Discuss about the Culture and Organization for Tesla Motors.
Organizational culture impacts functioning and internal environment for every organization (Caligiuri, 2006). Scope of developing a proactive organizational culture is immense and leadership plays an imminent role in developing and supporting such organizational cultural dynamics. The scope of current report addresses leadership style of Elon Reeve Musk, CEO Tesla Motors in accordance to CLTs Global Dimensions of Leadership. Thus, the discussion pertains to leadership values that have led to transforming the current organizational culture. The existing organizational cultural framework in Tesla Motors that has been conducive to the current leadership. Analysis of issues and practices that let to adopting the Global Dimensions of Cultural Framework.
Tesla Motors, an American automobile manufacturer and energy storage company was established in 2003 (Motors, About Tesla. About Tesla., 2015). The company is co-founded by Elon Musk, Marc Tarpenning, Martin Eberhard, JB Straubel and Ian Wright. The company manufactures electric cars, their powertrain components and battery charging equipment. The company is headquartered at Palo Alto, California in U.S. The company has as global customer base and Elon Musk is its current CEO. The company employs around 30,000 employees and attained fame in its production of the Tesla Roadster, being the first electric sports car. The company had a series of launches posts that and its second vehicle being an electric luxury sedan, Model S. The company has been making landmark sales from its introduction of various vehicles and crossed 150,000 units’ global sales.
Elon Musk is an engineer cum inventor and a South African born Canadian-American business investor (Beechler, 2007). He co-founded Tesla Motors and fathered several innovative products for the company. Tesla Motors initially incorporated by Martin Eberhard and Marc Tarpenning was later co-founded and taken by Musk post financial crisis of the company in 2008. Musk took over in the leadership position of the company as a CEO and product architect. With his vision and hard work Tesla Motors is on a tremendous roads to prosperity and innovation. It is a market leader with very few competitors in the segment. Shareholders are always taken by surprise by the innovative and new dimensions provided by Musk to the company (Bolden, 2006).
The scope of the report analysis the impact of organizational culture transformation that took place after Elon Musk joined and took over leadership position in the company. In the initial years of incorporation of the company Martin Eberhard and Marc Tarpenning financed the company. Then Series A round of funding was initiated in which Musk led as he had joined in as Chairman and had certain operational roles. He became the controlling investor from the first round of funding as he had invested a lot of personal funds into the business amounting to USD$7.5 million (Eberhard, 2006). Tesla was established with an aim to commercialize electric vehicle with launching of sports car and then transforming into manufacturing mainstream vehicles as sedans, affordable compacts for mass markets. The company was successful in picking up orders by signing production contracts with Group Lots.
In Series B investments also Musk led the investment and in its third round it attracted entrepreneurs as Google founders Sergey Brin and Larry Page. With high amounts of investments brought in from such rounds the company was ready to innovate and march ahead. In spite of such high investments Musk highlights there was need in the company to reduce workforce to 10% due to employee burnout factors (Frey, 2011). Post 2008 when Musk assumed CEO at Tesla Motors he removed 25% of its employees and added another round of financing to save the company from bankruptcy. The year 2009 sw a series of landmark event for the company as US$187 million was raised where Musk had a significant contribution. With prototype Model S was displayed at a press conference that attracted Germany’s Dailmer AG for investment of US$ 50 million also Toyota invested significant amount similar to Dailmer AG.
Elon Musk played a dramatically transformative role in Tesla Motors by time and again saving the company from bankruptcy (Bird, 2010). He has been ever since been actively innovating and devising ways and means by which the company can perform and establish a sustainable future. Hence the report analyses the transformation into organizational culture brought about by Musk through his series of endeavors and commitment to organizational goals.
