An Analysis of Tesla Company's HR Strategies and Performance

This report provides a comprehensive analysis of the HR strategies employed by Tesla Company. It explores the critical role of HR strategies in aligning with corporate goals, particularly in a competitive market. The report examines Tesla's implementation of diversification and differentiation strategies, focusing on talent acquisition through internships and employee training for enhanced efficiency and customer service. It also delves into the organizational structure and the challenges faced by Tesla, such as brand reputation and sales issues. The analysis highlights how Tesla integrates HR strategies at the departmental level to achieve its objectives and offers recommendations for future improvements, emphasizing the importance of aligning HR practices with overall business goals to ensure sustained success in the market.

Tesla Company

Tesla Company
Tesla Company HR Strategies
It has been analyzed that HR strategies has an important role in the overall growth of the
organization. In this paper, the critical discussion will be made on the concept of “HR Strategy”.
The company selected for the paper is Tesla Company. It can be said that it is a good idea to
embed HR strategies with the corporate strategies as it helps in managing the overall activities of
the company.
In the present era, the HR tends to have a reactive role in corporate planning process.
Also with the changing scenario, aligning the HR strategies with the corporate strategies has an
essential role in competing with the other companies present in the competitive business
environment. There are many competitors who are targeting the same customer base and also
trying the sell the similar products in the market. So, to attain the goals the company requires
focusing on employing and retaining the best human resources. There are three strategies which
the companies generally consider it at the time of competing in the single market (Bratton &
Gold, 2017).
One of the strategies is related with the growth strategy in which the company can easily
focus on the niche factor and can expand in the particular market. But it is analyzed that it is a
challenge for the HR managers in terms of recruiting and training the qualified employees who
will help in controlling the activities. In this case, the higher authorities will consult with the HR
team to ensure that the large number of the qualified employees can be attracted and trained or
not (Noe, Hollenbeck, Gerhart & Wright, 2017).
At the time of mergers and acquisition, it is examined that the challenge for the HR
managers is to determine that how to merge the two workforces with the integrated unit. The
issue can take place in relation of the two firms who are considering the different HR
philosophies such as training practice and promotional policies. It is the duty of the HR decision
makers to decide which practice can be considered and which should eliminated (Brewster,
2017).
The next strategy can be related with diversification strategy in which the emphasis is on
the particular market and diversification is the popular approach to the corporate strategy. The
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company who considers this strategy has to make the decisions to operate the different
businesses. Diversification can also be done in two ways which are related and unrelated. There
are many businesses that are considered by the companies and they are related with each other in
some way and this strategy can be considered as diversification. The market for the business can
be similar to the company can develop the uniform process related with selection and
compensation. Also, there are many companies who decide to enhance its products that are
unrelated to the current products. This approach can be related with unrelated diversification. In
relation to this strategy, the main aim of the company is to shield the effects such as business
cycles and economic fluctuations (Chen & Perez, 2018).
Differentiation is also the strategy that helps to create an image or the reputation for the
products and services apart from the different competitors. The differentiating factor can be real
such as product design. So, it can be examined that company can differentiate its services or the
products and can set high prices to boost the profit margins (Kompalla, Kopia & Tigu, 2016).
The best examples of the companies can be of BMW and ROLEX who considered the
differentiation strategy and are successful in the market. The role of the HR managers is to
recruit and train the employees who can give their best towards the activities. In this case, the
employee training can improve the quality and also the reward system to boost employee’s
performance. So, it can be stated that it is a good idea to embed HR strategies with the corporate
strategies as it helps to boost the growth opportunities (Shaukat, Qiu & Trojanowski, 2016).
The HR strategies considered by the TESLA COMPANY are diversification strategy and
differentiation strategy. It has been investigated that one of the HR strategy considered by Tesla
is recruiting the fresh talent and it is done by the company through internships. Tesla offers year
round internships at the office location. In this the employees are motivated towards solving the
difficult situations in the production line (Tesla, 2019).
It helps to boost the knowledge of the interns and through this the company also focuses
on the corporate strategy which relates with differentiation of the products and service. By hiring
the new talent it is easy for the company to enhance the innovative ideas in the workplace.
According to the Boston consulting group 13th annual report, it has been defined that Tesla is one
of the innovative companies and has 9th rankings. So, this states that company embedded the HR
strategy with the corporate strategy to attain growth in the market (Alvarez, 2019).
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(SOURCE: Alvarez, 2019).
The HR strategy of the company also focuses on maintaining the efficiency through
