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Tesla Inc Managment Report

Article · April 2020

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Contents
About………………………………………………………………………..3
Introduction…………………………………………………………………4
Management levels………………………………………………………….5-6
Managerial competencies…………………………………………………….6
Micro environment / stakeholders……………………………………………7-11
Macro environment…………………………………………………………..11-14
Organizational culture………………………………………………………15
Social responsibility………………………………………………………...15-17
Business ethics standards…………………………………………………...17-21
Internationalization…………………………………………………………21-22
Decision making……………………………………………………………22
Company’s strategy………………………………………………………...22-23
Daily planning……………………………………………………………... 24
Management structure……………………………………………………..25
Type of organizational structure……………………………………………25-26
Distribution of power……………………………………………………....26
Distribution of authority……………………………………………………26
Delegation of authority………………………………………………………27
Recruitment………………………………………………………………….28
Selection…………………………………………………………………….28
Socialization…………………………………………………………………28-29
Compensation of employees…………………………………………………29
Major changes and innovations the company is going through
or have already implemented in…………………………………………….29
Employees with different types of individual characteristics and behavior…30
Examples of group work and/or teamwork…………………………………30
The level of employees' motivation
tools and means the company is applying to motivate employees…………31-33
The leadership style of a top manager
or another manager selected for the analysis………………………………33
vertical and horizontal communication at the organization………………..33-34
Application of different communication technologies in the company……34-35

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Standards of control in the organization……………………………………35
Formal control systems applied by the company…………………………..36
Reference……………………………………………………………………37-38

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About:

Tesla Inc, was founded in 2003 by a group of engineers who wanted to prove that people didn’t need to
compromise to drive electric – that electric vehicles can be better, quicker and more fun to drive than gasoline
cars. Today, Tesla builds not only all-electric vehicles but also infinitely scalable clean energy generation and
storage products. Tesla believes the faster the world stops relying on fossil fuels and moves towards a zero-
emission future, the better.

All Tesla vehicles are produced at its factory in Fremont, California, where the vast majority of the
vehicle’s components are also made. To achieve our goal of having the safest factories in the world, Tesla is
taking a proactive approach to safety, requiring production employees to participate in a multi-day training
program before ever setting foot on the factory floor. From there, Tesla continues to provide on-the-job training
and track performance daily so that improvements can be made quickly. The result is that Tesla’s safety rate
continues to improve while Model 3 production ramps.

To create an entire sustainable energy ecosystem, Tesla also manufactures a unique set of energy
solutions, Powerwall, Powerpack and Solar Roof, enabling homeowners, businesses, and utilities to manage
renewable energy generation, storage, and consumption. Supporting Tesla’s automotive and energy products
is Gigafactory 1 – a facility designed to significantly reduce battery cell costs. By bringing cell production in-
house, Tesla manufactures batteries at the volumes required to meet production goals, while creating thousands
of jobs.

And this is just the beginning. With Tesla building its most affordable car yet, Tesla continues to make products
accessible and affordable to more and more people, ultimately accelerating the advent of clean transport and clean
energy production. Electric cars, batteries, and renewable energy generation and storage already exist
independently, but when combined, they become even more powerful – that’s the future we want.

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Introduction:
Most important criteria which determine the performance of the Tesla Inc, is management quality. Management
analysis is the most important parameter while analyzing a company. Tesla has emerged as one of the most
discussed and analyzed companies among management enthusiasts. This management analysis of the very
organization will reveal all the significant insights regarding every factor of Tesla’s management quality.
Moreover, the overall results of this analysis also include strategic reforms in light of all management factors, i.e.,
strength, weakness, opportunities, and threats.

This report covers and explains the entire management analysis of the Tesla Inc, in each sections, such as:

- Management levels, managerial competencies, macro environment, micro environment / stakeholders,

organizational culture.

- Social responsibility, business ethics standards, internationalization, decision making.

- Company's strategy, daily planning, governance structure, management structure, type of organizational
structure, distribution of power, distribution of authority, delegation of authority.

- Recruitment, selection, socialization, compensation of employees, major changes and innovations the
company is going through or have already implemented in, the characteristics of innovativeness, examples of
employees with different types of individual characteristics and behavior, examples of group work and/or
teamwork

- The level of employees' motivation, tools and means the company is applying to motivate employees,
the leadership style of a top manager or another manager selected for the analysis

- vertical and horizontal communication at the organization, application of different communication

technologies in the company, standards of control in the organization, formal control systems applied by the
company.

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Management levels, managerial competencies, micro environment / stakeholders, macro
environment, organizational culture

Management levels

Tesla, Inc’s(formerly Tesla Motors, Inc.) management level controls, guides the functions of the organization and
also supports continuous business growth. In this management analysis case of Tesla, the management level takes
a traditional form, considering the company’s managerial focus and control, along with limited operational
expansion worldwide. For example, as a manufacturer of electric automobiles, batteries, solar panels, and related
transportation and energy solutions, Tesla Inc. uses its management level to facilitate extensive control of the
organization. Elon Musk’s leadership effectiveness depends on the management level’s ability to disseminate and
support the implementation of new strategies for business growth and improvement. The company maximizes its
ability to implement new strategies and manage its operational activities and objectives through its management.

Tesla Inc.’s management level creates capabilities that enable strong managerial control of the business
despite its growing international operations. Growth increases complexity and challenges. Henceforth, Tesla uses
following management hierarchy level:

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I) Upper management / Top level management:
This upper / top level management consists of CEO, CFO, Chairman, and the Board. These managers are
responsible for controlling and overseeing the entire Tesla Inc. They develop goals, strategic plans, company
policies, and make decisions on the direction of the business. In addition, top-level managers play a significant
role in the mobilization of outside resources. Top-level managers are accountable to the shareholders and general
public. For example, Tesla Inc’s CFO – Mr. Zachary J Kirkhorn, manages and is also responsible for leading
accounting, financial planning and analysis, treasury, M&A, tax, investor relations and internal audit.

II) Middle level management:

Tesla Inc’s middle level management is consists of Managers, HOD’s(Head of the Department), Chief officers
for respective departments. The middle level management of Tesla Inc, form the central headquarters, which
directly control all operations. In this management level, Tesla minimally supports the autonomy of its regional
or overseas offices. The company’s headquarters make most of the decisions for overseas operations in terms of
decision making.

III) Lower level management:

This level of management includes the Foremen, Supervisors, Specialists, Asst. managers, Team leader from
respective departments. Supervisors, section leads, and foremen are examples of low-level management titles.
These managers focus on controlling and directing. Low-level managers usually have the responsibility of
Assigning employees’ tasks such as guiding and supervising employees on day-to-day activities, ensuring the
quality and quantity of production, making recommendations and suggestions; and also, up-channeling employee
problems. These managers provide basic supervision, motivation, career planning, performance feedback and
staff supervision.

