BBM311: Tesla's Entrepreneurial Performance, Culture & Strategy

This report provides a detailed analysis of Tesla's corporate entrepreneurship, evaluating the company's operations from an entrepreneurial perspective. It identifies innovative, risk-taking, and proactive elements within Tesla's business processes, aligning them with key characteristics of entrepreneurial ventures. The report examines Tesla's market orientation, resource allocation, organizational structure, and culture, highlighting the role of leadership, particularly Elon Musk, in driving innovation. It further critiques employee evaluation and reward systems, hiring practices, communication effectiveness, and the company's approach to change and failure. The analysis identifies both strengths and weaknesses in Tesla's internal management, culminating in recommendations to enhance the company's entrepreneurial performance. This document is available on Desklib, where students can find a wealth of solved assignments and past papers.

Running head: CORPORATE ENTREPRENEURSHIP
Corporate entrepreneurship
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Executive summary
The aim of this report is to discuss about the entrepreneurial prospects of Tesla. In doing so, this
report have considered a number of factors including the corporate environment, human
resources, corporate strategy, organizational culture, and company structure. Determination of
these factors helped in identifying the similarities and differences between the entrepreneurial
venture and the business operation of Tesla. It is identified in this report that majority of the
elements of the business of Tesla are getting matched with that of the characteristics of
entrepreneurial venture. On the other hand, this report also discussed about the market
orientations of Tesla in their business operation and it is identified that Tesla is having high level
of market orientation, which is further helping them in focusing on customer oriented products.
The resource allocation process of Tesla is also analyzed in this report. In addition, the existing
organizational structure and culture of Tesla and the extent to which they are effective are being
analyzed. It is identified that the top two designations of Tesla including their CEO Elon Musk
are the top innovations of the company. The major reasons behind this are discussed in this
report. There are few challenges being faced by Tesla identified in this report and a few
recommended steps are discussed accordingly.

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Table of Contents
1.0 Introduction................................................................................................................................3
2.0 Identification of the innovative nature of Tesla.........................................................................4
3.0 Identification of the risk taking nature of Tesla.........................................................................5
4.0 Identification of proactive nature of Tesla.............................................................................5
5.0 Identification of entrepreneurship intensity of Tesla.................................................................6
6.0 Innovation goals of Tesla...........................................................................................................7
7.0 Market orientation of Tesla.......................................................................................................8
8.0 Evaluation of allocation of resources........................................................................................9
8.1 Identification of the critical resources...................................................................................9
9.0 Identification of strategic resources.........................................................................................10
10.0 Entrepreneurial personality traits...........................................................................................11
11.0 Identification of management style.......................................................................................11
12.0 Structure of Tesla...................................................................................................................12
13.1 Effect on entrepreneurship.....................................................................................................13
13.2Organizational structure role in promoting innovation..........................................................13
14.0 Functional areas in creating new products, services & processes.........................................13
15.0 Evaluation of organizational control system (tight or loose).................................................14
15.1 “slack” to support entrepreneurial initiative..........................................................................14
15.2 Examples of controls that support or hinder entrepreneurship..............................................14

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16.0 Critique of employee evaluation and rewards system...........................................................15
16.1 Role of Appraisal and reward systems in encouraging entrepreneurial behaviour...............16
16.2 Awards provided by Tesla to their employees......................................................................16
17.0 Examine the hiring practices of the firm from an entrepreneurial perspective.....................16
18.0 Open communication in Tesla. Can anybody communicate with anybody? How
efficiently?.....................................................................................................................................17
19.0 Organizational culture of Tesla and key values.....................................................................17
20.1 Reinforcement and evaluation of organizational culture and its role in entrepreneurship....19
21.0 Bureaucracy of Tesla in terms of policies and procedures, approval cycles, and speed in
decision-making.............................................................................................................................19
22.0 People feelings about change.................................................................................................20
3.0 Tolerance of failure and ways..................................................................................................20
23.1 Learning from failures.......................................................................................................20
24.0 Sense of urgency in Tesla......................................................................................................21
24.1 Ways of reinforcing urgency.............................................................................................21
25.0 Most and Least entrepreneurial department in Tesla.............................................................22
26.0 Innovative champions of Tesla..............................................................................................22
27.0 Entrepreneurial thing of Tesla...............................................................................................24
28.0 Major problem areas of Tesla................................................................................................25
29.0 Conclusion.............................................................................................................................26

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30.0 Reference...............................................................................................................................27

