MBA501: Analysis of Tesla's Disruptive Innovation and Leadership

This assignment provides an analysis of Tesla Motors' disruptive innovation and strategic leadership, examining both internal and external factors influencing the company's innovative capacity. It explores Tesla's organizational culture, structure, resource allocation, and human resources, while also considering external factors such as stakeholders, regulatory conditions, and market dynamics. The marketing and technology perspectives are also analyzed, focusing on customer interactions, innovation culture, and R&D efforts. Furthermore, the assignment addresses strategic leadership aspects, including leadership challenges and opportunities, and recommends strategies for improvement. The analysis incorporates various references to support the arguments and recommendations presented.

Running head: DYNAMIC STRATEGY AND DISRUPTIVE INNOVATION
Dynamic Strategy and Disruptive Innovation
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1DYNAMIC STRATEGY AND DISRUPTIVE INNOVATION
Tesla Motors has long been an innovator in the designing, manufacturing and sale of
battery electric vehicles. It was launched in the year 2003 by Marc Tarpenning and Martin
Eberhard, two American entrepreneurs in Silicon Valley. The company was formed for
developing an electric sports car. It is significantly different from any other traditional car
manufacturing companies due to the fact that Tesla’s car have state-of-the-art highly
integrated technology and that too with high economic and environmental sustainability
(Stringham, Miller and Clark 2015). It was named after Nikola Tesla, the well-known
engineer and inventor of AC and induction engines. The main objective of the company is
expediting the move to a sustainable and solar electric economy from a mine-and-burn
hydrocarbon one. At present, Elon Musk is the CEO of Tesla Inc.
From the internal perspective, it is to mention that Tesla has innovative problem solving
organisational culture. It motivates the employees for the development some profitable
solutions for the present and emerging problems in the target market. The company is highly
concerned regarding performance issues in the fields of work quality and work behaviours.
This organisational culture is employed by the company in the development of advanced
electric vehicles for solving the environmental issues faced by the automobiles that have
internal combustion engines. HR is at the top of the corporate hierarchy of Tesla Inc. The HR
management of Tesla comprises of training programs for orienting the employees for the
“First Principles” feature of the organisational culture. Employee diversity is great at Tesla
(Biggs, Bussen and Ramsey 2019). It views engagement as more than ‘nice to have’. It uses
formal and structured interviews. It is to mention that Tesla has a “Unitary-form”
organisational structure. It makes use of the organisational function as the major defining
factor. Global centralisation, global hierarchy and minimum regional divisions are the three
significant characteristics of the organisational structure of Tesla. Its main strength lies in its
systematic nature.

2DYNAMIC STRATEGY AND DISRUPTIVE INNOVATION
From the external perspective, it is to note that the CSR strategy of Tesla depends on the
business format. The important stakeholders of the firm are communities, employees,
customers, investors and the governments of the countries where it operates. The top three
shareholders of the company are the CEO Elon Musk, Jeffrey B. Straubel and Deepak Ahuja.
It is to mention that there are many initiatives taken by both the state and national
governments for encouraging manufacturing and sales of the electric vehicles (Fernandez-
Feijoo, Romero and Ruiz 2014). Operating in the seventeen different nations, the company is
subjected to different legal factors and political patters, for example, the industry is
significantly influenced by the stringent environmental protection laws that demand reduction
in the carbon footprints.
From the marketing perspective it is to mention that the customers often visit at the Tesla
stores directly. Tesla stores have moderate design philosophy with the luxuries like coffee
bars, internet stations and free international calls just like Apple. Customers are also given the
advantage of buying products through the Tesla website. It does not invest in paid advertising
but still it is successful at everything it does. However, it is recommended that it must
increase its investments for innovating its products line (Falcini and Lami 2017). It must
expand its operations into the foreign markets for exploiting global growth of renewable
energy industry. With the same, it must franchise its car dealerships to the independent car
dealing businessmen.
From the technology perspective, it is to note that Tesla is aimed at encouraging
innovation that would lead to the production of useful products for the market. Both the
growth and development of the company is dependent on the technological innovation. One
of the key elements of its organisational culture is ambitious innovative. The company
founders have adapted process and product innovation as a strategic tool for realising their
ambitious in practice. The operating and manufacturing issues too are plaguing Tesla

3DYNAMIC STRATEGY AND DISRUPTIVE INNOVATION
(Alghalith 2018). Many incidents were reported on the issue of breaking down of the auto-
driving system of Model S cars at Tesla. It has engaged into partnership with NVISIA, Dana
Holdin Corporation and Panasonic. However, it should also engage into partnerships with
other technological assistance providers and battery suppliers other than Panasonic to meet
the demands of the battery packs.
Elon Musk is a great leader. With his leadership style, the company has reached a new
level of achievement. However, still there is lacking in different segments. There is
automation related issue in the company along with shortage of result-oriented environment
and the job security in Tesla (Zeng et al., 2019). Furthermore, there have been a number of
unsatisfactory reviews from the external stakeholders of the company. In order to overcome
these, the company must use of transactional approach of leadership.

4DYNAMIC STRATEGY AND DISRUPTIVE INNOVATION
References:
Alghalith, N., 2018. TESLA: INNOVATION WITH INFORMATION
TECHNOLOGY. International Journal of Business Research and Information
Technology, 5(1), pp.37-51.
Biggs, H., Bussen, T. and Ramsey, L., 2019. Shaping the Global Leader: Fundamentals in
Culture and Behavior for Optimal Organizational Performance. Routledge.
Falcini, F. and Lami, G., 2017, October. Challenges in certification of autonomous driving
systems. In 2017 IEEE International Symposium on Software Reliability Engineering
Workshops (ISSREW) (pp. 286-293). IEEE.
Fernandez-Feijoo, B., Romero, S. and Ruiz, S., 2014. Commitment to corporate social
responsibility measured through global reporting initiative reporting: Factors affecting the
behavior of companies. Journal of Cleaner Production, 81, pp.244-254.
Stringham, E.P., Miller, J.K. and Clark, J.R., 2015. Overcoming barriers to entry in an
established industry: Tesla Motors. California Management Review, 57(4), pp.85-103.
Zeng, X., Li, M., Abd El‐Hady, D., Alshitari, W., Al‐Bogami, A.S., Lu, J. and Amine, K.,
2019. Commercialization of lithium battery technologies for electric vehicles. Advanced
Energy Materials, 9(27), p.1900161.