training and development. The HR management trains the employees so that it could be easy for
them to deal with the clients. This strategy focused on the corporate strategy related to
enhancement in the profits. The current strategy of the company is concerned with combining the
sales with the service centers. Tesla has opened the service centers which positively affected the
demand of the customers. The name of the service center is “SERVICE PLUS”. There are also
trained mobile technicians who area available for home service facility. These employees are
known as the Tesla Rangers. This strategy has helped to boost the overall sales of the company
in the competitive market which is one of the major corporate strategies of Tesla Company
(Akakpo, Gyasi, Oduro & Akpabot, 2019).
It can be said that the company can implement their HR strategies at the department level
by emphasizing on the different groups and structuring of the organization. Tesla has U-FORM
of the organizational structure. In this the company has a structural group of employees for
engineering and another sales and services. In relation to this, it can be seen that company can
implement training and development strategy for sales and service team of the employees. They
can offer training to the new employees who started to work for the company. The corporate
structure of Tesla is the function based hierarchy in which there are functional teams and offices
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Tesla Company
who oversee domestic and international activities. For example: There is sales teams who
focusing on boosting the sales of the company. The HR strategy that can be implemented can
relate with recruiting the fresh talent. For sales, the company should focus on the employees who
have good command over the language. So, in this way the HR strategy can be implemented
within the specific departments of the company (Dutta, 2019).
There are various challenges that are faced by the company. One of the challenges which
took place in 2019 relates with the blocked sales of MODEL 3 cars in China. It is analyzed that
China has temporarily blocked the sales of Model 3 cars in March only because of different
irregularities. The major reason behind it relates with the absence of the labels on the brake fluid
tanks and incorrect labels about the motor capacity (Business insider, 2019). To resolve this
challenge, the company should focus on proper labeling on the brake fluids tanks. It is important
to label the products properly to maintain the brand image of the company, so the same should be
done by the company. Proper rules and policies should be implemented by the company before
introducing the product in the market.
The other challenge faced by Tesla concerned with the downfall of reputation. The
company has dropped from 3rd position to 42nd in the poll done on Brand reputation and poll was
conducted by AXIOS and HARRIS. Tesla has been ranked behind Honda and Toyota (Business
insider, 2019). So, to build the brand reputation it is recommended that the company should
focus on giving training to the employees so that customer service can be improved. This will
help in maximizing the customer satisfaction and also boost the brand reputation in the market.
It is concluded that it is important for the company to consider the HR strategies so that it
could be easy to maintain the large customer base. There are various HR strategies that should be
embedded with corporate strategies such as diversification and differentiation. Tesla has also
considered the HR strategy that affected the corporate strategy related to innovation. Also,
company focused on training and development to boost the profits of the company. It has been
analyzed that there are various challenges faced by the company such as negative impact on
brand reputation and blocked sales of MODEL 3 cars in China. So, it is important for the
company to focus on setting up the rules and regulation before introducing the products in the
market and also training should be given to boost customer satisfaction. Therefore, it can be
stated that these strategies should be considered to achieve success in the market.
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References
Akakpo, A., Gyasi, E. A., Oduro, B., & Akpabot, S. (2019). Foresight, organization policies and
management strategies in electric vehicle technology advances at Tesla. In Futures
Thinking and Organizational Policy (pp. 57-69). Palgrave Macmillan, Cham.
Alvarez, S. (2019). Tesla is one of the world’s Most Innovative Companies, says noted
consulting firm. Retrived from: https://www.teslarati.com/tesla-most-innovative-
companies-in-2019-ranking/
Bratton, J., & Gold, J. (2017). Human resource management: theory and practice. Palgrave.
Brewster, C. (2017). The integration of human resource management and corporate strategy.
In Policy and practice in European human resource management (pp. 22-35). Routledge.
Business insider. (2019). Tesla is having another chaotic year - these are the biggest challenges
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2019/Additional-cost-cutting-measures/slideshow/68537866.cms
Chen, Y., & Perez, Y. (2018). Business model design: lessons learned from Tesla Motors.
In Towards a Sustainable Economy (pp. 53-69). Springer, Cham.
Dutta, A. (2019).A Deep Dive Into Tesla Business Strategy. Retrived from:
https://www.feedough.com/tesla-business-strategy-and-business-model/.
Kompalla, A., Kopia, J., & Tigu, G. (2016). Limitations of business strategies and management
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Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2017). Human resource
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Shaukat, A., Qiu, Y., & Trojanowski, G. (2016). Board attributes, corporate social responsibility
strategy, and corporate environmental and social performance. Journal of Business
Ethics, 135(3), 569-585.
Tesla. (2019). Internships & Co-Ops. Retrived from: https://www.tesla.com/careers/students
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