Managerial competencies
Planning, organizing, innovating, leading and controlling are major processes in business. At Tesla Inc,
Conceptual skill, Human skill and Technical is expected from all the levels of management. These competencies
will help the management level in setting vision, goals, planning, resource allocation, judgement decisions making
etc. To see how these competencies come into work, please refer management level.

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Micro environment / Stakeholders
Tesla Inc’s area of operations are influenced by the factors or elements affecting the organization’s performance
and decision making. These factors include competitors, customers, distribution channels, suppliers, employees,
communities, governments, investors.

Stakeholder Role and Responsibilities

Competitors Other cars selling companies
Customers affect Tesla’s revenues and are interested in product quality and reasonable pricing,
so the firm seeks new ways of minimizing costs.
Distribution channel Tesla uses the online sales model along with company-owned stores to market its
cars for cars selling.
Suppliers Tesla Inc’s suppliers are manufactures of products and goods, that are used in the
production of a car or become part of a car.
Employees Influence Tesla Inc’s productivity and performance.
Communities group to ensure that the natural environment is conserved or protected.
Investors / Shareholders are important in influencing the Tesla Inc’s capitalization and have interests in the
/ Stockholders profitability and growth of the business

I) Competitors - Major competitors for Tesla include traditional auto companies such as Ford Motor Company,
the multinational automobile manufacturer founded in 1903; General Motors (GM), the U.S.-based automobile
manufacturer founded in 1908; Honda Motor Company (HMC), a multinational automobile manufacturer
founded in 1948; Nasdaq-listed Kandi Technologies; Navistar (NAV), commercial vehicle holding company;
Oshkosh (OSK), truck and military vehicle manufacturer, founded in 1917; PACCAR Inc., truck manufacturer;
Spartan Motors, specialty chassis and vehicle manufacturer; Tata Motors, the largest automotive manufacturer in
India; Toyota Motor Corp. (TM), a multinational automotive manufacturer; and Wabco (WBC), manufacturer of
systems for heavy-duty commercial vehicles. Federal Signal, an industrial conglomerate, can also be seen as a
competitor in the development services space.

II) Customers – we are all aware of the fact that, individuals prefer to purchase cars from Tesla’s because, of the
car’s guaranteed function, safety, quality, efficiency and most of all, the cars runs on battery consumption, which
is a huge advocate for eco-friendliness. Besides the individual who purchases cars for their personal use, there
are also other customers of Tesla Inc, such as organizations who are benefitted by the organization. For instance,

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Toyota cooperates with Tesla Inc on the development of electric vehicles, and Tesla Inc’s to receive Toyota’s
support with sourcing parts and production and engineering expertise for Model S.

III) Distribution channels - Tesla Motor’s product is unique. There are no other all-electric vehicles offered in
the luxury segment and they do not follow the traditional channels of distribution. As a matter of fact, Tesla
operates very differently in comparison to all other auto manufactures. Tesla implements a direct channel of
distribution as the company deals directly with each consumer. This method enables Tesla to maintain their own
salesforce and preform all channel functions. Like most auto manufactures, Tesla has suppliers whom they order
their raw materials from, but they assemble all vehicles under one roof unlike other manufactures. In addition,
Tesla follows an exclusive distribution because they are the only retailer of their product, which greatly differs
from most manufactures. Auto makers Ford or Toyota for example, try to place its products in as many outlets
(auto dealers) as possible to meet the market demand. As a result, consumers pay more for the vehicle because
they have to pay for intermediaries such as dealers, retailers, and distributors. While consumers can benefit from
intermediaries, Tesla prefers to keep the middle man out. As discussed previously, Tesla does not follow the
traditional distribution channels of auto manufactures; thus, several challenges have arisen. Some states including
Texas and Michigan do not allow automobile manufacturers such as Tesla to act as dealers.

As a result, Tesla has opened company-owned stores to showcase their cars. Due to various regulations
governed by each state, Tesla cannot sell vehicles out of all their stores or discuss pricing, but rather provide
information about their vehicles to help a buyer with the purchasing decision. Tesla uses the online sales model
along with company-owned stores to market its cars. For instance, when a consumer is interested in the Model 3
they can either go online to view the details of the vehicle or visit a company-owned store to physically view the
vehicle. The company-owned stores are employed with product specialist who have a vast amount of information
about Tesla’s cars and their competition’s vehicles. Furthermore, Tesla’s specialists are not commission based so
they won’t force a consumer to purchase a vehicle, which is different from the ordinary auto salesman.

IV) Suppliers – Tesla Inc’s suppliers are manufactures of products and goods, that are used in the production of
a car or become part of a car. These goods can be individual components, such as screws, or entire assemblies,
such as pre-assembled door modules. Examples of individual components are screws, bearings, seals or metal
sheets. Assemblies in turn are, for example, the E axis. Bosch presented this module at the IAA.

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 Concerned about competitors either obtaining inside information or buying out necessary parts, Tesla is
rather secretive about the more than two dozen parts suppliers for the Model S, but the majority of them have
been uncovered by diligent researchers. Tesla manufactures the basic electric components of the car – the electric
motor, the battery pack and the charger – but other parts come from suppliers spread across the U.S., Europe and
Asia.

Below is a list of some of the key suppliers for Tesla's manufacturing production, along with the
components they supply:

 AGC Automotive: windshields

 Brembo: brakes
 Fisher Dynamics: power seats
 Inteva Products: instrument panel
 Modine Manufacturing Co.: battery chiller
 Sika: acoustic dampers
 Stabilus: liftgate gas spring
 ZF Lenksysteme: power steering mechanism

Other suppliers include ADAC, ABC Group, Angell-Demmel, Argent, Gentex, Harada, Hitachi Cable
America, Hope Global, MacLean-Fogg, Magna International, Methode Electronics, Multimatic, Panasonic,
Plastomer, PSM International, Riviera, T1 Automotive, Zanini Auto Group, TXU Corp., Universal Logistics
Holdings, Inc., Affinia Group Intermediate Holdings Inc., Lithium Exploration Group, Inc., U.S. Lithium
Exploration Group, Inc., Niocorp Developments, Ltd., Rare Element Resources, Ltd., Burlington Northern Sante
Fe Corp., Cooper Industries, Ltd., Clarcor, Inc., Dana Corporation, DELPHI CORPORATION, Flowserve Corp.,
NextEra Energy, Inc., Harman International Industries Inc., Lightwave Logic, Inc., Molex Inc., Metaldyne
Performance Group Inc., Nortek, Inc., ROHM AND HAAS COMPANY, Searchlight Minerals Corp.

