The report brings about the discussion on the stakeholder analysis and strategic development of the organisations in the contemporary business environment. Stakeholder analysis and the concepts of strategic development will be explored on the company Tesla Motors. Stakeholder analysis refers to the process of assessing a system and potential changes that is relevant to the key interested parties in the organisation.
Stakeholder analysis is considered as the part of stakeholder management. In an organisation, manager must perform the activity of stakeholder analysis, as it is significant to identify all the important stakeholders and their varying needs and interests (Wandebori, Steenhuis and Groen, 2018). Proper or effective identification of the stakeholders of an organisation helps in attaining the vision or goals of the organisation. Therefore, this report will identify four major groups of stakeholders in the company and generic strategic programs for each of these groups will also be stated in the following report. In addition, the reasons will be stated for the programs recommended for each stakeholder group of the organisation.
Company Overview
Tesla Inc. (formerly Tesla Motors) is an American Automotive company located in Palo Alto, California. The company was founded in the year 2003 by Martin Eberhard and Marc Tarpenning. Tesla specializes in the manufacturing of electric cars and solar panel manufacturing through the use of solar city.
Tesla Motors was joined by Elon Musk, J.B. Straubel, Lan wright are collectively called as the co-founders of the company. The former founder, Elon Musk is the current Chief executive officer of the corporation has visualized Tesla to be the technology company, and an independent automaker in the industry. The aim or the objective of this independent automaker was to ultimately provide their offerings at reasonable rates to the customers.
Apart from the manufacturing work of electric cars or vehicles and the energy storage systems, the company has been making investments in the installation of solar and energy storage products. However, the company has acquired wide recognition for their high performing electric vehicles in the industry (Grant, 2016).
Mission & Vision statement of the company
Tesla’s mission and vision statement highlights about their prominent electric automobile manufacturing and the related operations within business. The mission statement of the company is to accelerate the transition of the world towards sustainable energy. The statement emphasizes on the fact that the electric cars can serve better than the gasoline powered ones. Thus, it states that the company aims to work towards reducing the dependency of people on the carbon fuels and shift towards the energy systems. The mission statement of the company is a socially responsible mission, as it focuses on using innovation for the betterment of the world (David, David and David, 2016).
On the other hand, the vision of the Tesla is “To create the most compelling car of the 21st century by driving the world’s transition to electric vehicles”. The vision statement is related to the future growth and development of the company, thus it focuses on two things, first is the brand image and product which creates value (Bohnsack, Pinkse and Kolk, 2014).
Tesla vehicles has undergone recent developments in the past five years, and the development has been observed regarding the software up gradation in many of the models which does not require much human interaction. Along with the development in the vehicle lines, the company has been also working in the products into energy space, and improving their infrastructure. However, there have been certain challenges faced by the company, as Tesla need to fill orders, and maintain good relationships with their workforce, and need to focus on increasing their profits level in the industry (Blomgren, 2017).
Tesla Stakeholder view of the Organisation
The stakeholder theory in any organisation refers to the theory of organisational management and business ethics which addresses about the morals and values of any organisation. Stakeholders view model or theory has been designed to define the purpose of business organisations, i.e. to create value for the stakeholders along with the shareholders. Stakeholders refer to the individuals or groups whose interest is affected by the organisation actions or activities or who influence the performance of the organisation (Zerfass and Wiesenberg, 2016).
There are two types of stakeholders in any organisation, internal and external and internal stakeholders include the individuals from the management, i.e. within the business entity. These are the employees, owners or board members, shareholders, and the external stakeholders in any organisation consist of the customers, employees, suppliers, contractors, communities, and other shareholders. Thus, stakeholder theory in any organisation suggests the managers or founders that they must consider the interests and expectations of their stakeholders in order to gain success and competitive advantage in the long-run (Hoang and Rothaermel, 2016).
