A Critical review on Leadership: A Case Study

on Elon Musk’s Leadership Style

Module Name: Leading Change

Submitted to

David Muwara
Professor
London Campus
University of the West of Scotland

Submitted by

Kamal Uddin
Banner Id. B00334796
MBA-C12
London Campus, UWS

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 Table of Contents

Topics Page No.

Introduction 03

A critical study on Management and Leadership 03-04

What are the similarities in between leadership and management 04

What are differences between leader and manager 04-05

Elon Musk is a Leader 05-06

Application of Leadership Theories to analyze Musk’s leadership style 06-08

Explanation of Musk both positive and Negative sides of Leadership style 08-09

SWOT analysis of Tesla and the Future of the Company 09

Does Tasla Need a Manager or Leader 10
Comperison between Future leader of Tesla and Elon Musk Validity 10
Conclusion 11
Reference 11

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Introduction

There are many disputes in between leadership and management. Some scholars believe
that Leadership is the task of manager; while others said that management is the skill of
leader. Moreover, there are some skills and characteristics which are equally possessed by
leader and manager. This paper will illustrate whether Elon Musk Leader or Manager with
literature. He is successful entrepreneur in business and is this success will continue over
next future.

Many schools and academic theories are available to demonstrate the leadership style. A
few theories suggest that leaders are born; while others defines that leaders are built. For
example Trait theories support that leaders are born with some qualities which stimulate
them to become a good leader. On the other hand, behavioural theory suggests that people
can learn leadership quality from environment and situations. This study will demonstrate the
leadership’s schools by using examples from Elon Musk case. Thy study will try to find out
whether Elon Musk is perfect Leader or manager for TESLA or not through industry and
leadership analysis.

A critical study on Management and Leadership

Management is the enactment or any regulations of holding people at one place to achieve
the organizational aimed objectives and goals by usage available resources more efficiently
and effectively. It is a process to use man, material and resources efficiently to acquire the
organizational specific objectives. It handles the organization whether the organization is
profit motive or non-profit motive or a business or a government body. Management has the
three important criteria. These are:

a. It is a sequence of engaging and connected performances;

b. It embarrasses and concentrates on extending organizational objectives and goals.
c. It gains these motives by collecting people together and using organizational resources
efficiently.

In an organization, management perform these functions like as; planning, organizing,

staffing, directing, controlling or monitoring and motivation. Management is liable for the
composition and effectuation of an organizational or business policies and strategies.

Leadership is a process by which an executive can forthright, guide and influence people to
change behaviour and work for others towards accomplish the specific goals in a given

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situation. It is the sufficiency of any individual or a manager to inspire the inferior to work with
belief and enthusiasm. Actually, it is the capacity to notify in an assertive manner and
encourage others. Leadership has some characteristics such as follower, leader,
reciprocality, influence, situational and sharing function. The leadership style varies with the
types of people the leader interlude and negotiates with. Some of the leadership style as;
autocratic leadership style where the leader has complete command and hold over their
team, the laissez faire leadership style where the leader totally believes the team to perform
the job themselves, democratic leadership style where leaders invite and inspire the team
members to play important in decision making process and bureaucratic leadership style
where leaders strictly adhere to the organizational rules and policies. Finally, leadership
accomplish the available resources of an organization and conducts a team of people to
utilize the resources towards achieving the organizational goals.

Difference between Leadership and Management:

The Difference between Leadership and Management are discussed in the following table:

Basis for comparison Leadership Management

1. Definition Leadership is the ability of a Management is the act

person to influence other to getting people together to
acquire the goals by work for the purpose of
following a particular course achieving specific goals.
of action.

2. Orientation It is people oriented. It is task oriented.

3.Concentration Its concentration is to leading Its concentration is to

the people. manage the work.

4.Way to risk Leadership is risk taking. Management is risk averse.