Still, more suppliers include: Integrys Holding, Inc., Titanium Metals Corp., Thomas & Betts Corporation,
Curaegis Technologies, Inc., Findex Com Inc., Vystar Corp., Liquidmetal Technologies Inc., Sense Technologies
Inc., Omnitek Engineering Corp., Puradyn Filter Technologies Inc., Hammer Fiber Optics Holdings Corp.,
Amerityre Corp., Zap, Telkonet Inc., CDTI Advanced Materials, THT Heat Transfer Technology Inc., Zoom
Telephonics Inc., Seachange International Inc., IEH Corporation, Arc Group Worldwide, Emcore Corp, CUI
Global Inc., NI Industries Inc., Perma-pipe International Holdings Inc., UFP Technologies Inc., Applied
Optoelectronics Inc., Paragon Offshore PLC, Universal Stainless & Allow Products Inc., Deswell Industries Inc.,

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Trecora Resources, Core Molding Technologies Inc., Supreme Industries Inc., Neophotonics Corp., Harmonic
Inc., CECO Environmental Corp., KMG Chemicals Inc., Gorman Rupp Co.,
DMC Global Inc., Avid Technology Inc., China Automotive Systems Inc., CSW Industrials Inc., Proto Labs Inc.,
Aaon Inc., Voxx International Corporation, Strattec Security Corp., CTS Corp., Bel Fuse Inc., Haynes
International Inc., Pam Transportation Services Inc., Jason Industries Inc., and Handy & Harman Ltd.

V) Employees – Are the people/individuals who are employed and currently working at Tesla Inc. They are key
holders who are responsible for the everyday functioning and making the company afloat. Tesla Inc now has
over 45,000 employees with a market cap of $40 billion.

VI) Communities – Are the environmental governors. They are not a part of Tesla Inc. But they make sure that
the natural environment is not polluted by Tesla Inc’s industrial activities.

VII) Investors / Shareholders / Stockholders – Other organizations which are important in influencing the Tesla
Inc’s capitalization and have interests in the profitability and growth of the business.

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Macro environment

This part covers the factors that determines the effects of Tesla Inc’s macro-environment of the automotive
industry, the energy generation industry, and the energy storage industry. These industries’ external factors
influence other determinants of the business, such as customers and community-based organizations. For
example, Tesla Inc.’s customer base and market share depend on factors like the cost-effectiveness of
technologies in the transportation sector. The conditions of the remote or macro-environment change, requiring
the company to change its strategies accordingly.

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I) Political Factors Affecting Tesla’s Business - This part of the management analysis of Tesla Inc, identifies
governmental impacts on businesses and their macro-environment. Governmental entities are among the main
societal forces that affect businesses and industries. For example, policies on trade can limit industry performance
and the company’s revenues. In this case, the following political external factors are significant to Tesla and the
automotive and energy solutions industries:

 Governmental incentives for electric automobiles (opportunity)

 New global trade agreements (opportunity)
 Political stability in the majority of major markets (opportunity)

Tesla, Inc. has the opportunity to strengthen its financial performance through incentives from
governments. This external factor directly relates with the minimized carbon emissions of the company’s
operations and products. In addition, this determines that expanding free trade agreements open opportunities for
the company to expand its operations internationally. On the other hand, the political stability of major markets
makes the remote or macro-environment favorable to Tesla’s generic competitive strategy and intensive growth
strategies, which include market penetration. In this part, political external factors present opportunities for
growing the automotive business.

II) Economic Factors - These conditions include market growth, trade levels, currencies, and other variables that
influence the automotive business. For example, the solar energy market’s growth rate determines the growth
opportunities of the company’s solar panel business. The following economic external factors that influence the
automotive market:

 Decreasing battery costs (opportunity)

 Decreasing renewable energy costs (opportunity)
 Economic stability issues (threat)

Tesla’s business performance benefits from lower battery costs. For example, this external factor translates
to affordability of the company’s electric automobile products. This part also considers decreasing renewable
energy costs as an external factor that makes Tesla’s products more attractive. The business improves as
renewable energy solutions become more popular. However, economic stability issues threaten the company’s
financial performance, especially in Europe and Asia. This highlights major opportunities for growth, despite the
threat of economic instability in the remote or macro-environment of the automotive industry.

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III) Social/Sociocultural Factors Influencing Tesla Inc.’s Business Environment - Social conditions and
trends affect a firm’s macro-environment through employees, customers, and investors. The company’s managers
must ensure that strategies are applied to maximize the business benefits of such external factors. The
sociocultural external factors important in Tesla’s business are as follows:

 Increasingly popularity of low-carbon lifestyles (opportunity)

 Increasing preference for renewable energy (opportunity)
 Improving wealth distribution in developing markets (opportunity)

This shows opportunities to grow the multinational automotive business. For example, Tesla Inc. has
growth opportunities based on the rising popularity of low-carbon lifestyles and increasing preference for
renewable energy. These external factors improve market demand for the company’s electric vehicles and related
products. In addition, Tesla has an opportunity to boost its financial performance based on the increasing wealth
distribution in developing markets. This wealth distribution trend increases the population of potential buyers of
the company’s relatively expensive cars. Tesla Inc can grow its business internationally, based on sociocultural
opportunities in its macro-environment.

IV) Technological Factors - determines how technologies influence the Tesla Inc’s macro-environment. The
advancement of Tesla’s automotive and energy solutions business depends on available technologies. For
example, materials engineering technology determines the efficiency and cost-effectiveness of the company’s
batteries. The following technological external factors are significant in Tesla, Inc.’s automotive business:

 High rate of technological change (opportunity & threat)

 Increasing automation in business (opportunity)
 Increasing popularity of online mobile systems (opportunity)

The high rate of technological change is an opportunity and threat. The high rate presents opportunity for
Tesla to enhance its product’s technologies. However, the same external factor threatens the company in terms of
the potential rapid obsolescence of technologies used in its products. Nonetheless, increasing business automation
is a trend that creates opportunities. For example, Tesla has growth opportunities through further automation of
its business processes. In addition, the increasing popularity of online mobile systems should prompt the company
to increasingly integrate these systems in its automobiles. The technological condition of the macro-environment

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of Tesla, Inc, emphasizes opportunities for growth based on technological enhancement.

V) Ecological/Environmental Factors - The macro-environment of the global business is subject to the effects
of Tesla Inc’s. ecological conditions. For example, ecological trends determine the availability of materials used
in the company’s production processes. In this case, the following ecological external factors affect Tesla’s
market:

 Climate change (opportunity)

 Expanding environmental programs (opportunity)
 Rising standards on waste disposal (opportunity)

Henceforth, considers ecological factors as significant forces on Tesla, Inc.’s industry environment. For
example, the company has opportunities to promote its electric vehicles based on concerns on climate change,
expanding environmental programs, and rising standards on waste disposal. The company’s electric vehicles,
batteries and solar panels are considered suitable in directly addressing these external factors linked to business
sustainability and environmentally friendly products. Tesla has significant growth opportunities based on the
nature of its products.

