Managing Stakeholders For Tesla Motors

Challenges Faced by Tesla Motors

Determination of the stakeholders is important for the contemporary business organizations due to the reason that diverse range of internal and external stakeholders is relevant in the current business scenario. The more effective will be the management of the stakeholders, the more will be the organizational competitiveness in the long term. However, it should also be noted that strategic approach should also be different for different sets of stakeholders as their requirements and interests from the business will be different and diverse (Missonier and Loufrani-Fedida 2014). Among the latest organizations known for their innovations and disruptions in the market, Tesla is one of the leading names. They are offering high performance electric mobility solutions with disrupting the existing global automobile market trends.

The mission statement of Tesla Motors states about their objective of meeting the current environmental needs by providing sustainable solution. In addition, the mission statement of Tesla Motors also states about providing solutions with maximum utility to the customers. This refers to the fact that electric mobility is being considered as the less practical compared to the gas combustion mobility (Hardman, Shiu and Steinberger-Wilckens 2015). Thus, the mission statement of Tesla Motors is acting as a differentiated approach in the industry. On the other hand, the vision statement of them states about their goal of changing the entire automobile industry and mainstreaming the electric mobility solutions with more game changing and one of the kind products. Therefore, given their goals and objectives, it is important for Tesla Motors to manage their stakeholders effectively and have maximum desired outcome (Stringham, Miller and Clark 2015).

This report will discuss about the major challenges being faced by Tesla Motors along with the recent major trends in the industry. In addition, the major stakeholders will also be identified and their interest will be evaluated. This report will also recommend a few recommended generic strategic programs for each of the identified stakeholders.

One of the major challenges identified for Tesla Motors is financial instability. This is due to the reason that even though Tesla Motors have disrupted and created a stir in the global automobile market but still they can be considered as startup considered to the global automotive giants. Thus, they are facing financial challenge to fund their operations. This is evident in delayed introduction of Model S. Furthermore, it is also identified that Tesla Motors is having limited exposure and presence in the market and their manufacturing unit is present only in the United States (Chen and Perez 2018). Thus, they are facing the challenges of competing with the global auto giants worldwide. Lack of infrastructure for electric mobility across the world is also a major challenge for Tesla Motors due to the reason that it is hampering their sales potentiality in the global market. In addition, Tesla is also facing the challenges in marketing their products in the developing markets due to the reason that developing markets are witnessing the maximum growth rate in the current time but these markers are not ideal for the premium offerings (Moritz et al. 2015).

Recent Industry Trends

It is identified that even though Tesla Motors is facing a few challenges in their business operations but the industry trends are more favorable for them. This is due to the reason that with the increasing level of vehicular pollution, governments of different countries are initiating electric mobility to replace the existing trends. Thus, the more will be the promotion of the electric mobility, the more will be the opportunities for Tesla Motors in terms of their car sales (Cherubini, Lasevoli and Michelini 215). However, on the other hand, with the change in the market trends, existing brands are also introducing electric cars to tap the growing markets. Thus, the competitive scenario is becoming more challenging for Tesla Motors with the increase in the competition. Moreover, mass market and affordable mobility solutions are gaining more traction in the global market due to their more acceptances, which is not the strong point for Tesla as they are having only premium offerings (Propfe et al. 2013).

It is identified that the major relevant stakeholder groups identified for Tesla are users, governance, influencers and providers. This is due to the reason that Tesla is operating in highly competitive automobile market, which involves a good number of internal as well as external stakeholders. It is also identified that in terms of users, consumers are the most important stakeholder for Tesla due to the fact that customers are the primary user of their cars being sold by them (Solaimani, Guldemond and Bouwman 2013). In addition, in terms of influencers, upper level managers and other employees are being included who are having the power and influence in determining the internal effectiveness. On the other hand, shareholders can also be considered as the influencers. This is due to the reason that they are one who has invested capital in the business and thus having influencing power in the management. In terms of governance, government bodies, authorities and board of directors are included. This is due to the fact that they are responsible for governing the business operations and create the long term business strategic intent (Hovav and Gray 2014). Lastly, in terms of providers, suppliers, partners, customers and investors can be included. This is due to the reason that each of these stakeholders are the providing supports such as providence of raw materials by the suppliers, providence of revenue by the customers and providence of capital by the shareholders.

Identification and Evaluation of Major Stakeholders

From the above identification of the stakeholders, the major four relevant stakeholders are customers, government, shareholders and employees. These four are being selected due to the reason that each of them is having different sets of influence and interest in the business of Tesla. The following table will discuss about the behavior and motive of each of these four identified stakeholders.

Customers	Customers are the most variable stakeholder among all the stakeholder groups for Tesla. This is due to the reason that taste and preference pattern of the customers is changing rapidly. In the case of Tesla, customers preferring the products of Tesla will opt for competitors if superior products are being offered by them (Eskerod and Huemann 2013). Their major motive is to gain maximum value proposition from the products.
Employees	Employees are the major internal stakeholders for Tesla due to the reason that skills and expertise of them along with their productivity determine the organizational competitiveness of Tesla. Behavior of the employees can be determined by the human resource management process by the managers. The more effective will be the working environment, the more positive behavior will be possessed by the employees (Vidaver-Cohen and Bronn 2015). On the other hand, their major motive is to gain the monetary benefits for their services along with getting recognized in the organization.
Shareholders	Shareholders are also important due to the reason that they are the major sources of capital for Tesla. They will invest only when the long term potentiality will be favorable and positive return on investments. Thus, it is important for Tesla to ensure their long term potentiality to attract more investment bids (Weninger et al. 2013). On the other hand, the motive of shareholders is to gain maximum return from their investments and accordingly they expect to have favorable business practices accordingly.
Government	In the current business scenario, government should be considered as one of the major stakeholders due to the reason that business operations are being influenced by their policies (Payne and Calton 2017). The major motive of government is to ensure the social approach of the business and to ensure the ethical and lawful standards for the business organizations.

