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. The company encourages employees to innovate to support continuous improvement of the business. For example, through its corporate culture, Tesla maintains the human resource capabilities important in its continuing growth in the global market for electric automobiles, batteries, solar panels, and related products. In this way, the corporation’s cultural traits function as a channel for adding to strategic effectiveness in enhancing the business. Through the organizational culture, Tesla Inc.’s management optimizes employees to achieve creative and innovative behaviors. These behaviors are essential to maintaining the technological innovation that forms part of the company’s foundation.
Tesla’s organizational culture creates opportunities for innovation that keeps the competitiveness of the electric car business. The characteristics of this corporate culture encourage the company’s employees to generate new ideas and solutions. In this company analysis case, such behavioral factors contribute to Tesla Inc.’s competitiveness in facing automobile manufacturing firms like General Motors Company, Toyota Motor Corporation, Honda Motor Company, Nissan Motor Company, Bavarian Motor Works (BMW), Volkswagen, and others.
Tesla’s Organizational Culture Type & Features
Tesla, Inc. has an innovative problem-solving organizational culture. This type of corporate culture motivates employees to develop profitable solutions to current and emerging problems in the target market. For example, the company employs its organizational culture in developing advanced electric vehicles as a solution to environmental issues surrounding automobiles that have internal combustion engines. The company’s ability to keep introducing advanced electric vehicles reflects the benefits of its corporate culture. Tesla Inc. identifies six main features of its organizational culture:
- Move Fast
- Do the Impossible
- Constantly Innovate
- Reason from “First Principles”
- Think Like Owners
- We are ALL IN
Move Fast. Speed affects Tesla Inc.’s competitive advantage. This characteristic of the organizational culture highlights the importance of employees’ capability to rapidly respond to trends and changes in the international market. For example, the corporation’s human resources provide the capability to develop cutting-edge products that match or exceed those from competing automotive firms. In this way, Tesla’s corporate culture facilitates business resilience through speedy responses to current issues and challenges in the global 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, human resource managers train employees to go beyond conventional limits of productivity and creativity in automotive design, leading to the development of new solutions to energy and transportation needs. This condition opens new opportunities for Tesla Inc. to strategically improve its business performance. This cultural condition also makes the company an influential entity in prompting radical ideas in the international automotive and energy solutions market.
Constantly Innovate. Innovation is at the heart of Tesla, Inc. This feature of the organizational culture focuses on the continuous nature of innovation at the company. For example, the corporation continuously researches and develops solutions that improve current energy storage product designs. In this context of the business analysis, constant innovation helps develop cutting-edge electric cars and related products. Continuous innovation maintains the competitive advantage necessary to address the strong force of industry competition determined in the Porter’s Five Forces analysis of Tesla Inc. The company addresses this need through a corporate culture that rewards constant innovation. Managers motivate employees to contribute to constant innovation in business processes and output.
Reason from “First Principles.” CEO Elon Musk promotes reasoning from first principles. These principles revolve around identifying root factors to understand and solve problems in the real world. For example, Tesla Inc.’s energy storage products are one of the solutions to challenges in using renewable energy, and challenges in improving the efficiency of energy utilization. Through the company’s corporate culture, employees use first principles in fulfilling their jobs. Tesla’s human resource management involves training programs to orient employees to this feature of its organizational culture.
Think Like Owners. Tesla employs its organizational culture as a tool to maintain a mindset that supports business development. For example, the company motivates its workers to think like they own the organization. This ownership mindset supports Tesla’s corporate vision and mission statements by encouraging employees to take responsibility and accountability in their jobs and in the overall performance of the multinational business. The ownership mindset is a powerful behavioral factor that helps grow and strengthen the integrity of businesses in various industries. This corporate cultural trait aligns workers with the company’s strategic objectives, thereby improving strategic effectiveness.
We are ALL IN. Tesla, Inc.’s organizational culture unifies employees into a team that works to improve the business. For example, this cultural characteristic helps minimize conflicts through teamwork. Such teamwork also develops synergy in the company’s human resources. As a result, the corporate culture maximizes the benefits from employees’ talents and skills. Synergistic teamwork contributes to Tesla’s competitiveness in the international automotive market. This unifying cultural approach also facilitates corporate management and strategy implementation throughout the organization.
The abovementioned cultural characteristics indicate that Tesla, Inc. focuses on encouraging innovation that leads to useful products for the global market. The company’s progress and growth are based on technological innovation. Tesla Inc.’s organizational culture has remained focused on such innovation since the founding of the business. However, it is expected that the company will gradually change its corporate culture to accommodate new needs as the business expands and diversifies its product offerings.
Tesla, Inc.’s Corporate Culture Implications, Advantages & Disadvantages
Tesla’s organizational culture puts emphasis on innovation. An advantage of this cultural trait is that it enables the corporation to develop high-technology products that attract its customers. For example, Tesla automobiles, combined with the company’s powerful branding, have an increasing share of the automotive market. This advantage aligns with Tesla’s generic competitive strategy and intensive growth strategies. The corporate culture is also advantageous in terms of support for rapid response and problem solving. This cultural trait keeps the company abreast with new technologies while making its products effective and relevant to customers’ needs and preferences.
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. Nonetheless, properly implemented, this cultural characteristic ensures long-term business competitiveness. Also, Tesla’s corporate structure imposes limits on the responsiveness of employees, thereby counteracting some of the effects of the corporate 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.
- Guiso, L., Sapienza, P., & Zingales, L. (2015). The value of corporate culture. Journal of Financial Economics, 117(1), 60-76.
- 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 Psychology, 30(2), 399-414.
- Jiang, F., Kim, K. A., Ma, Y., Nofsinger, J. R., & Shi, B. (2017). Corporate Culture and Investment–Cash Flow Sensitivity. Journal of Business Ethics, 1-15.
- Koren, Y., Gu, X., & Freiheit, T. (2016). The impact of corporate culture on manufacturing system design. CIRP Annals – Manufacturing Technology, 65(1), 413-416.
- Shelby, L. (2018). Becoming the Safest Car Factory in the World. Tesla, Inc.
- Tesla, Inc. – Careers.
- Tesla, Inc. – Form 10-K.
- Tung, R. L. (2016). New perspectives on human resource management in a global context. Journal of World Business, 51(1), 142-152.
- U.S. Department of Commerce – International Trade Administration – The Automotive Industry in the United States.