PRINCIPLES OF MANAGEMENT-CIA 1

RESPONSIBILITY & RESPONSIVENESS OF AN

ORGANISATION

NAME:CRIZ MATHAI
REG NO:21221013
ORGANISATION:TESLA
DATE:19/08/2021
An understanding of the role of managers (Operation & Engineering Unit) in
Tesla Company
and the key functional areas and functions with special emphasis on the
responsibilities and the responsiveness of the chosen firm towards their
stakeholders in the current pandemic situation.
 INTRODUCTION

TESLA

Tesla, Inc. is an American electric vehicle and clean energy company based in Palo Alto,

California, United States. Tesla's current products include electric cars, battery energy
storage from home to grid-scale, solar panels and solar roof tiles, as well as other related
products and services. Founded in July 2003 by Martin Eberhard and Marc Tarpenning as
Tesla Motors, the company's name is a tribute to inventor and electrical engineer Nikola
Tesla. 

Elon Musk, who contributed most of the funding in the early days, has served as CEO since
2008. According to Musk, the purpose of Tesla is to help expedite the move to sustainable
transport and energy, obtained through electric vehicles and solar power.  Tesla began
production of its first car model, the Roadster, in 2009. This was followed by the Model
S sedan in 2012, the Model X SUV in 2015, the higher volume Model 3 sedan in 2017, and
the Model Y crossover in 2020. The Model 3 is the world's all-time best-selling plug-in
electric car, with more than 800,000 delivered through December 2020. Tesla's global vehicle
sales were 499,550 units in 2020, a 35.8% increase over the previous year. In 2020, the
company surpassed the 1 million marks of electric cars produced.

Tesla has been the subject of numerous lawsuits and controversies arising from statements
and acts of CEO Elon Musk and from allegations of creative accounting, whistle-
blower retaliation, worker rights violations, and unresolved and dangerous technical problems
with their products.

TESLA INDIA

Tesla India Motors And Energy Private Limited is a subsidiary of Tesla Inc. for its
operations in India. The company was registered on 8 January 2021 in Bengaluru, Karnataka.
It has officially registered with the Registrar of Companies in India at its Bengaluru office,
confirmed by Elon Musk, CEO of Tesla on Twitter. Transport Minister of India Nitin
Gadkari has confirmed the entry of Tesla in India.
 ORGANIZATIONS SITUATION DURING THE PANDEMIC

Unhindered by a pandemic that has ravaged the global economy, Tesla has doubled its third-
quarter profits as it nears record annual deliveries. But the electric carmaker still depends on
the sale of CO2 emission offsets. Net profits in the third quarter reached $331 million (€280
million), more than twice the $143 million posted at the same time a year earlier. Revenue went up
nearly 40% to $8.7 billion, exceeding analysts' expectations.

The value of Tesla shares — which have increased fivefold since the beginning of the year
— were up 4.3% to $440.81 in extended trading, news agency Reuters reported. 
This marks the fifth straight quarter of profits for the company. As of September, Tesla
reported making $451 million in 2020 and seems on course to post its first annual profit.

ORGANIZATION CHARECTERISTICS

Tesla has a functional or U-form organizational structure. The unitary-form (U-form)

structure uses organizational function as the main defining factor. For example, the company
has a structural group of employees for engineering, and another for sales and service. Some
structural characteristics of other types of corporate structure are also present in Tesla,
although at a less significant extent. In this company analysis case, grouping based on
business function stands as the most significant feature.
The following characteristics are significant in Tesla’s organizational structure:

1. Function-based hierarchy (most important)

2. Centralization
3. Divisions

Function-Based Hierarchy.

The most significant characteristic of Tesla’s corporate structure is the function-based

hierarchy in its global organization. This hierarchy involves functional teams or offices that
oversee domestic and international operations. This feature is typically observed in traditional
corporate structures, where companies aim to maintain strict managerial control of their
operations. In this business analysis case of Tesla’s organizational structure, the following
functional offices direct and represent the global hierarchy:
1. Chairman & Chief Executive Officer
2. Finance
3. Technology
4. Global Sales and Service
5. Engineering
6. Legal

Centralization.

Tesla, Inc. uses centralization in its corporate structure. The emphasis of centralization is
managerial control on the entire organization through decisions that a central group or team
generates. In this case, the heads of the offices of the global hierarchy form the corporation’s
central headquarters, which directly control all operations. In this organizational structure,
Tesla minimally supports the autonomy of its regional or overseas offices. The company’s
headquarters make most of the decisions for overseas operations.