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1.0 Introduction
Entrepreneurship is one of the major factors being considered by the contemporary
business organizations in their business operation. This is due to the reason that in the current
time, elements of the entrepreneurship helps the business organizations in gaining competitive
advantages. In addition, in the current business scenario, innovation is being given the maximum
preferences and concentration. These can be achieved by initiating the entrepreneurship approach
in the business operation (Mcluskie 2017). However, on the other hand, it is also to be
considered that there are number of determining factors being present, which are having
influence on the effectiveness of entrepreneurship. Thus, it is important for the business
organizations to have the idea about these factors and how to deal with it. Some of these factors
are corporate strategy, performance, human resources and external business environments.
Effective management of these factors will ensure that business organizations are having
entrepreneurship approach in place (Galindo and Mendez 2014).
In the recent time, Tesla positioned itself as one of the leading firms initiating disruptive
technologies in the market. They are known for their unique and innovative approaches in the
industry and disrupted the entire global automobile market (Tesla.com 2018). In addition, they
also solidified the fact that any new entrepreneurship ventures can succeed in the highly
competitive market just with the help of innovative approaches. However, in order to analyze the
entrepreneurship approach of Tesla, it is important to determine the internal management factors
and how they are coordinating and contributing in the organizational success.
This report will discuss about the different internal factors of Tesla, which are helping
them in their entrepreneurship venture. In addition, this report will also discuss about the

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organizational culture, management style and human resource strategies of Tesla in more
specific manner. On the other hand, this report will try to identify the major negative factors in
the internal management of Tesla and will recommend a few steps that will further help them in
enhancing their business potentiality.
2.0 Identification of the innovative nature of Tesla
The entrepreneurship approach of Tesla can be considered as innovative due to the reason
that the entire business process of them is based on innovation. One of the prime examples of
their innovation is in the form of their product strategy. This is due to the reason that the
products being introduced by them in their initial stage are one of the kinds. The first vehicular
product for Tesla is Model S, which is a pure electric car having the capacity of high
performance and long range. This can be termed as innovative due to the reason that Model S
was first launched in 2012 when the electric mobility had not gained exposure in the market
(Christensen, Raynor and McDonald 2015). In addition, the technology being used by them
including the floor mounted battery and autopilot feature are innovative in nature. On the other
hand, it is also reported that Tesla is innovative in terms of their managerial scope also. This is
due to the reason that employees of Tesla are being considered as shareholder and owner of the
company rather than just being a salaried people. This is innovative due to the reason that this
approach is one of the kinds in the industry.
In terms of generation of revenue and business model also, innovation is quite evident in
the process of Tesla. This is due to the reason that unlike the major large organizations, Tesla
initiated their businesses without being a public organization and they have taken a funnel
approach in accumulating fund for their future sustainability. According to their business model,

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model S and model X were first launched by Tesla in the market, which commands high sticker
price and they are targeted to the upper section of the customers. Hence, commanding an extra
price for the innovative and one of the kind products helped Tesla in having more profitability
per unit (Schulze, Paul MacDuffie and Taube 2015). This extra fund was used by them for
developing more mass market cars such as model 3. Thus, they gained extra fund from their
niche products and introduced mass market and affordable products for increasing the sales
volume in the further stage. This approach of Tesla can also be considered as innovative and
unique over the existing business models being followed by other automakers.
3.0 Identification of the risk taking nature of Tesla
Apart from their innovative nature, risk taking nature is also relevant in the business
process of Tesla. This is due to the reason that the practices being followed by them are all
involved risks. One of their most risk taking approaches is introduction of the electric vehicles.
This can be termed as risk taking approach due to the reason that prior to the introduction of
model S by Tesla, there are number of electric vehicles being introduced by other automakers in
the market, which were not successful (Hardman, Shiu and Steinberger-Wickens 2015). Thus,
Tesla played a gamble in introducing the pure electric vehicles and entirely designed their
organizational approach over the electric vehicles. Another risk taking approach of Tesla is
targeting the niche market by offering high end electric vehicles. Prior to these, a number of
electric vehicles are offered for different customer segments. Thus, initiating electric vehicles in
the higher customer segments is one of the most risk taking approaches of Tesla.
4.0 Identification of proactive nature of Tesla

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Tesla is one of the most proactive automakers in the current business scenario. One of the
major examples for them is initiating the business of manufacturing batteries for the electric
vehicles. Prior to the launching of motor vehicle division, Tesla made their name in
manufacturing of car batteries (Chen and Perez 2018). This can be considered as proactive due to
the reason that Tesla had the vision of future potentiality of electric mobility over their
competitors. The business tagline of Tesla states that electric mobility is the future. This shows
the determination and strong proactive nature of them in identifying the future business trends.
Therefore, it can be concluded that Tesla can be termed as innovative, risk taking and proactive
similar to the characteristics of entrepreneurship ventures.
5.0 Identification of entrepreneurship intensity of Tesla
There are number of elements being identified that acts as the differentiating factors
between an entrepreneurship venture and the organizations. Thus, evaluating the business
process of Tesla with that of the characteristics of entrepreneurship will help in determining the
entrepreneurship intensity of Tesla (Stringham, Miller and Clark 2015). One of the major
characteristics of entrepreneurship is motivation level of the business owners. This is important
due to the reason that in the case of the entrepreneurship, the number of the internal stakeholder
is less and thus it is the business owners who will lead the venture in positive manner. In the case
of Tesla, their founder Elon Musk is one of the most well known personalities in the business
scenario in the world and it is his vision, which resulted in incorporation of Tesla and SpaceX
(Weick and Jain 2014). In addition, the disruptive technologies and the new definition of what a
car can do is the result of positive motivation and vision of Elon Musk.