Leadership has a complex structure and encompasses a wider range of variables that are utilized in managing of organizations. While various predominant management and leadership theories are existent the most applicable concept that has been adopted for the purpose of the study is Global Dimensions of Leadership, which is culturally endorsed implicit Leadership (CLT) that encompasses various dimensions of culture across globalization (Hardman, 2015). As Tesla Motors have a globalized customer as well as shareholder base, this is the most appropriate leadership style that is incorporated by Musk. Various other leadership framework are present that can be adopted in an organizational culture as Lewin’s Leadership Styles, that provided multiple approached for autocratic leaders, democratic leaders and laissez-faire. The Blake-Mouton Managerial Grid is a task-oriented and people-oriented style of leadership. Path-goal Theory which is a specific leadership style focused on completing a specific task. Flamholtz and Randle’s Leadership Style Matrix that is based on capability of people. It is divided into four quadrants and then identifies possible leadership style. Then there are specific leadership style as transformational and servant style of leadership (Morrish, 2010). The above styles of leadership is specific to a context and is one-dimensional in nature as it caters to a either being people oriented or tasks oriented. None of the approaches to leadership encompasses the cultural and globalization aspect. As in case of CLT where the cultural dimensions are added in order to arrive at leadership style followed by CEO of Tesla Motors. As the company has various shareholders from various countries and ethnic backgrounds this style of leadership will benefit the company and will be applicable to Elon Musk, who is the current CEO of the company. Characteristics of Musk can be matched against traits found in CLT Dimensions and overrides all other leadership theories or concepts. Musk is an extremely dynamic leader who has competencies in global cultures and has been able to convince and mold various companies across the world to invest in Tesla Motors. His skills in various rounds of investment in the company have been significant in saving the company from running into bankruptcy (Osland, 2006).
Leadership framework are developed and employed in organizations such that they can cater to organizational needs of meeting its goals and objectives. There are various forms of leadership styles and methods for understanding leadership traits. The most applicable leadership that has been selected for the purpose of analysis of the report is Global Leadership (Von Krogh, 2012). Global Leadership consists of an interdisciplinary study that encompasses key elements amongst leaders such that they utilize their personal experiences for familiarizing with physiological, geographical, geopolitical, psychological and anthropological as well as sociological impacts from globalization. The scope of Global leadership is most applicable when an individual aims to collaborate efforts with various stakeholders in spite of environmental complexities with a vision to leverage global mindset. Trends that impact business as colonialism, mass media, innovation and other factors also affect humans in their business design and other aspects. The inbuilt talents amongst individuals will help navigate the various diverse issues and arrive at business decisions with focus on globalization (Özsomer, 2008). Thus, while operating on a global platform there is immense impact of cross cultural predominance that impact business decisions amongst other variables.
Careful examination of skills required to manage cross-cultural traits and behaviors amongst individuals reflected that there are 40 parameters. Geert Hofstede’s made significant contribution to the field, by studying cultural parameters across 70 countries and boiled down to six different cultural parameters that can be used to lead, design and manage an entire organization culture effectively. After his diagnosing of the several different cultural parameters, the GLOBE Leadership and Organizational Behavior Effectiveness Research took over the works of Hofstede’s (Luque). The study formed and grouped various different cultural data and put them in groups according to countries that had certain similarities. Thus, the Globe competency was formed. This consecutive developments led to the establishment of Culturally endorsed implicit leadership (CLT) based on certain values. Thus, incorporating globalization that changes rapidly conduct of organizations the values and features that were ascertained are charismatic or value based, team oriented, self-protective, participative, human orientation and autonomous. By incorporating in these leadership traits or values it became easier to serve the world (Hockerts, 2010). The values of leadership can be discussed as;
Charismatic or value based: This is a dimension based on integrity, being performance oriented, decisiveness, visionary, inspirational and being self-sacrificing (Crossan, 2010). This type of leaders can become autocratic and in commanding position. Thus, these leaders are capable of influencing the entire team of individuals easily by their inspirations and in-built visions that drive the entire organization.
Team Oriented: This type of leaders is diplomatic, team collaborated, administratively competent and integrative by nature. In case of a toxic leader he would easily malevolent alienating team in order to drive cohesion. The focus of these of leaders is on their team and hence they drive changes or incorporate any vision with dynamic team performances by collaborating with them.
Self-protective: Leaders in this case are generally self-centered by nature and face-saving (Musyoki, 2016). They indulge in procedural behavior that can easily introduce conflicts by being conscious of status. Being over protective regarding their status, though they indulge in team work but rarely involves themselves in the conduct for their teams.
Participative: Leaders in this domain are well-known for being extremely participative behavior to support the entire team of individuals for goal attainment. Leader’s of this type generally indulge in active decision making by involving in feedback systems and team conduct (Kessler, 2015).