5.Character in decision It is facilitative. It is entangle.

making

6. Styles It follows motivational style. It follows authoritarian.

7. Power through Charismal and influence. Formal authority and

position.

8. Organization In leadership, leaders have In management, managers

followers. have subordinates.

9. Stability Leadership is temporary. Management is more stable.

10. Mutual relationship All leaders are not All managers are leaders.
managers.

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Similarities between Management and Leadership:
Management and leadership are the two terms that are sometimes used as synonymous
words. For effective management of the organization, leadership plays an important role
towards achieving the organizational goals. Leadership is the skill of an individual that
ascertains how he manage his manpower and monitors them to get the progress and
achievement within moment; on the other hand, management connotates his skill to practice
provisions for the sources that he concernment to acquire the milestones within period. So,
both the terms leadership and management are two interrelated part of an organization. Any
organization can not completely define the management without leadership. To perform the
management functions efficiently, it is important to build the leadership qualities within a
manager. Therefore, leadership and management have correlation between them. Now, the
similarities between management and leadership are discussed in the below:

Identity Management and Leadership

1. Surround Management and leadership entail working with group of people

and surround the people only.

2. Functional structure Management and leadership simultaneously prepare the

functional structure of the organization.

3. Influence Management and leadership influence the both work structure

and environment.

4. Achievement Management and leadership are related with goal achievement.

5. Allocation Management and leaderships main purpose is to allocate

available resources and used these resources effectively and
efficiently.

Elon Musk is a Leader

The management theories and Leadership theories will assists whether Musk leader or not.
Many scholars define management as a combination of four functions such as planning the
future, organizing all the resources, leading the organization toward goals and controlling the
outcomes (Hussein, 2015). However, leadership is the process of influencing people to
achieve a common goal (Northouse, 2010). Both manager and leader has common thing
that their all efforts toward gaining objectives and goals (Khan, 2015). Moreover, Leadership
and management have some distinctions on their approach of achieving goals.

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 The Difference between a Leader and a Manager
Leadership is about... Management is about...
Produce Change and Produce order and
movement consistency
What are we setting out to Establishing direction: Planning and Budgeting:
do? Developing a vision and Establishing detailed steps
strategies to achieve that and timetables and allocating
vision. resources.
How do we deliver results? Aligning people: Organizing and staffing:
communicate to direct the structuring the organization,
teams to understand vision delegating authority and
and strategy. providing policies and
procedures.
How do we make it happen? Motivating, mentoring, and Controlling and problem
inspiring: energizing people solving: monitoring and
to develop and overcome organizing
barriers to change.
What are the outcomes? Producing change: often Producing predictability
dramatic degree such as and order: Consistently
creating new service or achieving budget and targets
approach.
Source: John Kotter, what leaders really do, Harvard business review

Figure 1. The Difference Between Leadership and Management (MacKay 2008)

It is pretty clear that Mr. Musk is a leader because he has Clear vision for his company, to
acquire this he has mission and dedication, and he is determined to over the barriers. He
has great power to stimulate people to believe in his vision.

Application of Leadership Theories to analyze Musk’s leadership style

It is very difficult to analyze the leadership style of Mr. Musk by using one specific leadership
style. As a leader, he is founder and co founder of many renewed organizations; where he
played many roles and faced ups and downs.

Elon Musk is both transformational Leader and Transactional leader

Burns (1978) who talk about transformational and transactional leadership concept in his
research on political Leadership. He says that A transformational leader brings best
outcomes of his followers or employees through his influence and supervision. Conger and
Kanungo (1998) denotes that a transformational leader transform goals into extreme needs
of followers ; So, the followers gives their best efforts to achieve it. Kuhnert & Lewis, (1987)
illustrates Transactional leaders focuses on exchange ; this type of leader create a systems
in which the followers will get something by doing something for leader.

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Bass (1985) suggests dimensions of transformational and transactional leaderships. These
dimensions are below table.

