Tesla Sustainability: Key Trends, Stakeholders And Sustainable Development

Tesla, Stakeholders and Sustainability

Discuss about the TESLA Sustainability.

This report discusses the key trends in the automobile industry and how Tesla is placed for each of the trend. The report also discusses the five key components of sustainable development for Tesla. There is an increased need of sustainable development and it can happen through the use of renewable sources of energy. This report discusses the scenario of Tesla’s electric car. Tesla Motors, Inc. is an American automotive and energy storage firm that designs, manufactures, and sells electric cars, electric vehicle powertrain components, and battery products. The tesla’s electric car is a disruptive technology that has changed the market dynamics (Hutter, 2013). Customers, especially in developed economics, have started to use the electric cars so that they can make a difference towards the society and the environment. This report would discuss the sustainable vision of Tesla from 10 years from now. This vision for Tesla can be mentioned as:

‘By 2030, we want to revolutionize the automobile industry with the penetration and use of electric vehicles. At Tesla, we believe that everyone make the difference. Let’s join us and contribute towards green environment without compromising on the safety or the luxury of vehicle.’

As per a news report, producing the electricity to power electric vehicles can generate emissions. But those emissions levels are far lower than the pollution emitted by conventional vehicles, and could be even lower as the electric power sector cleans up over next few decades, according to a new report issued today.

The automobile industry is a dynamic industry and there is a huge potential of innovation in this industry. In recent times, the players in this industry have faced the resistance from the environment scientists, government and society (Mumford, 2012). There is a need to curb the pollution emitted from the cars. Tesla has taken a right step to market the electric vehicle. With Tesla, many other players like GM, Ford, etc. have also initiated the focused approach on electric vehicle (Wagner, 2011). However, the sustainable measures or the sustainability target of Tesla or any other firm would not be successful unless and until it has the support from the relevant stakeholders. Tesla has a prime objective of profit maximization and its stakeholders like investors and employees have the objective to increase the profitability of the firm. Tesla Motors is a public company that trades on the NASDAQ stock exchange under the symbol TSLA.  During the first quarter of 2013, Tesla posted profits for the first time in its history. This shows that there are serious concerns about the sustainability vision of the organization. Tesla has a diverse stakeholders and it must have the support from various stakeholders group. According to Boutelle (2004) the best way to manage diverse stakeholder interests is to analyze their needs in order to understand them and to understand how these interests effect the organization. Throughout the analyzation process it is necessary to balance stakeholder interests and prioritize their needs according to availability of resources. Additionally, stakeholder interests need to be prioritized based on relevance to organizational outcomes. Organizational leaders should do their best to review organizational procedure to ensure that their obligations are being met throughout all levels of the organizations. Breakdowns in the organization can lead to ineffectiveness in meeting the needs of stakeholders.  Departmental breakdowns can be addressed accordingly to ensure that procedures are followed and stakeholder interests will be met according to organizational goals. Morris (1997) suggested the use of stakeholder management devices to gauge how and if an organization is meeting the needs of stakeholders. Another strategy to meet diverse needs is to anticipate issues before they arise. Anticipation of issues and making changes as needed within the organization is a prime method to build trust with multiple stakeholder groups so that they can be managed appropriately (Boutelle, 2004).

Key trends in the automobile industry and sustainability vision of Tesla

The energy efficiency of different type of vehicles can be discussed as:

The three key trends in the automobile industry that would shape the sustainability vision of Tesla can be discussed as:

Use of fuel efficient vehicles

In recent times, there has been an increased push for the fuel efficient cars and it is expected that this trend would continue in future. In the coming 10 years, there would be more and more focus on green cars or electric vehicles. The large organizations in automobile industry like Tesla, GM, Ford, etc. have realized this trend and it is expected that in the coming decade, there would be more and more organization that would include the fuel efficient vehicles as the sustainability goal (Gehman, 2012).

Stakeholder interests’ are important for the development and sustainability of organizations. The goal of for-profit organizations is to promote their own interests to make profits as well as to improve the public interests (Murty, 2012). However, with various stakeholders come varied stakeholder interests within and outside organizations. This can lead to potential problems. Organization leaders must balance the interests of organizations as well as stakeholders, usually in connection with the market and considering potential profits. Organization leaders do not want to create a scenario in which one group of stakeholders appear to get their desires meet while others are excluded. Reynolds et al. (2006) argued distributing resources to relevant stakeholder groups within the organization is crucial to the function of the organization. A significant purpose for identifying and understanding stakeholders’ interests is that it allows leaders to understand and develop strategies to enlist and attract individuals as part of the organizational efforts. For for-profit organizations, making profits will almost always be the primary focus that guides decision making.

