Stakeholder Analysis and Strategy Development Report: Tesla Motors

This report offers a comprehensive stakeholder analysis of Tesla Motors Inc., examining its vision, mission, and recent developments within the electric vehicle industry. It identifies key stakeholder groups including customers, employees, investors, communities, and government, utilizing the stakeholder view model to illustrate their interconnected relationships. The analysis delves into the behaviors, motives, and interests of each stakeholder group, highlighting their impact on Tesla's operations. Furthermore, the report details generic strategic programs for managing these stakeholders and provides specific recommendations to enhance Tesla's performance. The report covers topics such as customer preferences for technology and environmental benefits, employee innovation and adaptation, investor influence on profitability, and community focus on environmental preservation. The analysis considers the instrumental, descriptive, and normative models of stakeholder theory, emphasizing the importance of stakeholder management for Tesla's success. The report concludes with actionable strategies to improve stakeholder engagement and support the company's long-term goals.

Stakeholder Analysis and Strategy
Development Report
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Executive Summary
This report sheds light on the importance of stakeholders for meeting the targets and
objectives of the organization. The selected organization in this report is Tesla Motors Inc.
which is an American based automobile (electronic) company headquartered at Palo Alto,
California. The stakeholders view model of this organization shows five effective
shareholders namely community, customers, government, shareholders and employees who
support the business activities of the organization directly or indirectly. The stakeholder
analysis of Tesla Motors Inc. is also a point of discussion in this study. The report also
reveals the generic strategic programs for managing the stakeholders of the company and
along with that, it also includes additional recommendations of strategy to enhance the
performance of Tesla Motors Inc.
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Table of Contents
1. Introduction to Tesla Motors..................................................................................................4
2. Tesla stakeholder view of the Organization...........................................................................5
3. Stakeholder analysis for four selected stakeholder groups....................................................8
4. Stakeholder category identification and generic strategic programs for each of the four
selected stakeholders................................................................................................................10
5. Recommended strategic program for each of the four selected stakeholder groups including
the reasons for recommendations.............................................................................................13
Reference list............................................................................................................................15
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1. Introduction to Tesla Motors
Tesla Motors Inc. is an American based automobile and energy based company
headquartered at Palo Alto, California. The company serves its customers worldwide with its
specialized product - electric car, which the company manufactures through its subsidiary
SolarCity and solar panel manufacturing. The company was incorporated in the year 2003
with the purpose of serving people with electric vehicles. The mission statement of Tesla
Motors Inc. states that the common goal of the company is to speed up the transition of the
world into empirical transport. However, in the year of 2016, the CEO of the company
slightly changed the corporate mission. The new mission states that the common goal and
objective of the company is to speed up the transition of the world into empirical energy in
order to grab the opportunities of the renewable source of energy. The vision of the
organization is the creation of mesmeric car company of recent times by the transformation
into electrified vehicles. Tesla Motors Inc. is considered as a dominating player in the market
of electric vehicles, the Model S of the company is regarded as the iPhone of the automobile
industry. Hence, the recent moves of the company towards the enhancement of the capacity is
considered as a recent development which in turn, could ramp up the sales in the long run.
Tesla Motors Inc. is always successful in overcoming the challenges of the doubters, but from
last few months, the organization has faced several challenges in terms of missing the targets
of production, which has affected the financial health of the company and led the company
stand at an inflexion point. Though Tesla Motors Inc. is at a younger stage, the company has
a significant impact on the automobile industry because it influences the industry with the
electronic vehicles along with the technology and appearance. The company has impacted the
industry by linking the advancement of renewable energy and electronic vehicles.