VI) Legal Factors- Laws and legal systems shape managerial decisions and business development. For
example, Tesla’s marketing mix or 4P are implemented within legal constraints. The company’s human resource
management and business partnerships are also within legal constraints. The following are the legal external
factors:

 Expanding international patent protection (opportunity)

 Energy consumption regulations (opportunity)
 Dealership sales regulation in the United States (opportunity & threat)

Tesla has opportunities to safely expand its business overseas, considering expanding international patent
protection. In addition, this identifies the opportunity to promote the company’s electric vehicles and energy
solutions products, based on energy consumption regulations that client organizations must follow. Also, the
business has an opportunity to grow through direct sales, which is allowed in many states in the U.S. However,
this external factor is also a threat, considering that other states do not allow direct sales and, instead, require
dealerships to transact with customers in the automotive market.

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Organizational culture
Tesla, Inc.’s (formerly Tesla Motors, Inc.) organizational culture creates human resource competence necessary
for innovative products in the global automotive business. A firm’s organizational or corporate culture represents
the customs and values that define workers’ behaviors and decisions. Tesla’s organizational culture empowers its
workforce to search for ideal solutions that make the business stand out in the automotive industry and the energy
generation and storage industry.

Social responsibility, business ethics standards, internationalization, decision making

Social responsibility

Social responsibility means that individuals and companies have a duty to act in the best interests of their
environment and society as a whole. Social responsibility, as it applies to business, is known as corporate social
responsibility (CSR). Henceforth, Tesla Inc.’s corporate social responsibility strategy (CSR) addresses some of
the major interests of the stakeholders of the automotive and energy solutions business. This relationship
emphasizes the importance of corporate social responsibility, corporate citizenship, and stakeholder management.
For example, the company affects stakeholders through the nature and design of its electric vehicles, batteries,
and solar panels, all of which address the ecological concerns of stakeholders.

Tesla, Inc. addresses stakeholders’ interests through a corporate social responsibility strategy that focuses
on sustainability and environmental friendliness of automotive, energy storage, and energy generation products.
These CSR efforts help improve the company’s position relative to competing automakers like Toyota, Honda,
Volkswagen, Nissan, and BMW etc. Corporate citizenship activities are strongly integrated into Tesla’s products
and management practices. Such corporate responsibility approach benefits stakeholders, while also boosting the
company’s corporate and brand image.

Tesla’s Stakeholder Groups & CSR Initiatives

Tesla Inc. has a corporate social responsibility strategy that focuses on the nature of the business and its products.
For example, the company’s electric automobiles are widely viewed as an answer to the negative impacts of cars
that use internal combustion engines.

The following are Tesla’s stakeholders, arranged according to the company’s CSR prioritization:

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 Communities (highest priority)
 Customers
 Employees
 Investors/Shareholders

Communities -are stakeholders that determine brand image through their significant lobbying activities and
responses to the business. One of the interests of this stakeholder group is to ensure that the natural
environment is conserved or protected. For example, communities are satisfied with the environmental
friendliness of these products. For example, in 2014, CEO Elon Musk announced that the company would
allow other individuals and organizations to use its patents. These initiatives emphasize sustainable energy
solutions, which are at the core of Tesla’s mission and vision statements.

Customers- Customers affect Tesla’s revenues and are interested in product quality and reasonable pricing.
Given such significant effect, the company gives high priority to these stakeholders in its corporate social
responsibility programs. To address such interests, the firm seeks new ways of minimizing costs. For example,
instead of continuing to buy battery cells from Panasonic, Tesla shifts to manufacture, in collaboration with
Panasonic, its own batteries to make its electric automobiles more affordable. Also, the company expands its
network of charging stations to improve accessibility for customers.

Employees- Tesla, Inc. believes that as stakeholders, employees influence business productivity and
performance, too. Their CSR interests include high compensation and significant career opportunities. Tesla’s
CSR approach satisfies these interests through a competitive compensation strategy, as well as HR programs
for skills development and leadership development. Tesla provides stress-free and friendly work environment
for the employees. Tesla’s organizational culture helps improve employee morale and minimize issues in the
workforce.

Investors/Shareholders- The stakeholders are important in influencing the company’s capitalization.

Investors and shareholders have interests in the profitability and growth of the business.

To summarize this part, Tesla’s corporate social responsibility approach addresses these interests through
long-term strategies that aim to transform the automotive/transportation and energy market. For example, the
company’s decision to allow other firms and individuals to use its technology patents is expected to increase
market demand for electric vehicles and related products. This increase in demand is expected to create

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business growth opportunities for Tesla. As a result, these CSR ideals support business growth.

Business ethics standards

Tesla aspires to be a “do the right thing” company. Certain job functions and departments at Tesla, or those
dealing with unique work situations such as transactions with governments, may be required to follow even
stricter policies. The basic policies are listed as follows:

1. Compliance with Laws, Rules and Regulations

2. Conflicts of Interest
3. Insider Trading
4. Corporate Opportunities
5. Competition and Fair Dealing
6. Gifts, Payments, Donations or the Exchange of Anything of Value
7. Discrimination and Harassment
8. Health and Safety
9. Record-Keeping
10. Confidentiality
11. Protection and Proper Use of Tesla Assets
13. Waivers of the Code of Business Conduct and Ethics
14. Reporting any Illegal or Unethical Behavior
15. Employees’ Responsibilities

1. Compliance with Laws, Rules and Regulations- Obeying the law, both in letter and in spirit, is the
foundation on which Tesla’s ethical standards are built. Respecting and obeying the laws of the places where
Tesla’s operate. Although it isn’t expected to know the details of these laws, but it is important to know
enough to determine when to seek advice from supervisors, managers or other appropriate personnel.

2. Conflicts of Interest- A “conflict of interest” exists when a person's private interest interferes, or appears
to interfere, with Tesla’s interests. It can happen when someone is in a situation that may make it difficult to
perform their Tesla work objectively and effectively, or when their position at Tesla results in improper
personal benefits for them or their family.

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 3. Insider Trading- Tesla’s employees must not use or share any Tesla confidential information for any
purpose except the conduct of Tesla business. All non-public information about Tesla should be considered
confidential information. Using non-public information for securities trading or other personal financial
benefit or to “tip” others who might do so is illegal.

4. Corporate Opportunities- Tesla’s employees may not use Tesla’s property or information or their position
at Tesla for improper personal gain, or compete directly or indirectly with Tesla, including by taking their
opportunities that they discover through Tesla. Instead, Tesla expects them to advance Tesla’s legitimate
interests.

5. Competition and Fair Dealing- Tesla seeks to compete fairly and honestly, and employees should deal
fairly and respectfully with Tesla’s customers, suppliers and competitors. Stealing or otherwise taking
proprietary or trade secret information without the owner's consent is prohibited. Employees should not take
advantage of anyone through unfair dealing practices such as:

 manipulation;
 abuse of privileged information,
 misrepresentation of material facts,
 collusion with competitors on pricing and other terms,
 violating fair bidding practices including bidding quiet periods, or
 providing information to benefit one vendor over others.
Such practices may also be illegal.