Given the facts that businesses now operate in a global marketplace, expectations of CSR are increasing, and salient stakeholder coalitions are easier than ever to form, it seems that for-profit organizations might, under some circumstances, rightfully prioritize some non-shareholder needs over those of shareholders (Gehman, 2012). The key for organizations is to find ways to create sustainable, long-term growth rather than seeking short term profits at all costs.  As people note, a balance between the interests of shareholders and other stakeholders must be struck.

With the sustainability vision of Tesla, there would definitely be an impact on the various organizational policies and structures of Tesla.

Components of Sustainable development for Tesla

The five components of sustainable development that would shape the sustainability vision of Tesla and would have an impact on the organizational policies and structure of Tesla can be discussed as:

Sustainability as the prime focus of stakeholder’s interest

Inclusiveness

The inclusiveness refers to the way the human and the environmental factors are included in the sustainable practices of the organization (Mangram, 2012). Tesla can achieve its vision only when Tesla has a focus on the human values as well as the environmental values.

Connectivity

Sustainability demands an understanding of the world’s problems as systemically interconnected and interdependent. It means that Tesla should have a 360 degree view of sustainability and sustainable development. Efforts aimed only toward ecological health and integrity, in the absence of efforts to alleviate poverty, stabilize population, and redistribute economic opportunity, may produce trivial results at best.

Equity

This component of the sustainable development implies that fair distribution of resources and property rights, both within and between generations, is a central dimension of nearly all conceptions of sustainable development (Gausen, 2012). Therefore, it is important that Tesla should focus on the development in a gradual manner

Prudence

Most analysts and researches call for humility and prudence in the pursuit of sustainable development, given the massive uncertainty and unpredictability, nonlinear interaction between system components, unknown thresholds, and complex dynamics in ecological and social systems. It is important that Tesla should take a smart and prudent approach towards the sustainable development.

Securit

This component means that the sustainable development should ensure a safe and secure workplace for employees and other stakeholders (Karamitsios, 2013). Tesla must realize that it can achieve its vision of 2030 only when it has got the best talent in the market and the management has the support of various internal and external stakeholders of Tesla.

The sustainability goal for the next 10 years for Tesla can be discussed as:

Tesla current market share (Electric Vehicle % in US market)	30%
Targeted share by 2020	40%
Targeted share by 2025	50%
Targeted share by 2030	60%

It is expected that the electric vehicle market would increase with an annual growth of 20%. One of the reports presents that:

Strategic engagement, including acknowledging the competitive status of the organization and studying its structure and communication systems, allows the corporation to gather invaluable knowledge that may assist the corporation in dealing with the particular campaign. Heightened scrutiny and corporate transparency expectations may be part of the reasons why for-profit companies like Tesla are paying closer attention to stakeholder interest.  Corporations cannot expect to be successful without managing the relations with stakeholder groups are destined for failure (Boatnight, 2006).  Attempts to conduct business as usual would be met with resistance from stakeholders if their interest were not a part of the organization’s master plan.

Sustainability and CSR (Corporate Social Responsibility)

There are two points that would impact the relationship of stakeholders with the future organization of Tesla. The first one is that the stakeholders are concerned with profits and building trust and the second one of that the loyalty is essential to managing stakeholders. Trust is a key issue when managing stakeholders and their interest. If the stakeholders have trust within the organization they will feel comfortable with bringing issues to the organization with the understanding that their issues will be heard. Loyalty between the stakeholder and the organization is a perishable trait that will diminish if either organization takes the other party for granted. The other point raised during in the current business environment is the importance of making a profit for the stakeholders. This is an important issue because in for profit organizations making a profit is the most important concern that all stakeholders have in common. When organizations openly address profit status and maintain loyalty with stakeholders, it is easy to manage other concerns because organization is making profits for the stakeholders and they trust they organization. If the stakeholder loose trust and the organizations is not making profits the relationship will incur stress and this may results in long term problems.

