An Analysis of Elon Musk’s Leadership Style and Its Impact on Tesla

An Analysis of Elon Musk’s Leadership Style and Its Impact on Tesla

Synopsis

Elon Musk, the co-founder of Tesla, the leading electric automaker, is now the richest man.  Thus, Musk is regarded as one of the most successful entrepreneurs in history for having built a company within a few decades, becoming one of the successful companies providing solutions to the global problem of environmental degradation. Tesla is the leading electric vehicle maker. The brain behind the idea of manufacturing electric vehicles that would help solve environmental pollution is Elon Musk. Musk invested $6.2 million in Tesla Motors in 2004; 16 years later, the company has grown and built a strong brand in the auto-making industry. The success of Tesla Motors is attributed to Musk’s leadership style (Spicer, 2018).  While some critics argue that Musk’s leadership and interpersonal relationships are wanting, he has managed to establish a company that is posing one of the global issues despite his negatives. Besides, the company has made him the richest man in the world.

Elon Musk displays different characters, and people who have worked with him closely have different accounts of this man. Many observers have agreed that Musk has a keen ability to express ideas, and his expressions of ideas make people get excited about the ideas (Monica, 2018). This ability has enabled him to garner praise for his visionary and inspiring leadership. Former Tesla general counsel Todd Maron described Musk as an individual who can empower people better than they think they can be. He says that Musk has extraordinarily high standards that help him push things to achieve perfection (Spicer, 2018). Musk has a critical perception of every aspect and always wants tasks done accurately and to the best of their details. In other words, Musk is a perfectionist who will follow up with simple details to ensure that they have been adhered to.

Another of Musk’s characteristics is that he is a man who does not believe in impossibility; he always wants to find ways of getting there rather than saying that it is impossible. Due to this character, Musk has pushed various company goals that seemed impossible to accomplish, but later on, the company achieved the set goals (Caren, 2020).  He sets high-level goals and devises ways of reaching the goals. He is a hands-on, experienced manager who will always want the employees to do things that he thinks are right.

Musk has been accused of micro-management in that he follows up with the employees on every activity they do. When an employee does what he does not expect, he directly confronts them and sometimes orders them to redo the work or even fire the employees (Spicer, 2018).  In other words, he is a perfectionist person who wants every detail to be done according to what he thinks is right. Musk was also accused of a lack of delegation. When in the company, he goes on doing work that belongs to his juniors.

Another musk is a man who does not like criticism; he has misused his social media, such as Twitter, to react to people who have attempted to criticize his actions. Some of his tweets have landed him in a problem. For example, he was sued for defamation and paid a colossal amount (Monica, 2018). Due to his over-ambitious nature, Musk set a high target, which caused the company’s stock prices to increase by 11% since investors were ready to invest in the company because of its net worth. SEC found him guilty, and he was again fined $40 million for fraud security. Musk has caused several problems for the company.

Problem Analyses

Problem 1: Stock price dipping

Elon Musk, as discussed, has some antisocial characteristics that paint him in a bad light as a leader. His character does not reflect his stature as a leader. Experts and scholars have warned that Musk’s aggressive, antisocial attitude and excessive pride could bring the company down. Due to the many scandals and the fine by the SEC, the company’s stock prices went on a downward spiral (Caren, 2020). Investors were losing confidence in a company that had promising statistics. Up to date, some investors have reservations about investing in the company because they know that the company will soon go down because of bad leadership.

Cause

The main cause of the fall on the stock of Tesla is the poor leadership character of Musk. His over-ambitiousness leads him to make decisions that contravene the laws that govern business (Lauer, 2021).  When a company contravenes the laws, it is fined, and this sends a negative message to the investors who become reluctant to invest in it.

Problem Recommendation

In addressing Tesla’s dropping stock price, Musk should establish a communication team to control what he posts on social media. Musk n does not like criticisms since he overreacts when he is criticized. Therefore the communication team will help to curb the problem.

Problem 2: High staff turnover

Musk’s perfectionist character and over-ambitiousness cause him to clash with some senior company officials, and this causes them to resign. The pressures to perform by Musk on the staff make some of them quit. For example, his recent suggestion that he wanted the production lines for Model X vehicles to be wholly automated was over-ambitious and unrealistic (Lauer, 2021). This suggestion made him clash with some engineers who believed that this plan could not be achieved, and they quit the company. Moreover, Musk prefers employees to work for longer hours to achieve his unrealistic goals. The workplace pressure makes the junior employees quit and look for greener pastures.

Cause

The cause of high staff turnover, as mentioned, is Musk’s unrealistic goals. Musk pressures the employees to perform, and if they do not do as he desires, he fires them. At Tesla, employees, especially the technical team, have less personal time (Spicer, 2018). They spend a lot of time at their workplace and are denied time for their families and other personal errands.

Recommendation

To sort out the issue of high employee turnover, the management needs to have an open discussion of all the staff and address some of the issues they are facing. In other words, the management should focus on making the workplace environment safe and less demanding to the employees. They ensure that employees are comfortable at their workplace.

Problem 3: Tesla’s poor relationship with regulators

Musk’s leadership behaviors have made Tesla have bad relationships with regulators, such as the Securities Exchange Commission. After being fined for security fraud, Musk said that he did not recognize the regulators. This sentiment put the company in bad blood with the regulators in that the regulators have a keen interest in monitoring its actions. Any simple mistake could again cost the company. Overworking employees is against employer-employee laws; hence, the company is in a bad relationship with bodies that protect employees.

Cause

The main cause of bad relationships between Tesla and regulators. Musk’s arrogance and pride that lead him in making wrong decisions that contravene the law. Musk take advantage of his financial success to push other employees to overwork so that he could achieve more (Lauer, 2021). He seems to neither have empathy nor kindness; what matters to him is to achieve his goals.