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2. Tesla Stakeholder View of the Organization
The Stakeholder view model is viewed as a capitalism theory which emphasizes the
interconnected relationship that exists between the organization and its stakeholders
(Eskerod, and Jepsen, 2016). According to a noted scholar, the model asserts that the
organization should always focus and create values for stakeholders as well as the
shareholders (Bourne, 2016). Tesla is an automobile industry that is engaged with the
manufacturing of electric vehicles and its business activities, directly and indirectly, affects
the concern of the stakeholders. For instance, the nature and characteristics of the electronic
vehicles, batteries solar panels and many more activities concern the stakeholders of the
company. As stated in a study, the stakeholder management of Tesla Motors Inc. ensures to
maximize the benefits of the stakeholders because the company believes that the stakeholders
and the organizational activities impact each other (Andriof and Waddock, 2017). The
stakeholder view model of Tesla Motors Inc. articulates the essentiality of the stakeholder
approach to the organization and the society.
Figure 1 Stakeholder view model of Tesla, Source: Learner
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Tesla's
Stakehold
er View
model
Normative Model
Instrumental
Model
Descriptive Model

Descriptive model of shareholder view model provides the concepts of describing the
activities of the organizations that is how the organization impact the communities in the
wider term (Cooper, 2017). In other words, it can be said that the model defines the activities
of the organization as a constellation of the coordinating and cooperative interest that
enhance the intrinsic value. The stakeholder of Tesla Motors under this model is
Communities. The business activities of Telsa Motors Inc. directly concerns the satisfaction
of the communities as this particular stakeholder describes and defines the concepts of the
business. Communities are considered as a stakeholder that determines the brand image of
Tesla Motors Inc. and this group of stakeholder is satisfied through the conservation of the
natural environment. The company addresses this interest by the production of electronic
vehicles with the usage of electronic vehicles (Eskerod et al., 2015).
Instrumental model of the stakeholder view model states that the management of this
stakeholder group enables the organization in achieving the business goals like growth and
sustainability along with the profitability. This model also reveals the link between the
shareholder's group and how this group enables the organization in meeting the targets of the
business. The stakeholder's group of Tesla in this model, are customers and employees.
According to Miller et al., (2014), the customers are considered as the utmost important
stakeholder for any business. In this context, the customers of Tesla Motors Inc. generate
revenues and are affected by the quality and pricing of the electronic vehicles. In order to
address the interest of this stakeholder group, the company continuously innovates its product
range and seeks for ways to minimize the price of the product. For instance, in order to
minimize the cost of production, Tesla Motors, instead of buying the battery cells from
Panasonic, started manufacturing the battery cells in collaboration with them.
Tesla Motors Inc. believes that the employees are the factors for success in their business.
This stakeholders group enhances the performance of the company in terms of productivity
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and quality of the tech product (Miles, 2017). The company addresses the interest of this
stakeholder group by developing a compensation strategy as well as designing the learning
and development program for the development of the personnel. Along with that, the
organizational culture of Tesla Motors Inc. also motivates and encourages this stakeholder
group in performing their activities towards the attainment of business targets.
Normative model of stakeholder view model states that the stakeholder groups under this
particular model have legitimate stakes towards the corporate activities based on the interest
of such stakeholders. The stakeholder's group of Tesla Motors, under this model are
investors, shareholders and government. Tesla Motors Inc. in its infancy stage, was
completely dependent on the investors for the purpose of funding. The investors or
stakeholders of the company played a vital role in the capitalization of the company. This
group of stakeholders has legitimate stake over the activities of the organization as, they have
a potential interest in the growth and profitability of the business (Luoma 2015). In order to
address the interest of the stakeholders, the company is transforming the transportation and
energy market by allowing other organizations to use the patents of the technology so as to
enhance the market demand for automotive electric transportation. Government is considered
as an important stakeholder which provides the opportunities and requirements to the
business of Tesla Motors Inc. The interest of this stakeholder group includes the legal
compliances and the contribution of the organization to the economic welfare of the country.
The company addresses this interest through global strategic expansion and by maintaining
the sustainability record. This stakeholder group also imposes the essential requirements that
effectively influence the operational practice, To address this requirement, the approach of
operational management in Tesla Motors Inc. is aligned with this concern (Tantalo and
Priem, 2016).