Human orientation: Leader’s of this characteristics are modest and have tremendous compassion for their job role in an altruistic behavior.
Autonomous: This type of leaders is capable of functioning without any consultations or advice from anyone (Davies, 2006).
These Global dimensions of culturally implicit leadership greatly benefit organizations and team consisting of individuals from varying cultures across the globe.
Elon Musk has been characterized as a leader who is culturally endorsed implicit leader and encompasses several Globe trends. The company boards and employee base for Tesla Motors has a dynamic team structure that encompasses global attributes and structures. Team within Tesla is highly diversified which has matched the competencies that Musk has (House, 2008). His capabilities have led the teams for continued innovations and to thrive for success for the company. His tremendous involvement in the teams and driving them towards success have enable the stock price for the company to perform which has saved the company from bankruptcy. Under his guidance Tesla has been able to attract cross border investments from several leading groups as well. Some of the best start-up entrepreneurs have been attracted and invested in the capital. His demonstration for the company vision has accomplished high levels of achievements for the company. His traits can be highlighted as;
Charismatic or value based: Musk is a highly charismatic leader with integrative, visionary and inspirational nature (Dorfman, 2012). He had opted for several rounds of financing for the company and due to his firm believe that the company has high prospects, he invested his own funds into the business. He has also been continuously involved in building innovative venture and promoting newer models by showcasing them in international shows and media. Such role of his has made investors across the world as Toyota take interest in investing in the company.
Team Oriented: Musk is wide known for his firing several employees of the company after he joined the organization as a CEO (Musk, 2014). He has firm believe in employees who drive innovation and would be instrumental in bringing changes for the company. His team orientation has enabled high visionary accomplishment for the company in the market for electric cars.
Self-Protective: Musk has occupied the leading position in several rounds of financing for the company and opted for investing a lot of his self-funds into the company. Elon Musk withdraws a salary of $1 and his compensation depends on stockholding options and rewards in terms of company performance. Hence, this depicts the high confidence and self-protective nature of his personality (Motors, Tesla Roadster Technology and Innovations. , 2011).
Participative: With constant team participation and leading innovation for incorporating change within the organizational framework Musk has devised a number of steps that add to innovative strategies. With Musk’s constant involvement he aimed at creating cars of low volume in the expensive segment. He intended to uses the money in designing medium volume cars at lower price. Then he aimed at investing those funds for high volume cars. The company under his leadership also aimed at providing solar power for the entire community through their innovative techniques (Mangram, 2012).
Human Orientation : Musk has compassion for others in his aim to develop solar polar and make energy affordable to all. Solar power will be cheap source of energy that can light up homes and even used for industrial purposes. His primary aims to lead the change in designing and manufacturing of electric cars is to develop a sustainable future that can accommodate and sustain cars without fossil fuels. Thereby reducing pollution and carbon footprints, which will immensely impact the environment. Such visions have attracted many entrepreneurs and investors to make their investments in the company. Musk being an engineers and being in the innovative team himself, he is able to accomplish such strategic aims for he company.
Autonomous: Musk have been immensely self-driven without any consultation from any other stockholder for the company (Burke, 2007). His visions to incorporate energy storage and his compassion to devise cars in the electric segment has been phenomenal in driving changes for the company.
Musk is a great leader and his leadership frame can be best accommodated by GLOBE studies in the area of cultural leadership. Thus, his ability to encompass a variety of cultural framework and lead the company have become famous world over.
Conclusion
Tesla Motors had a corporate vision aimed at creating electric cars that was catered to and developed by Elon Musk. Elon Musk with his investments in the company enabled development and innovation in the company. His characteristics of Globe Leadership Dimensions based on CLT has gained immense success for the company. His visions has developed a dynamic organizational culture characterized by hard work and innovation. Through his various indulgent in designing of various cars the industry has experienced new and technologically advanced cars segment that can match up to future capabilities and challenges posed by globalization. The several leadership undertaken by Musk is not only beneficial to the company but also to a broader aspect of creating a sustainable future by reducing pollution and global warming impacts. This reason has attracted immense amounts of investment and attractiveness for the company such that it can thrive and benefit in the future.
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