Recommendation

In addressing the issue of Tesla’s relationship with the regulators, the company should start adhering to the laws and avoid making decisions that violate the laws. For example, the company should not overwork its employees but let employees work the normal hours per week. The company should be following the right procedures for termination. It should not fire employees unfairly.

References

Caren, D. (2020). Elon Musk’s behavior for Tesla: a blessing or a curse? Retrieved from https://dial.uclouvain.be/memoire/ucl/en/object/thesis%3A24532

Lauer, A. (2021). Elon Musk Has Had Many Scandals, He has Never Faced Any Real Consequences. Retrieved from https://www.insidehook.com/daily_brief/tech/elon-musk-scandals-consequences

Monica, P. (2018). Analysis: Elon Musk is hurting Tesla with his bizarre behavior.  Retrieved from https://money.cnn.com/2018/09/08/news/companies/elon-musk-tesla-analysis/index.html

Spicer, A. (2018). Elon Musk’s ‘behavior’ is impacting Tesla. Retrieved from https://www.cass.city.ac.uk/news-and-events/news/2018/september/how-elon-musks-behaviour-is-impacting-tesla

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Overview:
Organizational Behavior Problem Analysis Guidelines

Every day, we learn of new organizational problems such as low productivity compared to competitors, difficulty in managing growth or some major organizational change, power struggles among individuals, teams, or divisions, and maladaptive organizational cultures. These current organizational problems allow us to explore, test, and refine our understanding of organizational theory. The aim of the group project is two-fold: 1) the project allows you to directly experience many of the individual behaviours and interpersonal processes involved in working with others to achieve particular goals 2) the project allows you to demonstrate your mastery of the organizational concepts we have learned, showcase the analytical skills you have developed in the course, and draw upon the lessons learned from our case discussions.

Suggestions for getting started:
Identify an organization or part of an organization that you wish to study. It is fine to select one of the organizations in which one of your team members has worked or currently works. In selecting your organization, you may wish to establish a contact person in that organization.
• Familiarize yourself with the organization by reviewing the company website and annual reports. Hoovers.com (accessible through the UCR Electronic Resources) is an excellent resource for obtaining basic background information on your organization (e.g., organizational size and industry competitors). If you have a contact person, he/she may also be able to provide you with materials such as organizational charts.
• Select an organizational problem. Any topic related to our course materials is fair game. You may find it helpful to peruse newspapers (e.g. Wall Street Journal) and business periodicals (e.g. Business Week, Fortune, Forbes) and identify common organizational problems. Again, if you have a contact person, he/she may also have specific issues he/she would like you to assess.

Assignment Structure:
Part I: Overview of the organizational problem (suggested length = 1 page)
• Brief description of the organization. In no more than a paragraph, describe the business of the organization and other key background information (e.g., players involved, structure).
• Description of the problem. The problem should be presented so that someone unfamiliar with the event can understand the key issues at hand. This discussion of the background of the problem should lead you to a guiding question that you would like to address in the paper and the concepts you will use to assess this problem.
Part II: Assess the problem you have selected using one (or more) of the concepts or theories we covered in class (suggested length = 3-4 pages long)
• Typically, the strongest papers focus on 2-3 concepts that are discussed in depth.
• Briefly review the concept or theory and explain how it is operating in this particular situation. Assume that you are explaining the concept to another individual who has no knowledge of organizational behaviour theories. Additionally, provide clear and specific examples from the situation to support your analysis.
• To guide your analysis, it may be helpful to consider: Why is the problem occurring? What factors are involved? Who is paying attention to the problem, and how is it currently being handled?
Part III: Drawing on course concepts, give your assessment of and recommendations for the organizational problem (suggested length = 3-4 pages long)
• In giving your assessment, it may be helpful to consider: What are the strengths and weaknesses of current attempts to handle the problem? What should be done to resolve the issue more effectively? Why will your plan or recommendations work? What evidence from our course to support your recommendations?
Part IV: Implementation of recommendations (suggested length = 1-2 pages long)
• Drawing on course materials, how would you implement your action plan? What are the limitations of your recommendations? What unintended consequences might arise, and what might you do in anticipation of these problems?
Please be sure to cover each of these four parts explicitly.

A synopsis is a brief overview of the case. Please prepare your synopsis as if I (and your classmates) do not have the whole case study. Your synopsis should be concise, complete, and fully describe the situation “as you see it.” The synopsis should not exceed four to five paragraphs.

At the end of your synopsis, you must identify three Organizational Behavior problems that must be addressed.

Problem Analyses

You must analyze each of the three identified problems, drawing from the content covered in class. These analyses should identify the causes of each problem.

Each of the three Problem Analyses should be no more than three to four sentences in length. Be succinct.

Problem Recommendations

For each problem, you must provide a solution. Recommendations must directly tie to the Organizational Behavior problem you identify. Support your solution with critical thinking that demonstrates an understanding of the course material, internet resources provided for this course, and real-life experiences.

Shy away from general statements and blanket conceptual recommendations that are not fully justified by the facts of the case.

Formatting and References

In addition to references in the textbook, you must include at least three quality outside references (properly vetted news sources, business publications, scholarly articles, etc.) to support the information you outline in your case study. You may “re-use” outside sources you found for your discussions as long as they truly support your response to the case study.

Clearly label and indicate each Problem Analysis with headings in your paper followed by your Problem Recommendation. Ultimately, the structure of the assignment should follow the 3-Step Problem-solving Approach:

Synopsis

Problem #1
Cause of Problem #1
Recommendation #1

Problem #2
Cause of Problem #2
Recommendation #2

Problem #3
Cause of Problem #3
Recommendation #3