Among the four stakeholders being identified in the above section, customers are from users category, government is from governance category, employees are from users category and shareholders are from providers and governance categories. It should also be noted that different generic strategies should be considered in managing the different stakeholders due to the reason that strategies should be different based on the motives and interests of the stakeholders (Harrison and Wicks 2013). One of the major strategies being identified is the involvement of the stakeholders. Stakeholders should be involved in their interests due to the reason the more involvement will ensure that their interests are being fulfilled and they are also providing the maximum value for the organization. In terms of employees, stakeholder involvement strategies will be effective due to the reason that ensuring the involvement of the employees will help to improve their productivity and effectiveness (Jensen 2017). Moreover, employees can also be managed effectively by having good communication strategies due to the reason good communication strategies will help in determining the needs and requirements of the employees and can be fulfilled.

There are number of generic strategies can be initiated for managing customers with one of the major strategies being stakeholder mapping. This will help in evaluating all the relevant elements related to customers and identify the major factors. This should be noted that with the help of the stakeholder mapping, customer trend can be identified and they can be managed accordingly (Jones, Wicks and Freeman 2017). This strategy is also applicable for the shareholders due to the reason that this will help in evaluating the objectives and expectations of the investors and design the organizational processes accordingly. Moreover, initiation of the cost leadership strategy can also be an effective approach for managing the customers. This is due to the fact that initiation of the cost leadership strategy will help Tesla motors in offering their products in competitive pricing, which will attract more customers along with maximizing their value proposition. In the terms of government, identifying the potential triggers of emergence of issues will be effective in managing them. This is due to the reason that maintaining the ethical standards and lawful activities will help in aligning with the government rules and regulations (Bridoux and Stoealhorst 2014). Moreover, effective management of the customers and employees will also help in aligning with the government standards.

Recommended Generic Strategies for Stakeholder Management

It should be noted be the overall objective of Tesla in view to their stakeholder management program should be ensuring their higher set of involvement and engagement in the process. This is due to the reason that involvement and engagement of the stakeholders will ensure that organizational productivity and effectiveness will be more. The following sections will discuss about the specific strategies for all the four stakeholder groups, which will ensure the better involvement and engagement of them.

It is recommended that cost leadership strategy will be effective and ideal for involving and engaging the customers. It is identified that the current product portfolio of Tesla consists of cars with having premium price tags. Even though the latest Model 3 is positioned as n affordable offering but still it is considerably pricier to its competitors. Thus, the market potentiality and presence is limited for Tesla and this is also restricting involvement of more customer sections. Thus, it is recommended that cost leadership strategy will help in reducing the cost of operation and offer the final products in more competitive price. The more competitive will be the final pricing, the more will be the attractiveness of the products among the larger segments. Moreover, customers will be able to have better value from their given price, which will meet their interests and enhance the involvement.

In order to ensure the involvement and engagement of the employees, it is recommended that consensus in the decision making process should be ensured. This will help in increasing the representation of the employees in the decision making process along with the managers. Employees will be able to communicate their issues and decision process can be initiated accordingly. Moreover, it should also be noted that building consensus in the decision making process will also help in increasing the involvement of them in the workplace. In the case of Tesla, involvement of the employees will help in identifying different inputs from them and it will benefit Tesla in the long term. With the effective management of employees of Tesla, probability of emergence of innovative ideas will be more. Therefore, Tesla will have more effective and productive internal management and they can stay ahead in the competition in terms of innovation.

In view to the strategic intent discussed above, it is recommended that mapping should be done in managing the shareholders. This is due to the reason that it is not a viable option to involve all the shareholders in the decision making process, which will cause more complexities and difficulties in the process. Thus, mapping should be done in evaluating the trends and preference pattern of the shareholders and initiating the organizational process accordingly. In the case of Tesla, it is recommended that shareholder mapping should be done in identifying the expectations of them and to what extent the organizational process of Tesla is aligning with it. The more effective will be the fulfillment of the expectations of the shareholders, the more will be their involvement in the organizational affairs of Tesla. This will also ensure the long term investment viability in the business.

Conclusion

It is recommended that ethical decision making process will be beneficial in managing the governmental stakeholders. This is due to the reason that government is not having any profit maximizing motive from the business operation of Tesla rather they are more concerned with law full activities of the firms. Thus, if Tesla can ensure ethical decision making process, then the probability of generation of unethical practices and lawsuits will be less. This should also be noted that with the help of the ethical decision making process, other stakeholders including the employees and customers will also be benefited, which will promote more holistic process of stakeholder management. If the standards and regulations of the government can be followed and adhered, then the required assistance will also be more from the side of the government. Thus, the involvement level will get increased.

Conclusion 

Thus it can be concluded that Tesla is having number of different stakeholder both internal and external and it is important to manage them effectively. In this report, the business scenario of Tesla is being discussed and how the stakeholders are having influence in their business process. Four major stakeholders are being identified with having major relevancy for Tesla and these are employees, customers, government and shareholders. All the stakeholders are being further evaluated in identifying their motives and behavior along identifying their categories. Based on the identified factors, generic strategic programs are being recommended for each of the stakeholders. Different recommendations are being stated, which will help in enhancing the involvement and engagement of them in the long term for Tesla.

Reference 

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