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3. Stakeholder analysis for four selected stakeholder groups
According to noted scholars, stakeholder analysis is considered as a method of identifying
and recognising the pertinent stakeholders and accordingly evaluate their views and role in
the organizational activities (Doh and Quigley, 2014). The stakeholder analysis of Telsa
Motors Inc. articulates the behaviour and motive of the pertinent stakeholders who affect
directly or indirectly the activities of the organization. The stakeholder analysis of Telsa
Motors Inc. is summarized below in this table.
 Customers: The customers of the electronic automobiles are technology savvy people
who judge the electronic vehicle brands by their technology, price and quality. The
customers of Tesla Motors Inc. considers electronic vehicles as a potential option
because it helps in reducing the emission of CO2 (Taghian et al., 2015). The
customers are inclined more towards the electronic vehicles of Tesla Motors Inc.
because they are aware of the benefits of electronic vehicles that are in near future
when the fuel price will increase. In order to deal with that, electronic vehicles are
preferred options. The technology of the electronic vehicle of Tesla Motors Inc. is
also considered as a factor that induces the behaviour of the customers. Tesla Motors
Inc. utilizes the technology of third generation battery and allows customers to use the
autopilot system. The motive behind the shift of the customers from traditional
automobile system to electrical vehicles is to utilise the technology of automation.
Along with that, the electronic vehicles of Tesla Motors Inc. are economical and
considered as a safe option because it protects the environment from toxic emissions.
The models of electric vehicles of Tesla Motors Inc. are economical compared to the
other gasoline vehicles. All these factors induce the customers to rely on Tesla Motors
Inc. for electronic vehicles.
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 Employees: The employees of Tesla Motors Inc. are empowered to take the decisions
which are considered as an ideal solution for business innovation. Employees of Tesla
Motors Inc. continuously search for the ways of innovation that entail the growth and
demand of electronic vehicles of Tesla Motors Inc. in the global market. The main
motive of the employees of this organization is to continuously innovate new
technologies and align the personal objectives with the organizational objectives. The
employees of Tesla Motors Inc. opt for compensation benefits by supporting
continuous innovation. The employees of this organization perform the assigned tasks
in such a way that in turn enhances the productivity of the business (Erdiaw et al.,
2017). The employees of this organization are adaptive in nature, they consider
innovation and change management as a part of the business and also enhance their
skills through the learning and development programs. The organizational culture of
Tesla Motors Inc. supports this behaviour of the employees and continuously
encourages and guides the workforce of the organization for improving their
efficiency. This effective support and guidance enhances their performance and also
boosts morale.
 Investors or shareholders: The shareholders of Tesla Motors Inc. are considered as
one of the most important stakeholders because they provide funds to the business.
The profitability and growth of the business of Tesla Motors Inc. affect these
stakeholder groups. The investors and shareholders of the company always intervene
in the generic competitive strategies and the growth strategies of the business with a
motive of enhancing the profitability and sustainability of the business (Magill et al.,
2015). The profitability of the business will enhance their return on investment and in
order to improve the percentage of return on investment, they intervene in the
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management decisions. These stakeholders have legitimate stakes over the corporate
activities of Tesla Motors Inc.
 Communities: The communities of Tesla Motors Inc. considers the preservation of
the natural environment and support the environment-friendly product initiative. The
main motive of this stakeholder group is to benefit society with advanced technology
that does not support hazardous emissions. The community of Tesla Motors Inc.
demands the promotion of electronic vehicles by utilizing the advanced technology of
renewable energy (Schepper et al., 2014).
4. Stakeholder category identification and generic strategic programs for each of the
four selected stakeholders.
In this era of technological advancement and globalization, the automobile companies,
especially electronic automobile companies; are facing competition in terms of technology
and maintaining the relationship with the stakeholders. In this context, the generic
stakeholder’s strategy recognizes the importance of the stakeholders in the organization. The
generic strategic program of Tesla Motors Inc. is discussed in this following section.
