perform in order to ensure a positive impact on the society
and these activities are also performed considering stakeholders of the organization. Tesla tool
many initiatives to reduce the global greenhouse emission and to control the situation of climate
change. The level of CO2 cannot reduce at the global level without addressing energy
consumption and generation and in order to do so, it is important to control emissions in the
power sectors and transportation sectors. “This issue is Tesla’s entire reason for existing”. That
by the end of 2018 Tesla is able to launch 3 Million electric vehicles on the road globally in
order to reduce gas emissions. In 2019, Tesla installed over 3.5 Gigawatts of solar installations
and with that, the company generated 13 TWh of emission-free electricity. Further, under the
leadership of Elon Musk Tesla is bringing change in society by providing affordable solutions
for electricity to communities across the globe ( Cavagnaro and George,2017).
Energy efficiency plays a significant part in the company’s long term sustainable energy goals.
With that Elon Musk is able to change the mindset of its target customers and shift people

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towards the use of Zero-emission lifestyle (Allio, 2018). Further, Tesla contributed to the
development of infrastructure in the US and improving the standard of living of individuals in
the country. As tesla invested in the development of charging infrastructure and developed
12,800 superchargers stations globally and in the US 99% of the population have access to the
supercharger stations. On the other side, recycling products also contributed to the protection of
the environment the company recycled 2,900 tons of plastic in the year 2018. The company had
tie-ups with third-party recyclers to process its scrap and to recycle the batteries ( Bekefi and
Epstein,2016).
Hence, it can be said that the leader is the one who runs the organization and his ability to decide
at the right time and his vision helps the organization to be successful. An effective leader and its
leadership style play an important role in sustainability. With the above case study of Tesla, it
can be said that Elon Musk also possesses servant leadership style and authentic leadership style
and ethical leadership style that help Tesla to gain competitive advantages by creating shared
value. Thus, the role of leadership in the creation of shared value is appreciated.
Conclusion
It is concluded from the analysis that leadership plays an important role in bringing
sustainability. This is analyzed by implementing the applications of leadership style and theories
and the concept of sustainability on Tesla. In the present business environment, Tesla is a
sustainable organization in the market because of the leadership style adopted by Elon Musk. It
is concluded that Elon Musk possesses a transformational leadership style and applied path-goal
theory and situational theory in order to lead Tesla. As its leadership style helps the company to
be a sustainable organization in the automotive industry. It is also analyzed that under the
leadership of Elon Musk, employees of Tesla accepted the change and moved towards
integrating sustainable practices with the organizational goals. Elon Musk as a leader plays an
important role in bringing Tesla at the top and helps Tesla to focus on creating economic value
and social value. Hence, leadership plays a significant role in bringing sustainability to the
organization.

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