Tesla, Inc. (formerly Tesla Motors, Inc.) has a corporate social responsibility (CSR) strategy that addresses the major interests of the stakeholders of the automotive and energy solutions business. In Archie B. Carroll’s model, stakeholders and businesses affect each other. This relationship emphasizes the importance of corporate social responsibility, corporate citizenship, and stakeholder management. In this company analysis case, Tesla’s automotive business directly and indirectly affects concerned stakeholders. For example, the company affects stakeholders through the nature and design of its electric vehicles, batteries, and solar panels, all of which address ecological concerns. It is essential for the company to maintain an adequate corporate social responsibility strategy to minimize negative impact and optimize benefits to stakeholders, while supporting the competitive advantages demonstrated in the SWOT analysis of Tesla, Inc. With a strong international brand, 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 and contribute to the global community.
Tesla, Inc. addresses stakeholders’ interests through a corporate social responsibility strategy that focuses on the 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 General Motors, Toyota, Ford, Honda, Volkswagen, Nissan, and BMW. Corporate citizenship activities are strongly integrated into Tesla’s products and management practices. Such a corporate social responsibility approach benefits 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 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. In this regard, corporate citizenship is essential to the automotive and energy business. This condition facilitates the company’s achievement of its corporate social responsibilities. The following are Tesla’s stakeholders, arranged according to the company’s CSR prioritization:
- Communities (highest priority)
- Customers
- Employees
- Investors/Shareholders
- Governments
Communities. Tesla’s automotive business directly satisfies the concerns of communities. 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 the conservation and protection of the natural environment. In this business analysis case, the company’s electric automobiles, batteries, and solar panels address such an interest. Communities are satisfied with the environmental friendliness of these products. Tesla’s corporate citizenship strategy also satisfies this stakeholder group’s interest in benefiting from advanced technologies. For example, under Elon Musk’s leadership, the company is involved in the open-source movement for patents in the automotive and energy industries. This corporate social responsibility strategy benefits communities through development projects that involve green technologies. These initiatives emphasize sustainable energy solutions, which are at the core of Tesla’s mission statement and vision statement. In satisfying such community interests, the CSR approach helps promote the company’s public relations, which is also a component of Tesla’s marketing mix or 4P.
Customers. Customers affect Tesla’s revenues and are interested in product quality and reasonable pricing. The company gives high priority to these stakeholders in its corporate social responsibility programs. To address such interests, the automotive firm seeks new ways of minimizing costs. For example, instead of buying battery cells, Tesla manufactures its own batteries to make its electric automobiles more affordable. Also, the company is expanding its network of charging stations to improve accessibility for customers. This CSR approach improves customer experience and satisfaction. These corporate social responsibility efforts ensure that Tesla, Inc. satisfies the interests of customers as a stakeholder group.
Employees. In designing its corporate social responsibility strategy, Tesla believes that employees are a critical success factor in its automotive and energy solutions business. As stakeholders, employees influence business productivity and performance. Their CSR interests include high compensation and significant career opportunities. Tesla’s corporate responsibility approach satisfies these interests through a competitive compensation strategy, as well as HR programs for skills development and leadership development. Moreover, the company’s corporate social responsibility strategy offers learning experiences through collaborative programs with partner firms. These CSR programs satisfy the interests of employees as stakeholders. Furthermore, Tesla’s organizational culture (work culture) helps improve employee morale and minimize issues in the workforce.
Investors/Shareholders. These stakeholders influence Tesla’s capitalization. Investors and shareholders have interests in the profitability and growth of the business. Tesla’s governance and corporate social responsibility approach address these interests through long-term strategies that aim to transform the automotive/transportation and energy market. For example, the company’s support for open-source technology patents is expected to increase market demand for electric vehicles and related products. This increase in demand is expected to create business growth opportunities for Tesla. The sustainability and environmental friendliness ideals in the company’s corporate citizenship approach are also in line with current sociocultural trends. As a result, these corporate social responsibility ideals support business growth. Tesla’s generic competitive strategy and intensive growth strategies aim to maximize profit and contribute to fulfilling this corporate responsibility. Considering its improving profitability, the company has a governance approach and a corporate social responsibility strategy that continue to improve in satisfying the interests of investors/shareholders as stakeholders of the multinational automotive and energy business.
Governments. Tesla, 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 satisfies these interests through its corporate social responsibility strategy. Also, governments impose requirements that influence operational tactics. Tesla’s operations management approach is implemented in line with these concerns. For example, the company’s supply chain management for its automobile production complies with government regulations on material sourcing.
Tesla’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, Inc. can implement new 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 focus on enhancing Tesla’s corporate social responsibility and governance standing.
Business expansion adds to the fulfillment of Tesla’s corporate social responsibilities. The company adjusts its strategies to fulfill and maintain corporate citizenship goals. For example, strategies are developed according to current and emerging industry changes, such as the trends shown in the PESTLE/PESTEL analysis of Tesla, Inc. The company manages these changes through programs and initiatives for sustainable operations and products, green technologies, and other ecological approaches.
References
- Lenort, R., Wicher, P., & Zapletal, F. (2023). On influencing factors for sustainable development goal prioritisation in the automotive industry. Journal of Cleaner Production, 387, 135718.
- Park, J. G., Park, K., Noh, H., & Kim, Y. G. (2023). Characterization of CSR, ESG, and corporate citizenship through a text mining-based review of literature. Sustainability, 15(5), 3892.
- Tesla, Inc. – Additional Resources.
- Tesla, Inc. – Code of Business Ethics.
- Tesla, Inc. – Environmental Impact.
- Tesla, Inc. – Form 10-K.
- U.S. Department of Commerce – International Trade Administration – Automotive Industry.