From the above diagram or stakeholder view model in context to the company Tesla, it has been clearly understood that amongst these two groups, Tesla has worked efficiently to satisfy both the groups of stakeholders. To discuss in detail about the aspects, importance and key contribution of the internal stakeholders it can be stated that they belong to the organisation and have a direct and major impact on the organisation. As they serve to the organisation, Tesla has a primary responsibility towards satisfying their interests and expectations. In the absence of internal stakeholders, the organisation would not be able to survive and ensure growth for a longer period in the automotive industry (Akpinar and Vincze, 2016).
Internal stakeholders of the firm
Employees- These refer to the group of people who receive remuneration or compensation for their work in the company.
Owners- These refer to the individuals or the group who own the organisation, and these can be the partners or shareholders.
Board of Directors- The individuals or group who assure strong governance of the organisation, and they are elected from a common vote of the members of the organisation, in the Annual General Meeting (AGM).
Managers- These refer to the individuals who are responsible to maintain or manage different departments of the organisation such as sales manager, production manager, general manager and others.
Investors- Investors are those who make investments in the organisation.
To discuss about the stakeholders of the company, Tesla Motors it can be stated that it has an effective corporate social responsibility strategy which considers and concerns the interests of all the key stakeholders of the company. Tesla’s stakeholders are prioritized in accordance to the CSR strategy, such as communities, customers, employees, investors, shareholders and government (Mukerjee, 2016).
Stakeholder Analysis for four selected stakeholder groups
From the above analysis of key stakeholders of the company Tesla motors, it has been understood that stakeholders contribute to the organisational growth and reputation of the business to a major extent. Thus, the following discussion will choose four key stakeholders from the group and their interests, behaviour, or motives will be analysed, and these include employees, customers, shareholders, and suppliers (Rahdari, Sepasi and Moradi, 2016).
Communities – Tesla Motors operates an automotive business which is influenced by the communities as they are crucial to design the corporate image of company. One of the main expectations of the community being an important significant for Tesla is to ensure protection of environment, thus the company concerns it as an important aspect. For this, the cars introduced by Tesla have effectively satisfied community by providing zero emission products. In addition, the company has also allowed the use of company’s patents by other organisations as well which benefits the communities in an indirect manner (Niederman et al., 2017).
Customers- These are considered as the major elements or stakeholders in the model as they determine the wealth or income of Tesla. To meet the rising demand of the customers, the company has reduced the costs of batteries used in the cars, and widen the charging station networks which will benefit the customers in the long-term (Smith, 2017).
Employees – Employees act as the crucial part and valuable asset for any organisation’s performance forming the base of stakeholder analysis. Thus, Tesla accommodates their employees by offering competitive compensation strategies and effective HR programmes with the objective to enhance their ability for the professional growth. In addition, the company organises new training programmes as a part of their CSR activities which indirectly provides opportunities to the workforce and understand the world through a broader outlook (Fernandez-Feijoo et al., 2014).
Investors/Shareholders – It has been analysed from the research on the success on Tesla in the automotive industry, Tesla has been highly independent on their investors in the early years of their business as they invest in the capital and determine the cash flow of the company. Tesla has focused devising long-term strategies to fulfil the interests (high profitability and growth) of the investors, and other shareholders. In addition, the concern of the company towards enhancing the ecological sustainability of the business also acts as a major factor towards reaching out to the investors. As it builds a positive image of the company which in turn attract and fulfils the interests of the investors. Thus, in this fashion the company can be growing and stay focused on producing and selling their products to other, and increasing their profit margins and satisfying their investors as a part of the stakeholder group (Aguinis and Bradley, 2015).
Stakeholder category identification and generic programs for stakeholders
It has been analysed from the research findings on the aspect of stakeholders theory that the stakeholders contribute to the significant success and higher productivity of the organisation. Thus, there are four categories established in context to the stakeholder analysis of the company, these categories include users, governance, influencers, and providers.
The four key stakeholders in the above analysis chosen were employees as internal stakeholders and customers, suppliers and shareholders, as external stakeholders. Thus, these different stakeholders can be allocated in the above mentioned categories of the stakeholders (Zavyalova et al., 2016).