6. Gifts, Payments, Donations or the Exchange of Anything of Value- The purpose of business entertainment
and gifts with customers, suppliers or other business partners is to create good will and good working
relationships, not to gain improper advantage. Gifts or entertainment are improper, even if merely offered or
requested, unless they:

 are not in cash or equivalent to cash;

 are consistent with customary business practices,
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  are not excessive in value,
 cannot be seen as a bribe or payoff; and
 do not violate the law.

7. Discrimination and Harassment- The diversity of Tesla's employees is a tremendous asset. Tesla is firmly
committed to providing equal opportunity in all aspects of employment and do not tolerate discrimination or
harassment, including on the basis of race, color, religion, veteran status, national origin, ancestry, pregnancy
status, sex, gender identity or expression, age, marital status, mental or physical disability, medical condition,
sexual orientation, or any other characteristics protected by law, as well as any unwelcome physical or verbal
advances.

8. Health and Safety- Tesla strives to provide each employee with a safe and healthy work environment. Our
goal is to have as close to zero injuries as humanly possible and to have the safest factories in the auto
industry. Violence and threatening behavior are not permitted, and under no circumstances should you bring a
weapon to work. Employees should report to work without being under the influence of illegal drugs or alcohol.
The use of illegal drugs in the workplace will not be tolerated.

9. Record-Keeping- All of Tesla's books, records, accounts and financial statements must be maintained in
reasonable detail, must appropriately reflect Tesla's transactions and must conform both to legal requirements and
to Tesla’s system of internal controls. Unrecorded or “off the books” funds or assets should not be maintained
unless permitted by law or regulation. Records should always be retained or destroyed according to Tesla's record
retention policies. In accordance with those policies, if requested by the Legal Department to retain records, do
so until the Legal Department tells you retention is no longer necessary.

10. Confidentiality- When a candidate joins Tesla, HE/SHE signs an “Employee Non-Disclosure and Inventions
Assignment Agreement” that requires the candidate to not share any “trade secrets” or “confidential business
information” or products of Tesla, or any manufacturing process, research or development entrusted to candidate
by Tesla or its customers, except when disclosure is authorized by the Legal Department or required by laws or
regulations. As used in this Code- “Trade secrets” relate to information that Tesla maintains as secret. Examples
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of trade secrets may include information on Tesla’s research and development, inventions, products, machines,
equipment, production process, manufacturing process, engineering process, software development, systems
development or our business processes. “Confidential business information” includes, but is not limited to, non-
public financial data, such as estimates of financial performance; sensitive business information, such as
marketing strategies, product launches, and pricing policies; plans for buying or selling of corporate assets;
information about customers; and Tesla’s attorney-client communications or other internal business-related
confidential communications. The obligation to preserve “trade secrets” and “confidential business information”
continues even after employee’s relationship with Tesla ends.

11. Protection and Proper Use of Tesla Assets- Employee should protect Tesla's assets and ensure their efficient
use. Tesla assets and equipment, including Tesla-owned vehicles, should not be used for non-Tesla business,
though incidental personal use may be permitted. The obligation of employees to protect Tesla’s assets includes
its proprietary information, examples of which include “trade secrets” and “confidential business information”,
as well as other intellectual property such as patents, trademarks and copyrights. Unauthorized use or distribution
of this information would violate Tesla policy. It could also result in civil and/or criminal penalties.

12. Money Laundering / Suspicious Activities- Money laundering (i.e., using transactions to conceal the illegal
source of funds or make such funds look legitimate) is strictly prohibited. Here are some examples of suspicious
activity:

 Large payments in cash;

 Payments made in currencies atypical given the circumstances or differing from what is listed in the
contract;
 Requests for payment amounts that differ from what is required in the contract; or
 Payments made by someone or a company that is not party to the contract.

13. Waivers of the Code of Business Conduct and Ethics- Any waiver of this Code for executive officers or
directors may be made only by the Board of Directors and will be promptly disclosed, along with the reasons for
the waiver, as required by law or stock exchange regulation.

14. Reporting any Illegal or Unethical Behavior- Tesla does not to allow retaliation for reports of misconduct
by others made in good faith by employees. Employees are expected to cooperate in internal investigations of
misconduct. Any employee may submit a good faith concern regarding questionable accounting or auditing
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matters without fear of dismissal or retaliation of any kind.

15. Employees’ Responsibilities- includes being honest, punctual and finishing the given task in time.

Internationalization

While a majority of Tesla’s revenues are generated in the United States (up to 60% in 2016), its domestic market,
the company has renewed efforts to expand internationally, aiming to tap a rising transnational demand for electric
vehicles (EVs). Tesla notably targets European and Asian markets, so as to diversify its revenue streams. This
section purports to identify and evaluate Tesla’s international expansion strategy, and to offer an in-depth look at
Tesla’s approach to the Norwegian market.

Tesla Motors (TSLA) has also expanded into international markets, as can be seen in the chart above.
Tesla started delivery to Europe in August 2012, while deliveries in Asia commenced in April 2014. It has faced
some success in Europe. Tesla is already the best-selling model in Norway. However, Norway has a reputation
for being an environmentally friendly nation. The incentives provided by the Norwegian government have helped
Tesla sell more cars there. According to Tesla, its orders went up 50% year-over-year in Europe in 2015. The
growth in US orders was only about 30% over this period. Expansion into international markets is crucial for
Tesla. It will have to follow the footsteps of other US automakers such as Ford and General Motors to expand in
overseas markets. At this moment, Tesla is sold in North America (US and Canada), Europe, UK, China, Hong
Kong and Australia. Tesla’s demand exceeds supply not just in North America but across the globe. 80% Tesla’s

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made till date have been sold in North America, and rest globally with Europe leading the way, followed by
China, Hong Kong, UK and Australia. The Tesla Model 3’s 221,274 sales, no other EV model has reached 100,000
sales in 2019

Decision making
Elon musk advises his managers to follow these 6 questions below before arriving at a decision

1. Ask a question.
2. Gather as much evidence as possible about it.
3. Develop axioms based on the evidence, and try to assign a probability of truth to each one.
4. Draw a conclusion based on cogency in order to determine: Are these axioms correct, are they relevant, do they
necessarily lead to this conclusion, and with what probability?
5. Attempt to disprove the conclusion. Seek refutation from others to further help break your conclusion.
6. If nobody can invalidate your conclusion, then you're probably right, but you're not certainly right.

The top-level management makes decision on goals, strategic plans, company policies, and the direction of the
business. While the middle level management makes most of the decisions for overseas operations.