Divisions.

This characteristic of the corporate structure focuses on the extent of geographical or other
types of divisions in Tesla Inc.’s automotive business. These divisions are used to implement
different strategies and marketing campaigns, and to organize financial records and reports.
The company’s main divisions in its corporate structure are (1) Automotive and (2) Energy
Generation and Storage. These divisions are less significant compared to the function-based
hierarchy of the organization. Also, Tesla’s organizational structure has the following
geographical divisions mainly used for financial reporting: (1) United States, (2) China, (3)
Norway, and (4) Other.

Tesla’s value proposition

Top managers in the consumer discretionary space (XLY) often ponder what value
proposition they offer to their customers. A company may want to play on price or choose to
offer an exquisite product. The automobile industry has a mix of players offering both
propositions to the customers. While Ford (F) and General Motors (GM) largely seek to cater
to the mass market segment, luxury brands such as Tata Motors (TTM), which owns Jaguar
Land Rover, serve the top end of the market.

Business Model of Tesla

The business model of a company refers to unique strategies it uses to gain a larger market
space and commercial value. The business model of Tesla can be represented below;

KEY RESOURCES OF TESLA

Key resources of Tesla include its big data analysis. Other than that, Elon Musk is one of the
key resources of the company. The charging and induction system of Tesla is also a key
component. Tesla has its own distribution channel.
KEY PARTNERS OF TESLA

 2009 – Tesla, Inc. aligned a partnership with OEM manufacturer (Daimler),

which helped to provide Tesla, Inc. with access to superior research and
engineering development and a cash infusion that helped Tesla to escape the
potential bankruptcy.
 2010 – Tesla, Inc. signed an alliance with Toyota, which enabled them to buy
former NUMMI factory which positioned Tesla professionals to learn the large-
scale, high-quality manufacturing from a pioneer of lean manufacturing.
 2014- Tesla, Inc. joined Osaka (Japan) investments to develop and improve its
battery designs

CUSTOMER RELATIONSHIP IN TESLA

It is important to note that Tesla is not just selling cars. Its bigger mission is to ‘accelerate the
world’s transition to sustainable energy,’ and you can feel that running through everything
the company does. They want to make the lives of its customers more sustainable and help
save the world, but they also want every employee to be committed to something bigger than
‘just a job.’
Over recent years we have seen plenty of companies make nice public statements about their
eco mission, or even put huge slogans up on their office walls, but for Tesla it really does feel
like a commitment to a cause. How many other CEOs can you think of that refuse to see
other companies as competitors, but instead try to get them to buy into the same vision? Elon
Musk open-sourced all of Tesla’s patents and even praised its rivals for their progress on
electric vehicles.
Abad sales experience is one of the most common ‘frictions’ for customers buying cars, and
over the years, car salespeople have perhaps built a reputation for being pushy. So why not
remove the biggest friction or annoyance for customers? If you want a customer experience
that stands out from others in your industry, hunt for the typical frictions and find a way to
remove them.
Do you enable customers to help themselves?
When it comes to removing frictions from a customer journey, one of the most common
approaches for brands is to move their sales process online. For Tesla, they have made sure
all the information you need to configure, buy, and schedule a pickup of one of their cars can
be found easily on their website. They have simplified their pricing so there is none of the
stressful haggling customers are often uncomfortable with, so the whole self-service process
is as straight forward as ordering groceries online.
Of course, there are still some ‘old school’ customers who like to touch and feel a car before
spending, so Tesla still has fancy showrooms with customer experience specialists, rather
than salespeople, who can help with test drives and provide a human touch when it is needed.
Do you keep your customers close?
Many car companies collaborate with dealerships for selling and servicing their products. The
problem with this for Tesla is that these dealerships often have the very ‘traditional’ approach
that they are trying to get rid of.
Tesla’s strategy is to own the entire customer relationship, from start to finish. The company
sells the cars directly to its customers, without any third parties being involved, meaning they
have complete control over the messaging and relationship to offer a consistent experience.
Do you sell a product, or an experience?
Tesla’s CX strategy is to not just offer a product but augment it with services and
experiences. It recognised that finding charging stations was a challenge for customers, so
they set about building a large network of them across the US and Europe. And for customers
that cannot wait for their battery to charge, they can even exchange their car’s battery for a
new, fully charged one in 90 seconds.
Crucially, the company culture is focused on listening to customers. It makes about 20
engineering changes every week to its Model S vehicle in response to what customers tell
them about their driving experiences, or to data insights gathered on how customers use their
cars. It means software updates can happen overnight, so customers feel like their car is
constantly reinventing itself.
Tesla is a great example of management guru Philip Kotler’s concept of the ‘augmented
product’, where the nonphysical part of the offer – the experience, the service, the mission
and the brand – is what sets it apart.

