Tesla Motors. Inc.’s Organizational Culture, Characteristics (An Analysis)

Tesla Motors, Inc. organizational culture and corporate culture characteristics, pros, cons, automotive case study and analysis
A Tesla Model S Prototype at the 2009 Frankfurt Motor Show. The characteristics of Tesla Motors, Inc.’s organizational culture enable innovation and responsiveness of the automotive business. (Photo: Public Domain)

Tesla Motors, Inc.’s organizational culture creates human resource competence necessary for innovative products in the automotive business. A firm’s organizational or corporate culture represents the customs and values that define workers’ behaviors and decision-making. Tesla’s organizational culture empowers its human resources to search for ideal solutions that make the business stand out in the automotive industry. The company encourages employees to innovate to support continuous improvement of the business. Through its organizational culture, Tesla partly maintains the human resource capabilities important in its continuing success in the global market for electric automobiles and related products.

Tesla’s organizational culture creates opportunities for innovation essential to the electric car business. The characteristics of this corporate culture encourage Tesla’s employees to generate new ideas and solutions.

Features of Tesla’s Organizational Culture

Tesla Motors, Inc. employs its organizational culture in developing advanced electric vehicles that stand out from the majority of automobiles, which use internal combustion engines. The company’s ability to keep introducing new and profitable electric vehicles reflects the benefits of its corporate culture. Tesla identifies six main features of its organizational culture:

  1. Move Fast
  2. Do the Impossible
  3. Constantly Innovate
  4. Reason from “First Principles”
  5. Think Like Owners
  6. We are ALL IN

Move Fast. Speed affects Tesla’s competitive advantage. This characteristic of the organizational culture highlights the importance of employees’ capability to rapidly respond to trends and changes in the market. In this way, Tesla’s organizational culture facilitates resilience through speedy response to current issues and challenges in the automotive industry.

Do the Impossible. In developing cutting-edge products, Tesla must ensure that its corporate culture encourages employees to think outside the box. This cultural characteristic recognizes the importance of new ideas and solutions, but it also emphasizes the benefits of considering unconventional ways. For example, employees are trained to go beyond conventional limits of productivity and creativity in automotive design. This condition opens new doors for the company to improve its performance.

Constantly Innovate. Innovation is at the heart of Tesla Motors, Inc. This feature of the organizational culture focuses on the continuous nature of innovation at the company. Innovation helps develop cutting-edge electric cars and related products. However, Tesla must innovate continuously to maintain its competitive advantage. The company addresses this need through an organizational culture that rewards constant innovation.

Reason from “First Principles.” CEO Elon Musk promotes reasoning from first principles, which involves identifying root factors to understand and solve problems. Through the company’s corporate culture, employees use first principles in fulfilling their jobs. Tesla also has training programs to orient its human resources to this feature of its organizational culture.

Think Like Owners. Tesla employs its organizational culture as a tool to maintain a mindset supportive of business development. The company wants its workers to think like they own the organization. This ownership mindset supports Tesla’s mission and vision by encouraging employees to take responsibility and accountability in their jobs and in the overall performance of the business.

We are ALL IN. Tesla Motors, Inc.’s organizational culture unifies employees into a team that works to improve the business. This cultural characteristic helps minimize conflicts through teamwork. Such teamwork also develops synergy in the company’s human resources, thereby making the corporate culture effective in maximizing benefits from employees’ talents and skills to bring competitiveness in the automotive market.

Tesla Motors, Inc.’s Organizational Culture Implications, Advantages & Disadvantages

Tesla’s organizational culture supports innovation. An advantage is that it enables the company to develop high-technology products that attract its customers. This advantage aligns with Tesla’s generic competitive strategy. This organizational culture is also advantageous in terms of support for rapid response and problem solving.

A disadvantage of Tesla’s organizational culture is its pressure on employees to constantly innovate. Innovation benefits the company, but puts a strain on human resources. Also, Tesla’s corporate structure imposes limits on the responsiveness of employees, thereby counteracting the effects of the organizational culture in facilitating speedy decisions and actions to address concerns in the automotive business.

References
  • Alvesson, M., & Sveningsson, S. (2015). Changing organizational culture: Cultural change work in progress. Routledge.
  • Huhtala, M., Tolvanen, A., Mauno, S., & Feldt, T. (2015). The associations between ethical organizational culture, burnout, and engagement: A multilevel study. Journal of Business and Psychology30(2), 399-414.
  • Tesla Motors, Inc. Code of Business Conduct and Ethics.
  • Tesla Motors, Inc. Form 10-K.