Company’s strategy, daily planning, governance structure, management structure, type of

organizational structure, distribution of power, distribution of authority, delegation of
authority

Company’s strategy

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Tesla Inc. has four company strategies. The first one is a business strategy that is entering the market with high
price level cars to target affluent buyers and then move into the lower price points. Because reaching the mass
market with low prices takes time, they first try developing their models and their parts meanwhile reaching a
high level of sales in earlier models.

The second company strategy is a production strategy that includes a high degree of vertical integration.
The company operates large factories named Gigafactory. Tesla outsources some powertrain components for its
vehicles to other suppliers. This strategy helps them to focus on producing just engine manufacturing and final
assembly.

The third company strategy is a sales strategy. Tesla sells its cars online and in company-owned
showrooms. This e-commerce strategy allows users to be able to customize and order their vehicles online.

The fourth company strategy is technology strategy that focuses on transferring new approaches from
other technology industries such as software and use it for online software updates for the vehicles they produced.

Governance Structure of the Company

Tesla has many divisions in Europe, Asia, and the USA. All divisions are controlled by headquarters in the USA.
To pursue Tesla’s objectives and benefits for stakeholders; the board of directors of Tesla has a strong structure
within directors and managers. Corporate governance consists of Managers, Board of directors and Committee.
General-purpose of this structure is explained in the guideline which is established by the board of governance.
Some Purposes of this structure are:

 The integrity of the Company’s financial statements

 The company’s compliance with regulatory requirements
 The company’s internal accounting and financial controls
 The company’s risk management including security and data privacy
 Evaluation and nomination of director candidates

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Daily planning

Manufacturing Dept (Daily planning, daily execution)- Daily planning of Producing, assembling number of orders in a
given day. HR Dept (Daily planning, weekly execution)- Plans to recruit suitable candidates for open positions. Sales
Dept (Daily planning, Monthly execution)- Plans in order to achieve a certain amount of sales in a given month. Quality
Management Dept (daily planning, daily execution)- looks after every Depts quality of work. Innovation/Vision Dept
(Daily planning, Monthly execution)- Strives to arrive at new ideas, visions, assets for production. Technological Dept
(Planning and executing only during defection period)- Deals with inventing, implementing new software, AI etc. within
the firm. Finance/Account Dept (Daily planning, Monthly execution)- Makes sure that company has sufficient assets for
buying products, paying employees, also makes sure that the assets are circulating and increasing. Supply Chain and
Logistics Dept (daily planning, daily execution)- Delivers required assets to every depts on an everyday basis.

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Management Structure of the Company
Tesla has 2 executive members for the strategic decision making. Tesla Inc. uses functional organizational
structure. These functional departments such as HR, Finance and Sales department operate under the board of
directors and Chief Executive Officers.

Each department has middle managers and specialists, recruiters, foremen, salesman and workers under
these manager’s control.

Type of Organizational Structure

Tesla has a functional organizational structure. For instance, employees for engineering and sales and service for
another department. Following characteristics show Tesla’s organization structure:

Function-based hierarchy- The most significant characteristic of Tesla’s organizational structure is this function
involving teams controlling domestic and international operations. The following list shows Tesla’s functional
offices represents its global activities;

 Chairman & Chief Executive Officer

 Finance
 Technology
 Global Sales and Service
 Engineering
 Legal
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Centralization- Tesla Inc. uses centralization to control its divisions in other continents. The head of the global
hierarchy is corporate’s central headquarters which directly controls all operations.

Divisions- Divisions of Tesla in other countries have different strategies, marketing campaigns. The reports to
the headquarters of the company. Tesla’s main divisions in its corporate structure are;
1. Automotive
2. Energy Generation and Storage

Also, Tesla’s organizational structure has the following geographical divisions mainly used for financial
reporting: (1) the United States, (2) China, (3) Norway, and (4) Other.

Distribution of power in the company

The company has many divisions globally and hierarchy in these divisions is connected to the top-level managers.
General strategies of the company are determined by the chief executive officers but when it comes to advertising
campaigns and meeting the customer needs, all divisions are creating their regional strategies in sales and
marketing. In addition to this, these divisions report to the headquarter to meet with the organization's goal and
general strategies of Tesla Inc.

Distribution of Authority in the Company

Distribution of authority is important for a company that has many divisions globally. Tesla Inc. uses
centralization to control its divisions. But, because of the cultural differences and different expectations by the
customer, each division of Tesla uses different strategies by pursuing organization goals. In order to have a
successful centralization in such companies, collaborative leadership is the key. The Distribution of authority
in Tesla solely resides on the hierarchy of the employee's position. The CEO, Board primarily prevails with the
highest authority over heads of the departments (HOD), managers, chief executive officers. The heads of the
departments (HOD), managers, chief executive officers exercise their authority over the employees in their
respective departments, whom they are directing and managing. They also play a crucial role in decision making
in their respective departments.

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Delegation of Authority in the Company
The CEO, Board, HQs oversee, directs, controls domestic and international operations through managers, HODs,
chief officers from each respective dept. Managers, HODs, chief officers made accountable and liable for the
actions, decisions emerging from their respective dept. Unlike other companies, Tesla’s managers, HODs, chief
officers has to work more than their sub-ordinates, underlings, so that the people to whom they are responsible
for are served sufficiently and accurately. They also possess a crucial role for motivating their juniors to increase
the effectiveness and efficiency of the staffs apart from the delegation.

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Recruitment, selection, socialization, compensation of employees, major changes and
innovations the company is going through or have already implemented in, the
characteristics of innovativeness, examples of employees with different types of individual
characteristics and behavior, examples of group work and/or teamwork

Recruitment
Recruitment generally is a process of attracting and selecting suitable candidates for certain positions.
The recruitment process of Tesla’s Inc, is divided into 5 stages. Application- on the online platform the applicants
can update, edit and finally send the curriculum vitae to the company via online (through company’s website).
Phone Interview- The Hiring Manager will call the applicant and might ask questions regarding applicant’s
interest in the company and basic skills, and schedule an interview. Interview(s)- Could take a while and contain
several rounds with the professional managers and other relevant interviewers. After the interview, the managers
will consider the applicants whom they seem fit as potential candidates. And candidates will be called in for the
exam. Exam- An important part of this step is the Hogan Personality test. This is an assessment of applicant’s
personality in the workplace, which predicts candidate’s potential performance based on their strengths,
weaknesses, values, and problem- solving approaches. When the candidates pass the exam, they will be called
upon to the assessment center. Assessment Centre- If the candidates are invited to the Tesla Group Assessment
Centre, they will spend a day or two engaging in various activities that may include: a presentation, participating
in group’s discussions, acting out different scenarios, and role playing. Also, they will be taking tests and have
several interviews. Assessment centers offer a more precise means of evaluating prospective employees
than interviews and exams.

Selection
The candidates who had performed, passed all the tasks with flying colors, and more importantly, seem fit to the
appropriate position to which they applied for in the managers eyes, will be selected and recruited into Tesla Inc,
by the managers.