It is highly possible that the view of different stakeholders would not match to a single point of sustainability vision. Therefore, the leaders of Tesla must have the plan to avoid all the conflict and bring management towards a common vision and sustainability goals that could be achieved by 2030. Stakeholders have varied requirements and goals that tend to conflict (Boutelle, 2004). In order to determine the level of influence of each stakeholder an analysis of each stakeholder should be completed. Boutelle (2004) labels four main areas that each stakeholder can fall into based upon a stakeholder analysis grid: 1.High influence, High interest, 2.Low interest, High interest, 3.High influence, Low interest, and 4.Low influence, Low interest. Using the grid to isolate the level of interest and influence each stakeholder possess will help pre-empt any objections that may arise to a given project. This type of pro-action will reduce conflict and assist in the development of projects that can be seen as beneficial to all stakeholders. Although all stakeholders will never be fully satisfied this grid isolates those whose influence is of paramount importance (Hepburn, 2014). Having those stakeholders that are strong in influence in agreement can bridge any gaps that may exist and reduce opposition. This type of conflict management creates a win-win scenario and helps in the creation of long-term plans for the benefit of all.

Sustainability vision of Tesla and impact on the organization

When it comes to conflicting situations, people who have already experienced the problem will have a more direct insight into what the problem is and how to solve it.  During a stakeholder’s conflict, it is important to make sure that each of the stakeholders which are having conflicting viewpoints be called to a meeting in order to find a solution.  During the meeting a person in charge will attempt to help each party communicate their viewpoints and the reasoning behind the way they think, believe and act (Raven, 2012). The best way of communicating with stakeholders who ideas don’t align with the organizations is to attempt to refocus the stakeholders on the organization’s vision. Management or leadership must listen to the stakeholders and figure out where the conflicts originated from and begin to repair the relationship. For-profit organizations will always have to deal with stakeholders with conflicting ideas. Taran and Betts (2015) explored a theory using proactive matching and advocacy strategies to improve relationships between organizations and stakeholders who are at odds with each other. Taran and Betts (2015) also stated the importance of establishing Corporate Social Responsibility (CSR) activities and must align with the interest and concerns of stakeholder’s organization. Organizations have several stakeholders and managing the interest of all of these stakeholders can be overwhelming. However, for-profit organizations must resolve these issues due to the effect this situation may have on the bottom line and if left unresolved the organization may incur financial losses from it.

By “silent stakeholders” it is meant that the stakeholder has a significant interest in the organization but no voice or power. For Tesla silent stakeholders are the set of customers that wants to focus on sustainable development, want to buy the Tesla car, but they do not have any say in the working of the organization. For Tesla, the silent stakeholders also include the particular group of advocates that are concerned about the damage done to the environment when the car is disposed. There are serious concerns that the battery and the engine of the cars can cause serious environmental damages and it could be a serious bottleneck to the sustainable development practices of Tesla. Therefore, it is important that Tesla should focus on the way car is disposed at the end of the life. The sustainability guideline about the end life of cars should include a dedicated premise or factory of Tesla where cars are disposed.

Inclusiveness

The sustainable outcomes or the sustainable goal for Tesla against each of the sustainability component of criteria can be discussed as:

Sustainability criteria	Outcome/ Desired performance
Inclusiveness	Tesla should take all the stakeholders together and would keep the people informed
Connectivity	Two way communication with different stakeholder and society
Equity	Focus on current development and the development of future generations
Prudence	Collaboration with other players in the industry to focus on absolute sustainable development
Security	Approach of employee first to get maximum contribution from employees

Attitude is an important means of understanding stakeholder behavior and perceptions when trying to manage stakeholder interests. It is important for organizational leaders to consider how the organization is perceived by all stakeholders so that the decision making process is influenced by how these perceptions can be changed to align with the reality of the mutual goals between the organization and the stakeholder. Morris (1997) mentioned the use of stakeholder management devices as a preemptive method to maintain clear understanding of stakeholder attitudes and positions on the actions of an organization. By maintaining clarity organizational leaders will be proactive in addressing stakeholder interests and conflicts by developing plans to mitigate these conflicts and built trust with stakeholders. In conflicting or turbulent situations organizational leaders should provide stakeholders with insight into the reasoning behind certain decisions so that their attitudes can be reflective of the importance of maintaining specific organizational objectives. Working with stakeholders to achieve organizational success is imperative and in the best interest of all parties.

Conclusion

The above paper discusses the sustainability vision of Tesla for 2030. It is expected that Tesla would be able to achieve its goals and objectives as the end consumers have started to use the electric cars so that they can make a difference towards the society and the environment. The above paper also discussed the key stakeholders of Tesla that would have an impact on the path and approach of Tesla to achieve sustainability vision. For-profit companies like Tesla would benefit from conducting stakeholder analysis and continually evaluating the results. This method would be an effective in gaining stakeholder buy-in in the corporate vision and encourage collaboration to create valuable products and services (Boatnight, 2006).  Stakeholder analysis is a proactive means of engaging with stakeholders and managing their influence. The corporation’s stakeholder management practice could a preemptive measure to control how stakeholders exert influence.

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