How honest are you really?

Lots of companies like to think they are honest with customers, but Telsa has made
transparency an important part of its brand, which perhaps sets it apart in the car industry.
When the delivery dates of the Model 3 kept being pushed back, customers started to become
understandably disappointed and worried. Tesla decided to be completely honest about the
challenge, and Elon Musk even directly responded to the concerns people were sharing on
Twitter.
The reality is that problems and mistakes happen in all industries. Customers will understand
that. It is only when the communication around them happens openly and honestly that you
can maintain a good customer relationship during challenging times.

ROLE OF MANAGERS IN TESLA

Elon Musk
Elon Musk is the co-founder, chief executive officer (CEO), director, product architect, and
unquestionably the primary driving force at Tesla Motors. Musk, a native of South Africa, is
also the founder, CEO, and chief technology officer (CTO) of SpaceX, and chair of SolarCity
following Tesla's 2016 acquisition of the key solar power firm.
In acquiring SolarCity, Musk has stated his intention to create a large-scale integrated
renewable energy firm that can become a major provider of both solar panels and the storage
batteries needed to drive them.
Musk, who holds a bachelor's degree in physics earned at the University of Pennsylvania and
a bachelor's degree in economics from the Wharton School of Business at the University of
Pennsylvania, is both an engineer and inventor. He is a trustee of the Musk Foundation,
which actively promotes green technology and the development of renewable energy sources.
Musk's previous entrepreneurial success includes being one of the co-founders of the mega-
successful payment-processing firm, PayPal (PYPL). Although Tesla has suffered setbacks,
such as a crash of one of its autopilot vehicles prototypes in May 2016, few people doubt
Musk's ability to deliver eventually on the promise that investors see in Tesla's future.
Zachary J. Kirkhorn
Having just assumed the position of Chief Financial Officer as of March 2019, Kirkhorn
succeeded Deepak Ahuja as CFO, who brought more than 20 years of global automotive
finance experience to the role. Previously, Kirkhorn assumed various finance positions within
Tesla, where he's worked since 2010. Before becoming CFO, Zach was most recently Vice
President, Finance, Financial Planning and Business Operations from December 2018 to
March 2019. Kirkhorn holds ddegrees in economics and mechanical engineering and applied
mechanics from the University of Pennsylvania and an MBA from Harvard University.
Jerome Guillen
Guillen is Tesla's President of Automotive, a role he's helmed since September 2018.
However, Guillen is no stranger to Tesla--he's been at the company since 2007 and has had
various leadership roles, including Vice President, Trucks and Other Programs as well as
Vice President, Worldwide Sales & Service. In fact, Guillen was the Model S Program
Director and has worked generally in the automotive industry for most of his career. Guillen
holds a PhD in mechanical engineering from the University of Michigan, including a dual
degree in energy technologies and mechanical engineering from Escuela Tecnica Superior de
Ingenieros Industriales and Ecole Nationale Superieure de Techniques Avancees,
respectively.
Andrew Baglino
Baglino succeeded Jeffrey Brian "JB" Straubel in October 2019, who previously held the
position of Chief Technology Officer. In contrast, Baglino took on a majority of Straubel's
responsibilities but his title is Senior Vice President, Powertrain and Energy Engineering. He
has been at Tesla since March 2006, and holds a B.S. in electrical engineering from Stanford
University.

MARKETING STRATEGY AT TESLA

Tesla does spend some  money on marketing; but it spends considerably less than its
competition. For example, Tesla spent $58.3 million on marketing costs in 2015, while Audi
and BMW spent $195 million and $196.6 million respectively.
Tesla’s marketing strategy, then, goes against the trend of developing TV advertisements and
pushing its products onto consumers. Instead, Tesla focuses on word-of-mouth advertising,
and referrals. Essentially, Tesla markets to its customers by not directly marketing to them. It
encourages others, namely customers, to do the selling for them.

The electric car company has a reputation for its unique marketing strategy and for disrupting
the automotive industry.
1. Be Authentic

Modern consumers are social media-savvy — they can tell when a brand is being
authentic or not. At Qode Media, being authentic is one of our principles for a
successful social media strategy. Your content has to be authentic in order to feel
authentic. If you make a mistake, own up to it. This will help you earn your audience's
respect. 