Socialization
Socialization of the employees is an important process designed to help them fit smoothly into the organization.
This step should not be skipped when introducing new people to the company as it is crucial to introduce them to
the company’s culture and traditions from the very start. With that being said, Tesla treats every employee with
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care, the same applies to a newly hired freshers who just came to this company. Every new hire has a coach who
coordinates them and explains their new work and responsibilities. All hires have orientation for a day. Next
comes a day of "manufacturing essentials," where employees learn their way around the factory. Production
workers then get two days of "manufacturing fundamentals”.

Compensation of employees
This refers to the benefits (cash, vacation, etc.) that an employee receives in exchange for the service they provide
to their employer. Employee compensation is generally one of the largest costs or expenses for Tesla Inc, because
the employee’s with crucial work requirements are expected to work more that 60 hours per week. To support
this case, Tesla’s pays the employees who are working overtime with mesmerizing wages. Additionally, Bonuses
are awarded to the employees on the spot, to those who had strived and successfully arrived at new ideas for
solving a crucial problem, or also innovated a new idea which will turn out to be benefiting for the Tesla Inc,
during the present or in the future. Promotions are given to the employees who seems to possess more potential,
and certainly, could achieve more if they would be placed in the higher position.

Tesla salary ranges by a job title. Here are some examples of average salary for different job title in the U.S.:

• Project manager - ≈ $86.000/y

• Production supervisor - ≈ $86.200/y

• Software engineer - ≈ $122.000/y

• Manufacturing engineer - ≈ $104.000/y

• Sales consultant - ≈ $138.000/y

Major changes and innovations the company is going through or have already implemented
Innovation at Tesla Inc. is more than generating the next big idea—it involves how to implement the ideas that
make it out of the gate, and how to build the culture to sustain the creation of those ideas. Thus, innovation’s
ability to modify strategy is critical at Tesla Inc. For instance, The Tesla’s CEO, Board tries to automate a
maximum number of tasks through artificial intelligence, robots that employees do not like to do very much, this
innovation allows making the work more interesting and fascinating. In a word, this can be called the
characteristics of innovativeness at tesla, given to computer programs that perform all the monotonous routine
work.

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Examples of employees with different types of individual characteristics and behavior
For this scenario, Tesla Inc’s. low level managers will be a perfect example. Because, the low-level managers
usually have the responsibility of Assigning employees’ tasks such as guiding and supervising employees on day-
to-day activities, ensuring the quality and quantity of production, making recommendations and suggestions; and
also, up-channeling employee problems.

With that said, the low-level managers possess extreme qualities of characteristics such as leadership
skills, organizational skills, communication skills, active listening skills, honesty, ambitious, strong work ethics.
They behave in a highly active manner to provide for their underlings needs, in order to accelerate the underling’s
rate of work or productivity. They are extremely humble in motivating their underlings. And they mostly behave
like an empty cup rather than a full one, because the low-level managers are always open for new idea from their
underlings.

Examples of group work and/or teamwork

The workers (fabricators, assemblers of manufacture dept) in the giga factory, works on several cars at a given
time. The heavy materials, components must be carried out by the workers using simple machines before. By
explaining this issue to the HOD by the foremen, the HOD forwarded this issue to top-level management. The
top-management approved to resolve this issue by letting, both the manufacturing and technological department
to collaborate and work together to come up with an idea of inventing a simple AI which is programmed to deliver
heavy materials in the giga factory to the workers in order to reduce the physical stress and time consumption.

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The level of employees' motivation at the company, tools and means the company is
applying to motivate employees, the leadership style of a top manager or another manager
selected for the analysis

The level of employees’ motivation and tools and means the company uses

Motivating the employees is very important thing for Tesla Inc. Motivated employees can lead to increased
productivity and allow an organization to achieve higher levels of output. Not motivated employees will probably
use the time at their desk surfing the internet for personal pleasure or even looking for another job. This is a waste
of time and resources. This perfectly explains why it is so important to keep employees motivated and satisfied.
Tesla wants to keep its staff motivated, dedicated, and engaged with their work. Therefore, whenever an
employee does more work than he/she is assigned and required to or finds a new initiative idea which leads to
increase the assets of the company, their efforts will be rewarded in terms of

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 Bonus(money). Promotions are given to the employees who seems to possess more potential, and certainly, could
achieve more if they would be placed in the higher position. The level of worker’s motivation is also raised by
providing a lot of profitable benefits which can be used during they work or outside. All those benefits are
accurately provided in the table below.

№ Benefits Description
1 Health insurance Coverage of a wide variety of healthcare services

2 Dental insurance Cover basic and preventive services such as complete oral exams and teeth
cleanings, as well as major services.
3 Vision coverage Refund employees $200 per 24 months for prescription glasses, contact lenses and
laser eye surgery.
4 Retirement Savings Plan Employees can put aside pre-tax dollars from their paycheck and invest them in a
variety of investment options
5 Employee Stock Purchase Plan Employees can purchase company stock at a 15% discount off the market price.

6 Equity Incentive Plan Gives all employees a chance to own part of the company they are working for.

7 Long Term Disability Tesla will pay employees 60% of their monthly earnings up to a maximum benefit
of $5,000 after 119 days of not working due to medical incapability.
8 Short Term Disability Employees are entitled to a period of 17 weeks during which Tesla pays 66.7% of
their weekly earnings, to a maximum of $1,000 per week.
9 Life Insurance If an employee dies before reaching age 65, their beneficiaries will receive a lump-
sum payment of two times the employee's annual earnings, to a maximum of
$1,000,000.
10 Accidental Death & The lump-sum compensation is two times your annual earnings, to a maximum of
Dismemberment Insurance $1,000,000.
11 Employee Discount Employees can receive up to 35% off Tesla products and services.

12 Business Travel Insurance Comprehensive travel insurance if employees are traveling for business.

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13 Employee Assistance Program Gives support to employees 24 hours a day, 365 days a year. Can be used for any
issues, concerns, or hardships.

The leadership style of a top manager or another manager selected for the analysis
Generally, all the managers, chief officers, HOD’s of tesla are expected to work harder than those who report to
them and always make sure that their needs are taken care of before theirs, thus leading by example. For this
scenario, Tesla Inc’s. low level managers will be a perfect example. Because, the low-level managers usually
have the responsibility of Assigning employees’ tasks such as guiding and supervising employees on day-to-day
activities, ensuring the quality and quantity of production, making recommendations and suggestions; and also,
up-channeling employee problems.

With that said, the low-level managers possess extreme qualities of characteristics such as leadership
skills, organizational skills, communication skills, active listening skills, honesty, ambitious, strong work ethics.
They behave in a highly active manner to provide for their underlings needs, in order to accelerate the underling’s
rate of work or productivity. They are extremely humble in motivating their underlings. And they mostly behave
like an empty cup rather than a full one, because the low-level managers are always open for new idea from their
underlings.