Customers are found to be present under the category of users as they are assumed to use the products of the project or programme introduced by the company they are referred to be the beneficiaries of the output. The best example for this is the customers. Another example can be the sales team, where they are performing the role of delivering a new software package for the sales team. Thus, the category of user includes two types of stakeholder i.e. employees and customers within the organisation (Bourne, 2016).
On the other hand, discussing about other two stakeholders in the company, Tesla suppliers and shareholders, these are categorised as ‘providers’ as they are considered to have the ability to change the direction of the project or programme. The category of the stakeholders are providers is a wider category as it consists of other key stakeholders of the company also such as business partners, contractors or other who provide resources for the completion of the project or programme.
Tesla has been putting efforts to manage their customers, and higher their satisfaction and experience such as expansion of the network station for the customers helps in enhancing the accessibility of customers. This shows the effective CSR practices of the company to manage their customers as stakeholders. Similarly for the employees working in the organisation, Tesla provides them higher compensation and better career opportunities which ensures they are happy to work in the organisation, and easily managed. Tesla ensures a harmony and synchronised organisational culture to ensure health safety and enhanced quality life of all the key stakeholders (Chen and Perez, 2018).
Recommended strategic program for the four selected stakeholder groups with the reasons
The generic strategies for the effective stakeholder management have been divided into four categories, such as swing, defensive, offensive and hold. It has been a fact that supportive stakeholders of any firm possess low potential threat, but high cooperate potential, which includes managers, employees, suppliers, and customers. Thus, a firm must focus on adopting a strategy which is beneficial for the competitiveness and which enhances cooperates potential. These are the strategies available in the organisation to manage customers, employees, suppliers, and shareholders.
Swing strategies are applicable to the cases when the stakeholder group has relatively high cooperative potential and competitive threat. It includes some examples, as changes made in the rules, the decision forum and transaction process. Thus, it can be effectively used for the employees working in the company, Tesla. On the other hand, hold strategies can be adopted in the case when the stakeholder groups such as suppliers, in this case have low cooperate potential and low competitive threat to continue their current stakeholder programs and activities and maintain their current position amongst other stakeholders (Moritz et al., 2015).
Offensive strategic program in the organisation are applicable to the group who have high cooperative potential and relatively low threat of competitors in order to enhance their cooperate potential. An example of offensive strategy can be the attempts which are made to change the perspectives of stakeholders or to link the program to others, which the stakeholders considerable more favourable. The offensive strategy can be effective to manage customers in an effective manner within organisation (Grant, 2016).
Defensive strategy found in the cases where there is a situation of high competitive threat and low cooperate potential within stakeholders. The strategy can be applied to the case for the management of shareholders, where there is an increasing threat from the other investors as well.
It has been recommended that these strategies can be applied by Tesla in a more effective way, as the customers in the organisation has no preference to shift to other competitors, also they have low cooperative potential as they are already satisfied with the company offerings and products. Thus, appropriate strategy for these customers can be hold strategy
Similarly discussing about the employees working in Tesla motors satisfied with the organisation’s strategy to provide higher compensation and healthy work environment and several other benefits. Thus, in this case where the cooperative potential and competitive threat are both low, hold strategy can be applied effectively.
The reason behind choosing these strategies is that it has been defined and understood as the most effective and appropriate strategy for the mixed stakeholders in the organisation. According to perspective of Johnson and Schoels (2012) , the strategy has proved as one of the best to improve the stakeholder management and relationships in the organisation.
Conclusion
To conclude the above discussion it has been analysed that Tesla Motors has achieved greater success over the past few years and continue to attain higher growth. Tesla’s automotive directly influence their stakeholders, employees, customers, government, shareholders, and others, and maintain effective relationship with them. Sound relationship with the people or stakeholders in the organisation indicates about the significance of corporate social responsibility in the company. Thus, the above report has discussed all the relevant aspects related to the company, and has illustrated well the stakeholder analysis and management and caters to their varied nature of interests and expectations. Hence, the report has implemented effective strategies for managing stakeholders within organisation and managing change within their position, which acts as the stepping stones of success.
References
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