Strategy 1- Involvement Strategy
The Involvement strategy is implied to the supportive stakeholders who successfully back the
organizational activities in order to meet the business targets. The supportive stakeholders of
Tesla Motors Inc. are the employees or the whole workforce of the organization. The
involvement strategy states that the supportive stakeholders of Tesla Motors Inc., that is; the
employees should be involved in the pertinent issues of the organization. Tesla Motors Inc.
emphasize in this strategy because the company believes that the involvement or the
engagement of the workforce in the managerial issues enhances their performance because
they can feel the belongingness to the company (Mok et al., 2015). Tesla Motors Inc. focuses
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on this strategy because the employees support the innovation of technology in the
organization and hence, their involvement in developing the strategy for the business is
considered as a successful factor for the company (Henisz et al., 2014).
Strategy 2- Monitoring Strategy
According to Heitel et al., (2015), the monitoring strategy is implied to the marginal
shareholders who possibly have the legitimate stake on the organizational activities of Tesla
Motors Inc. The marginal stakeholders of this organization is concerned with certain issues
like profitability, growth and sustainability in order to enhance their return from investment,
which could be the higher management, investors and so on. The monitoring strategy
identifies the interest of the marginal stakeholders of Tesla Motors Inc. and accordingly,
utilizes the resources of the company to maximize their utility. The monitoring strategy
involves the identification of the needs and the interest if these stakeholders and then
accordingly devising the corporate strategy that maximizes their return (Fetterman et al.,
2014). The monitoring strategy of Tesla Motors Inc. focuses on the growth of the business by
meeting the targets efficiently.
Strategy 3- Defensive Strategy
The defensive strategy is for the non-supportive stakeholders of Tesla Motors Inc. who are on
high-risk potential and low cooperative in nature. The typical non- supportive stakeholder for
Tesla Motors Inc. is the communities. This type of stakeholders are well managed by the
approach of defensive strategy (Grant, 2016). The strategy states that Tesla Motors Inc.
should reduce the dependence on this stakeholders that is in other words it can be said that
the company should focus only on the environment friendly vehicles at minimum cost in
order to address the interest of this stakeholder group. The best example of this strategy is, in
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the year of 2014, the CEO of Tesla Motors Inc. Elon Musk allowed other electric vehicles
company to use their technological patents in order to produce CO2 emission free vehicles.
Strategy 4 - Collaborative Strategy
The collaborative strategy addresses the mixed blessings stakeholders of Tesla Motors Inc.
The potential of threat and cooperation is equally high for this type of stakeholders. The
customers of Tesla Motors Inc. are considered as a mixed blessed stakeholders because they
can either turn out into a supportive stakeholders or can be non- supportive stakeholders
which indicates their typology in the business. The dimensions of this stakeholders are
extremely high and low. So, in order to manage this stakeholder group, the collaborative
approach is adopted by Tesla Motors Inc. The customers of Tesla Motors Inc. are managed in
a collaborative way, that is; the company values their customers and also arranges interactive
sessions with customers in order to understand their insight and then accordingly, develop the
strategy for the business (Rothaermel, 2015). The effective collaborative strategy of Tesla
Motors Inc. enabled the company to turn this stakeholders as a supportive stakeholders.
STAKEHOLDER TYPE 4 -MIXED
BLESSING (High stakeholders potential
for threat – High stakeholders potential
for cooperation)
Strategy: COLLABORATE STRATEGY
?
STAKEHOLDER TYPE 1-
SUPPORTIVE ( Low stakeholders
potential for threat – High stakeholders
potential for cooperation)
Strategy: INVOLVEMENT STRATEGY
STAKEHOLDER TYPE 3-
STAKEHOLDER TYPE 2- MARGINAL
(Low stakeholders potential for threat –
Low stakeholders potential for
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