Vertical and horizontal communication at the organization, application of different

communication technologies in the company, standards of control in the organization,
formal control systems applied by the company.

Vertical and horizontal communication

Vertical communication is the communication where information or messages flows between or among the
subordinates and superiors of the organization. Without communicating with superior and subordinate, no
organization runs a single day. Communication without the upper level and the lower level employee is very
much essential for the organization. Tesla Inc. is controlled through a vertical hierarchy, with decision-making
authority residing with the company’s upper management. Daily and routine decisions are made by the line
managers at the middle level. Tesla Inc. has the same vertical and horizontal communication processes as the
other big companies with a vertical hierarchy but with some differences.

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 There are two schools of thought about how information should flow within companies. By far the most
common way is a chain of command, which means that always flow of communication through your manager.
And according to Elon Musk, this is incredibly “dumb”. Anyone at Tesla can and should email/talk to anyone
else according to what they think is the fastest way to solve a problem for the benefit of the whole company. They
can talk to their manager's manager without his permission, workers can talk directly to a VP in another dept,
they can directly talk to Elon Musk, workers can talk to anyone without anyone else's permission. Elon Musk
states: “The point here is not random chitchat, but rather ensuring that we execute ultra-fast and well. We
obviously cannot compete with the big car companies in size, so we must do so with intelligence and agility.”

Application of different communication technologies

Tesla Inc. is a high-tech electric automobile company with a lot of departments and factories. And as such a
company, they have lots of tasks, different processes, and problems. Sometimes a problem or a question can occur
at the factory and only the central department can provide a solution for this. To be capable of all those things
Tesla Inc. workers must communicate with each other. There are some of the most used communication
technologies applied in Tesla Inc.:

I) Mobile phones
Advantages:
 Accessibility – The biggest advantage of using mobile phones for communication is its accessibility. The
mobile calls won’t be missed and will be answered even during lunchtime.

 Organization and structure – Managers and top managers can hold a huge amount of important contacts
like names, email addresses, names, etc.

 Mobile internet – phones provide stable all-time access to the internet.

Disadvantages:
 Costs – always using mobile phones and mobile internet can be expensive. However, it is possible to
choose a tariff that suits the business.

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II)Emails
Advantages:

 Incredibly fast – workers can deliver emails to the receivers in a few seconds.

Disadvantages:

 Possibility of late response – emails can be delivered fast but it doesn’t mean that the receiver will read
and answer this email instantly due to other work or other duties.

III)Video calls
Advantages:
 Several participants – video calls can be used for talking one-o-one or several people can participate during
the call. So, it can be used instead of organizes meetings which is more time consuming the video calls.

 Visual expression – lots of communication cues and tricks are lost during the common call which can
make conversation a bit awkward. But video calls eliminate such a problem by providing a possibility to
see facial expression, hand movements, etc. of a person by the other line.

Disadvantages:
 Unreliable – some users do not prefer video calls because they feel that technology is unreliable. For
example, due to the weak internet connection, it is impossible to make a good video call because the video
will freeze, stop, etc.

Standards of control
When it comes to Tesla Inc. the first thing that comes in mind is the cars are eco-friendly and a higher quality of
their electric cars with a unique board system and autopilot. Tesla Inc. is a company which always do their best
and try to do better than it was before. It is easy to understand by looking at their list of products. Each new model
of Tesla has more functionalities, improved “brains” (car operational system), improved “body” of the car, better
components, and materials than the previous model.
The second thought which comes in mind is the safety of Tesla cars. Safety control is a very important thing in
the automotive industry, especially when it comes to electric cars with a clever onboard system (car operational
system).

`35
Formal control system
Based on the customer requirements and regulatory standards, quality management has become a significant
strategy for every industry especially Automotive. It ensures that the company is following the right processes,
workflows, and attitude to serve customers’ expectations with respect to quality. That is why Tesla Inc. pays a lot
of attention to the standards of control in their company. Both for quality and safety control they are using Quality
Management System. The Quality Management System is something that automotive manufacturers and suppliers
cannot ignore at any phase of the production process.

Quality Management System includes:

I) Quality control
The Quality control process begins long before the first production model comes out of the assembly line. When
Tesla announces their new product, they build a prototype which they test for a long time to find any problems
and issues it may have. Once this step is done, the design goes into production, where quality control continuous
on the production line. After being built, each unit is tested again to find any problems and weaknesses. Then
goes an extreme test. After all of those processes are done their new product is almost ready for implementation.

II) Safety control

• The Safety control process is aimed to ensure that the future user will be able to use the car safely. Software
engineers are testing their car operational system in order to find any possible bugs and other problems.
After the Safety control process is done the product is ready.

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• Reference
https://www.inc.com/justin-bariso/this-email-from-elon-musk-to-tesla-employees-descr.html

• https://www.businessinsider.com/tesla-elon-musk-how-to-communicate-2017-8

• https://auto.howstuffworks.com/under-the-hood/auto-manufacturing/automotive-quality-control.htm

• https://www.tesla.com/support/car-security-features

• https://www.tesla.com/VehicleSafetyReport

• http://www.yourarticlelibrary.com/accounting/company-accounts/management-control-system-definition-
characteristics-and-factors/52963

• https://futurefuel.io/employee-benefits/tesla-careers/

• https://ir.tesla.com/management/zachary-kirkhorn

• https://ir.tesla.com/management/elon-musk

• https://marketrealist.com/2019/01/elon-musk-tries-to-motivate-tesla-employees-keeping-their-jobs/

• https://www.businessinsider.com/elon-musk-productivity-tips-for-tesla-employees-2018-4

• http://www.ejinsight.com/20180525-tesla-s-new-hiring-strategy/

• https://www.fastcompany.com/90460147/this-sex-toy-pioneer-explains-how-to-have-a-very-happy-
valentines-day
• https://www.jobtestprep.co.uk/tesla-motors-assessments
• http://panmore.com/tesla-motors-inc-organizational-culture-characteristics-analysis
• https://www.indeed.com/cmp/Tesla/salaries

• http://panmore.com/tesla-motors-inc-operations-management-10-decisions-areas-productivity

• https://www.google.com/search?q=functional+management+structure+tesla+inc&tbm=isch&ved=2ahUKE
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cCegQIABAA&oq=functional+management+structure+tesla+inc&gs_l=img.3...11445.13185..13440...0.0..0.
177.714.9j1......0....1..gws-wiz-img.......0i30.vjfXrFZH-
iU&ei=tiU8XryhEZKGqwHXk6aAAw&bih=842&biw=1920&rlz=1C1CHBF_enLT811LT811#imgrc=e9Y
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• http://panmore.com/tesla-motors-inc-organizational-structure-characteristics-analysis
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 • https://ir.tesla.com/committee-details/disclosure-controls-committee-charter

• https://ir.tesla.com/corporate-governance/management

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