2. Simplify the Customer Experience

Unlike with traditional car sales, consumers looking to buy a Tesla don't have to deal
with a lengthy in-person purchasing process. Instead, ordering and configuring a
Tesla is as simple as going online.

3. Rely on Word-Of-Mouth

Tesla uses one of the most effective methods of marketing: word-of-mouth. The

brand's referral program rewards those who share their experiences with others.
Consumers tend to trust recommendations from people they know and trust —
friends, co-workers and family members — more than brand-owned channels. 

4. Connect with The Community

Building connections with the community can be the key to any brand's success. Tesla
has a solid user focus that includes customer forums and an owner club. This allows
the company to build loyalty and passion for the brand. This approach also fuels a
robust foundation of content that builds on itself and is available for prospective
buyers to peruse.

5. Be Consistent with Your Brand's Mission and Vision

While Tesla clearly wants to sell cars, the brand is also focused on leading the world
in the transition to electric vehicles and renewable energy. This thread seems to
resonate with the brand's audience and is repeated time and again.

6. Use Multiple Channels for Brand Exposure

Taking advantage of numerous public relations opportunities is a natural and seamless
way to make your brand known. While Tesla's social media channels and website
provide brand awareness, the company also has gained attention for partnering with
colleges to offer its START program. The 12-week training program helps students
gain the skills they need to work in electric car manufacturing. 
 RESPONSIVENESS

Tesla is a tech company, not just a car company. Although, some still seem to believe
otherwise. Joel Feder sparked a debate on Twitter by voicing his thoughts about Tesla. In his
tweet, he says, “Reminder: Tesla is a car company. Tesla is not a tech company. It builds cars
Tesla is creating software, a lot of software. Software is at the essence of Tesla’s unique
infotainment system, user experience, and autonomous-driving features. Tesla has implemented
over-the-air updates for years, while other automakers are just about to try this. Tesla vehicles have
operating systems designed and constantly improved by Tesla staff.

DISADVANTAGES OF THE COMPANY

1.CHARGING OF THE CAR:

While taking the car to trips, it becomes very inconvenient to stop and charge the car at
regular intervals. In every 500 miles, the car needs to be charged.
While road tripping, we already stop for a bio break, food, coffee and stopping again for
charging the car just adds on the duration of the journey. For road-tripping or long distances,
Tesla is not a very good option.
2.REGULAR PLUGGING AND UNPLUGGING:
Every time the user would start the car or stop it, it will take a minimum of 30-40 seconds.
The start of the car is not very smooth.
There are times when the car even takes longer to start or finally switch off. This shows that
the quality of the engine is a little poor or slow in case of Tesla as the pickup time is slow.
3. HIGH MAINTENANCE:
The outside body of Tesla has a coating which helps in making the car-free from dust and
rust and gives it a new look.
However, Tesla is a high maintenance car and does require regular servicing which adds up
to the overall after the cost of the car.
With the same price, one can always buy other models or brands which have a lower
maintenance cost as well as fewer efforts need to be put in to maintain the car.
     4. LACK OF SUPERCHARGING STATIONS:
A city, state or a country which lacks a supercharge station cannot accommodate Tesla.
Hence, the car can’t be used everywhere and can’t be driven anywhere.
It is very selective and it all depends on the availability of the supercharge station in the
particular area. During the way, if a supercharge station is missed by mistake, it can lead to
added time and cost. Moreover, the car will not function without energy.

CONCLUSION

Tesla Motors is an innovative company whose mission is to avoid global warming. Its
sustainability business strategy is to apply innovation and shared value. This has made
Tesla socially responsible to its environment as well as earning millions of dollars in
profit.

Their impact in the automobile industry are significant; The Triple Bottom Line shows
the significant impact Tesla has on the sustainability of their environment. They care
for their customer's safety, and also provide great health insurance to their employees
while working in a safe satellites offices. Their environmental benefits include reducing
the greenhouse effect, zero emission, renewable energy source. Even though Tesla
haven't made much profit; it's revolutionized industry had a great impact on people,
which have increased its market share. Other automotive manufacturers even began
creating hybrid vehicles, most through Tesla's patent.
 BIBLIOGRAPHY

https://www.tesla.com
https://en.wikipedia.org/wiki/Tesla,_Inc.
https://www.tesla.com/abou
https://www.britannica.com/topic/Tesla-Motors
https://www.energy.gov/articles/top-11-things-you-didnt-know-about-nikola-tesla
https://factcity.com/21-facts-you-need-to-know-about-tesla