Question

Tesla, Inc. is an American automotive company that specializes in electric car manufacturing. The company and Elon Musk, it’s current CEO, has been an innovator in the United States automobile industry. Tesla has used technology as one of it’s driving factors. They provide online software updates and have open source technology, to an extent. Tesla’s production efficiency and sales have increased the last few years. During 2018 & 2019, they were able to achieve some quarters profitability.

Despite of these improvements, the company has had to deal with a number of challenges. Among them:

-   Elon Musk is a dynamic leader; however, he is also unpredictable. For example, in 2018 Musk reported that the company may be going private. The statements were deemed to be misleading for a publicly traded company. Musk and the company were fined a total of $40 million dollars and Musk was not allowed to serve as Director of the Tesla Board for at least three years.
-   Although production has improved, it is still has not met expectations. The company has had many issues which include, assembly line issues, battery integration, and delivery logistics. During this time, Musk has made statements regarding production which has over promised to the market.
-   Tesla had achieved quarterly profitability for some quarters during 2018 and 2019. They had losses for years. Obviously, this is a problem but not unusual for a manufacturing company that takes a number of years to develop a market. The issue is that with accumulating debt, the unpredictability of production and costs have caused major concerns in the investor market place.

Operating a company the size of Tesla is a major task. It takes many teams, with numbers of functions. Address the following questions as advice for the Tesla Board of Directors

1.   The leader of the company, Elon Musk, has created issues on his own for the company. What structure could be put in place to minimize negative impacts?
2.   Chapter 4 of the Group Dynamics for Teams text addresses group cohesion and team roles. What concepts could be utilized to improve the Board’s results?
3.   Tesla was founded in 2003. What factors would you consider to be critical when forming the initial board?

Answer 1

1. To minimize negative impacts in an organization, it is important to have a functional organizational structure. The functional organizational structure has more line of communication and during negative scenarios, the directors of the company can communicate with their subordinates in an effective manner.

2. To improve the board results it is important to have group norms, group processes and the group cohesiveness. All these will allow the board results to be easily obeyed and effectively executed. The group processes will promote the decision-making processes, enhance communication and remove conflicting interactions.

3. The factors that could be considered to be critical when forming the initial board include addressing the conflicts that used to seldom arise in the initial board. Furthermore, the members would have formed a small group in themselves and this could have created issues with cohesive decision making and the consensus was not reached easily.

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