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It is also being reported that employees of Tesla are being given the added focus and each
of their issues are being seen by Musk himself. He always states that innovation is the key to
success in the modern time and motivates his employees in similar manner. This is resulting in
having innovative approach of Tesla. Thus, it can be concluded that this characteristic of
entrepreneurship is well aligned with business processes of Tesla. Another major characteristic
of entrepreneurship is risk tolerance, which refers to the degree to which the venture is ready to
take risk (Galateanu and Avasilcai 2016). As discussed in the above section, Tesla is one of the
most risk taking automakers in the current time in terms of their business strategies. Thus, this
characteristic of entrepreneurship venture is getting matched with that of Tesla. Another
characteristic of entrepreneurship venture is effective determination of future needs in the
market. This refers to the policy of determining the future business state of affairs effectively. In
the case of Tesla, they have effectively determined the future business potentiality of electric
vehicles and designed their business approaches accordingly. This helped Tesla in having the
early mover advantage in the market of electric mobility (Ivanov 2015).
Entrepreneurship venture should also have a contribution culture in place, which refers to
the fact that they should be open-minded in having sustainable growth of the entire market and
industry. In addition, they should also be well adhered to the value creation of all their
stakeholders including the customers. In the case of Tesla, Elon Musk made it clear that he can
share the technology of the electric mobility with their competitors (Tidd 2014). This is in
accordance to their vision of transforming the existing scenario of transportation in the world
over just gaining profits. This also denotes that contribution culture is being followed in Tesla
and it can be concluded that the entrepreneurship intensity in Tesla is high.
6.0 Innovation goals of Tesla

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 The key goal of Tesla is to change the existing automotive scenario in the world and
making it more sustainable and pollution free.
 Another major innovation goal of Tesla is to make the newest and sustainable
technologies well available to the people irrespective of their income levels. Thus, they
target to have higher market penetration of their technologies in the market.
 The last innovation goal of Tesla is to change the common perception around the electric
vehicles. This is due to the reason that currently electric cars are being seen as less viable
and practical compared to the gasoline charged vehicles. Thus, Tesla targets to change
this perception and put the electric vehicles at par of the conventional vehicles.
7.0 Market orientation of Tesla
Market orientation of Tesla can be determined by how they have offered products
according to the external needs and requirements of the customers. Even though, the customers
are not having the urgent need for electric cars as of now but it is the need of the society and
environment. This is due to the reason that conventional vehicles are polluting and causing
environmental issues. In addition, this shortage of non-renewable sources of fuel is also
contributing in having the need for alternative sources (Cahill et al. 2015). In this case, the
products of Tesla are well oriented to the external needs and providing a cleaner alternative over
the conventional vehicles. Furthermore, Tesla is targeting the higher end market for their model
S and model X vehicles and it is important to over features according to the taste and preference
pattern of the targeted customers. It is reported that premium cars of Tesla are all performance
oriented and they offer premium features over their conventional competitors (Wieland, Vargo
and Akaka 2016). This is also justifying the fact market orientation is high in Tesla.

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Marketing orientation of Tesla is well evident in their product and business strategy. This
is due to the reason that Tesla was not having nay mass market cars for the middle income
customer segments. Thus, they have introduced Model 3 as a more affordable alternative to their
premium products. This product is mainly aimed for the middle income customer segments and
accordance to their preference and requirement pattern, features are being offered. In terms of the
communication with the customers, Elon Musk is one of the most active CEOs in the world in
the social media (Liu and Meng 2017). There are number of instances where the consumers of
Tesla communicated with Musk directly through social media and got their queries resolved.
Thus, market orientation of Tesla is high and their business processes are all market driven.
8.0 Evaluation of allocation of resources
Tesla is having smaller business operation as compared to their conventional automakers
due to being a new entrant in the market and having lower presence in the global scenario. Thus,
the allocation of the resources is also much intensive compared to their rivals. It is identified that
allocation of resources is effective and favorable in Tesla with having all the requirements of the
employees being fulfilled (Schmidt and van der Rhee 2014). In addition, the state of art facilities
of them is further equipping the employees in supporting their entrepreneurial behavior. In
addition, Tesla recently went public and thus funding sources are no more an issue for them. As
discussed in the previous section, employees of Tesla are considered as owners and they are
given autonomy in their job profile. Thus, the resources are being allocated in such way that the
autonomy of the employees can be maintained.
8.1 Identification of the critical resources