Dimensions of Transformational Dimensions of transactional leadership

leadership
Charisma or idealized influence Contingent reward
Inspirational motivation Management by exception—active,
Intellectual stimulation Management by exception—passive
Individualized consideration

Idealized influence; Mr. Musk has influence on the thoughts and beliefs of his employee,
Dolly Singh, former HR head at SpaceX, says about Elon Musk, “The thing that makes Elon
Elon is his ability to make people believe in his vision.”

Inspirational motivation: it means the leader is able to form the vision which will be appealing
and motivating to followers. The leader is more optimistic and provide guidelines to followers
to achieve the task. Mr. Musk has failed many times in landing the rocket on land but he
didn’t loos his last hope. But finally he was successful to land Rocket in the land in 2018.
The first engineer of SpaceX’s mr. Jim Cantrell, tells about Musk “…Most of us can’t
conceive these things working; he can’t conceive it failing.”

Intellectual stimulation: the leader has mentality to take risks and ability to increase the
creativity of his subordinates. Falcon1 rocket was failed in its initial three attempts which
causes huge loses for SpaceX. Mr. Musk motivates his employees and encourage on their
creativity and innovation. He encouraged engineer to work 100 hours per weeks (ReVolve,
2018). Once in a interview Mr. Mark says ”Think big, take challenges and control emotions.”
(Business Insider, 2018)

Individualized consideration: this concept illustrates how the leader take care of his followers
needs and pay attention to their concerns. Musk reseved a whole movie theater for
employees to watch "The Martian" (Business Insider, 2018). In the youtube, there are many
videos shown that He works with his employee on the floor and observe problems and
provide guidelines (YouTube, 2018).

Contingent reward : it is give and take perspective where leader negotiate with follower for
reward of particular behaviour and task. the leader who show contingent reward which
indicates that he/she is a good communicators (Neufeld et al., 2010). Contingent reward
help leader to stimulate the performance of followers (Bass &. Avolio, 1990). Mr. Musk was
able to communicate effectively with employess. As a result, he achieved his goals through
employees hard work.

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Management by Exception (active): The leader became a supervisor and give suggestion to
improve performance of followers. Mr. Musk is always monitoring the work of his employees
and give them direction and take corrective initiative.

Management by Exception (passive): it implies that leader will help the followers after
something serious happened. Elon Musk was with his employees but didn’t interfare with
their work.

Elon Musk’s Middle of The Road Leadership Style

The position of Elon Musk in Blake and Mouton (1994) classified five leadership based on
below Chart.

Figure: Blake and Mouton Managerial grid

Impoverishment Leadership: this leader is indifferent about task and people concern. They
concern about finishing their job. Their performance level is disorganised and dissatisfactory.

Country Club Leadership: the leader establish good working environment and less concern
about task.

Task Leadership: this type of leader follow autocratic leadership style. They just concern
about task and production. According to Theory X, Leader have to be strict to do the job

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Team Leadership: employees are being involved indecision making and be motivated and
highly perform their work. According to McGregor Theory Y, employess performance also
high.

Middle of the Road Leadership: this is known as less effective leadership style. Leader
compromise both production and consciousness about people. The research claims that
Mr. Musk is well concern for people along with much concern for task.

Explanation of Musk both positive and Negative sides of Leadership style

Every leader has some good and bad sides of their leadership. Here is a brief discussion of
Elon Musk’s both side of leadership.

Good Planner: Mr. Musk plan every single task even though his daily life. One of the Space
X engineers Kevin Brogan who is engineer of Musk team of Space X mentions the Musk
insist everyone to make day by day plans.

Visionary leadership: Mr. Musk can imagine the future. Dolly Singh, manager at
Space X, says “ His vision is specific and clear to everyone. He can stimulate
anyone toward his vision.”

Creativity: he said his employees that creativity is important to progress. He

always encourage employees to think out of box.

Collaborative: Mr. Musk says organization is a like a football team, the talented
players with strategy will win.

