Tesla Motors, Inc. Corporate Social Responsibility, Stakeholders

Tesla Motors, Inc. corporate social responsibility, CSR, stakeholders, interests, strategy, programs, automotive case study and analysis
A Tesla Model S at the SpaceX facility in Hawthorne, CA, 2009. Tesla Motors, Inc.’s corporate social responsibility (CSR) strategy satisfies most stakeholders’ interests in the automotive business. (Photo: Public Domain)

Tesla Motors, Inc.’s corporate social responsibility strategy (CSR) addresses some of the major interests of stakeholders. In Archie Carroll’s model, stakeholders and businesses affect each other, thereby emphasizing the importance of corporate social responsibility and corporate citizenship. Tesla’s automotive business directly and indirectly affects stakeholders. As such, it is essential for the company to maintain an adequate corporate social responsibility strategy to ensure minimal negative impact on and optimal benefit to stakeholders. With a strong brand as a manufacturer of electric vehicles, Tesla has significant opportunities to show the world what a major global firm’s corporate social responsibility efforts can do to satisfy the interests of stakeholders.

Tesla Motors, Inc. addresses stakeholders’ interests through a corporate social responsibility (CSR) strategy that focuses on sustainability and environmental friendliness of automotive products. Such corporate responsibility efforts benefit stakeholders, while also boosting the company’s corporate and brand image.

Tesla’s Stakeholder Groups & CSR Initiatives

Tesla has a corporate social responsibility strategy that relies on the nature of the business. 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:

  1. Communities (highest priority)
  2. Customers
  3. Employees
  4. Investors/Shareholders
  5. Governments

Communities. Tesla Motors, Inc. is an automotive business that directly satisfies the concerns of communities as significant stakeholders that determine brand image. One of the interests of this stakeholder group is to ensure that the natural environment is conserved or protected. Tesla’s electric automobile products address such interest. For example, communities are satisfied with the fact that these products are environmentally friendly because of zero emissions. Tesla also satisfies communities in terms of this stakeholder group’s interest in benefiting from advanced technologies. For example, in 2014, CEO Elon Musk announced that the company would allow other individuals and organizations to use its patents. This corporate social responsibility strategy directly benefits communities interested in using or developing technologies, emphasizing Tesla’s mission and vision statements.

Customers. Customers affect Tesla’s revenues, and are interested in product quality and reasonable pricing. Given such significant impact, the company gives high priority to these stakeholders in its corporate social responsibility programs. To address such interests, the firm continues to seek new ways of minimizing battery costs. For example, instead of continuing to buy batteries from Panasonic, Tesla plans to manufacture its own batteries to make its electric automobiles more affordable. Also, Tesla continues to expand its network of charging stations. This approach improves customer experience and convenience. These corporate social responsibility efforts ensure that Tesla satisfies the interests of customers as a stakeholder group.

Employees. In designing its corporate social responsibility strategy, Tesla Motors, Inc. believes that employees are a critical success factor in its automotive business. As stakeholders, employees influence business productivity and performance. Their interests include high compensation and significant career opportunities. Tesla satisfies these interests through a competitive compensation strategy, as well as HR programs designed to enhance skills development and leadership development. Moreover, the company’s corporate social responsibility strategy offers learning experiences through collaborative programs with partner firms, thereby satisfying the interests of employees as stakeholders.

Investors/Shareholders. Tesla’s early years depended on a series of funding from investors. These stakeholders are important in influencing the capitalization of the company. Investors and shareholders have interests in the profitability and growth of the business. Tesla’s corporate social responsibility strategy addresses these interests through long-term strategies that aim to transform the automotive 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, thereby creating growth opportunities for Tesla automobile sales. The sustainability and environmental friendliness ideals of the company are also in line with current sociocultural trends, thereby supporting business growth. Considering its profitability in recent years, Tesla’s corporate social responsibility strategy satisfies the interests of investors/shareholders as stakeholders of the business.

Governments. Tesla Motors, Inc. experiences the effects of governmental action. Governments are stakeholders that present requirements, limits and opportunities to businesses. This stakeholder group’s interests include legal compliance, as well as business contribution to economic growth. With plans for strategic global expansion and an excellent sustainability record, Tesla’s corporate social responsibility strategy satisfies these interests.

Tesla Motors, Inc.’s CSR Performance in Addressing Stakeholders’ Interests

Tesla’s corporate social responsibility efforts are satisfactory in addressing the interests of most of its stakeholders. However, the company can improve its CSR programs to improve its performance in supporting communities and investors/shareholders. For example, to improve CSR effectiveness in satisfying communities, Tesla can implement community development programs. Also, the company must increase its efforts in international expansion to address the interests of shareholders/investors in benefiting from the automotive business. These recommendations are expected to enhance Tesla’s corporate social responsibility standing.

References
  • Ditlev-Simonsen, C. D., & Wenstop, F. (2013). How stakeholders view stakeholders as CSR motivators. Social Responsibility Journal9(1), 137-147.
  • Peloza, J., & Shang, J. (2011). How can corporate social responsibility activities create value for stakeholders? A systematic review. Journal of the academy of Marketing Science39(1), 117-135.
  • Tesla Motors, Inc. Form 10-K.
  • Werther Jr., W. B., & Chandler, D. (2010). Strategic corporate social responsibility: Stakeholders in a global environment. Sage Publications.