Insane work ethic: He work hard and even 100 hours in a week. His mentality to
work facilitates his employees to work hard.

On the other hand, Mr. Musk has some negative sides of his leadership such as
Introvert personality: Mr. Musk hided his emotions . his ten year chid death but he
was calm and didn’t show grieve publically. His colleague claims that Mr. Musk is
lack of communication and emotional intelligence.

SWOT Analysis for TESLA and the Future of the Company

Tesla is a electric motor car company which established in 2003. It has four models of cars
such as MODEL S, MODEL X, MODEL 3, and ROADSTER.

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Strengths Weaknesses Opportunities Threats
• Energy efficient • Lack of • Large market • Laws restricting
cars economies of segment sales
• Attractive tech scale • Opportunities to • Competitors are
and design • Low sales growth integration entering the
• Brand image • Dependent on • Consumer market.
• Experienced innovation awareness
management and • Production delays • Low material cost
leadership • Globalization
• Unique strategic
policies
• Low production
cost

Does Tesla Need a Manager or Leader?

Tesla has a visionary mission to move the world in sustainable energy. The study identifies
that Tesla need a leader to run its operations and gain its mission. The top position of this
company need someone who has leadership skills, strategic business planning
skills,marketing skills, sales and CR skills, communication skills, management skills.

Comperison between Future leader of Tesla and Elon Musk potentiality

This chart will compare whether Mr. Musk is potential for Tesla or not.

Skills of future leader of Tesla Skills of Elon Musk

Creative and Innovative Creative and innovative person
Entrepreneurial skills He is a successful entrepreneur
Technical skills He prefer to work with employee at floor
Leadership skills He led many successful organization
Team management skill He has experience leading team successfully
Patience and industrious He is a self motivated person
Communication and interpersonal skills He has great influence in his employees
which prove his these skills

Conclusion

Leadership is essential for top and middle level managerial job in organization. A leader can
change the scenario of the organization. The time is changing and companies are finding
people are not only manger but also leader. Tesla is a innovative and fast growing company.
so, it need someone with great interpersonal, technical and conceptual skilled person to
lead. Elon Musk colud be a better option for Tesla.

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Reference:

Bass, B.M. & Avolio, B.J. (Eds.). (1994). Improving organizational effectiveness through
transformational leadership. Thousand Oaks, CA: Sage Publications.

Bass, B. M. (1998). Transformational leadership: Industrial, military, and educational impact. Mahwah,
NJ: Erlbaum

Blake, R. and Mouton, J. (1994). The managerial grid. Houston: Gulf Pub.

Burns, J. M. (1978). Leadership. New York, Harper & Row.

Business Insider. (2018). Former SpaceX worker reveals 7 outrageous perks Elon Musk gives
employees. [online] Available at: http://uk.businessinsider.com/spacex-worker-company-culture-2017-
11 [Accessed 17 Mar. 2018].

Hussein, Y. (2015). Lipid Management. Cham: Springer International Publishing.

Khan, R (2015), leadership secret in Asia, Panjari pokashoni, Dhaka

Kuhnert, K. and Lewis, P. (1987). Transactional and Transformational Leadership: A

Constructive/Developmental Analysis. Academy of Management Review, 12(4), pp.648-657.

Neufeld KM Kang N Bienenstock J Foster JA (2011) Reduced anxiety-like behavior and central
neurochemical change in germ-free mice. Neurogastroenterol Motil 23:255–265.

ReVolve. (2018). The Transformational Leadership Style of Elon Musk. [online] Available at:
http://www.boothco.com/360-feedback-resources/leadership-style-of-elon-musk/ [Accessed 17 Mar.
2018].

Northouse, P. (2010). Leadership. Thousand Oaks: Sage.

YouTube. (2018). Elon Musk Tour of SpaceX. [online] Available at: https://youtu.be/P8i5fDwMBNc
[Accessed 17 Mar. 2018].

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