Tesla Consulting Project

PraiseGod C. Chidi-Umeh

University of Texas at Dallas

OBHR 3310.003 Organizational Behavior – S24

Alex Ning Li, Ph.D.

04/30/2024
 Tesla Consulting Project

Tesla, Inc. is an American multinational eco-friendly automotive company headquartered in

Austin, TX. They were founded in 2003 by engineers Martin Eberhard and Marc Tarpenning and later

joined by Elon Musk, Ian Wright, and JB Straubel. Tesla specializes in electric vehicles, stationary battery

energy storage devices, solar panels, and solar shingles. Their mission is to accelerate the world’s

transition to sustainable energy through increasingly affordable electric vehicles and renewable energy

generation and storage. (“Battery Cell Production Begins at the Gigafactory | Tesla”) In 2004, Elon Musk

became an early investor in Tesla Motors, then later became the CEO in 2008. In that same year he

became CEO, tesla released its first car called the Roadster. It was completely electric and achieved up

to 245 miles (394km) on a single charge. Unfortunately for Tesla, Inc., the Roadster was not as successful

as the team wanted it to be despite it still having some popularity as a luxury item. In 2012, tesla

stopped its production of the Roadster and shifted its gears to making newer and more durable electric

cars. A 2014 Tesla Model S was introduced to the market, as well as the Model X and Model Y, and Tesla

began to grow in popularity and recognition. As of 2022, Tesla’s current revenue is 81.46 billion USD,

and according to U.S. NEWS, that makes Tesla the number one richest car company in America by

market capitalization.

Earlier this year, Tesla released its first pick-up truck on the market called the Cybertruck. It is a

600-hp dual motor model with three electric motors making a combined 834 horsepower. Tesla Inc. is

currently working to launch a single-motor rear-wheel drive cybertruck that can tow up to 11,000

pounds and reach up to 340 miles in 2025.

Tesla’s Performance

According to Forbes, Organizational Behavior (OB) can be defined as the study of how

individuals and groups interact within an organization and how these interactions affect an
organization’s performance toward its goals. It can also be defined as an applied behavioral science that

is built on contributions from a number of behavioral disciplines. (Robbins et. All, 2017) Tesla’s

organizational structure covers all business activities, including finance, sales, marketing, technology,

engineering, design, and the offices of the CEO, and chairperson. (“What Is Tesla’s Organizational

Structure? Tesla ... - FourWeekMBA”) They produce a little over 490,000 vehicles and just in the last

quarter of 2023, they delivered 484,000 vehicles. The Model Y is currently the best-selling car in the

world.

Since December of 2023, Tesla has sold 3,878 Cybertrucks, and just last week, Elon Musk

recalled each one built so far due to multiple defects. As of January 2024, he revealed that Tesla has

over 2 million people on a waitlist for new and improved cybertrucks. While developing the Cybertruck,

tesla faced and continues to face various limitations, so today we will discuss production aspects in the

company that require improvements.

Quality Metrics

In the past year, consumers reported that the Model X is one of the least reliable Teslas that

have been made. After surfing multiple car shopping websites and consumer reviews, I have gathered

that the most unreliable EVs are the Tesla Model 3 versions.

The Model 3 is an electric vehicle designed as a compact car with a sports car-like appearance. It

is among the cheapest teslas on the market and about 200,000 of them are sold each year according to

goodcarbadcar.net. Car experts suggest avoiding the 2017, 2018, and 2019 versions of the Model 3

because of various software glitches, premature braking, trouble with temperature range, quality

troubles, unreliability, and questionable durability. Shortly after the 2018 version of the Model was put

on the market, 12 recalls of that version alone had already been made. In 2020, Tesla ranked the lowest

on J.D Power 2020 quality study with the initial score of 250 PP100 which means that for every 100
vehicles you will find 250 problems with the vehicles. With a ratio of 25 to 1, anyone can see off the bat

that there is not high quality with some of Tesla’s vehicles.

Although these models are deemed valuable luxury items, it does not feel like the best option

for consumer safety and financial security. Reliability is a great factor to consider when choosing a

vehicle to invest in. If the car is not dependable, it is difficult to justify wanting to make that purchase.

Leadership and Management

The CEO of Tesla, Elon Musk is known for his unique and dynamic style of leading. He is a

visionary, and a massive risk-taker and loves to think creatively. Aside from Tesla Motors, he is also a

founder of SpaceX and PayPal, and recently acquired Twitter. Although we can agree that Musk is very

passion-driven, it is clear that he makes most of his public decisions based on predictions and not on

facts and data. Recently he has been handling a lot of issues like shifting towards solar energy

production, outdoing competitors like Meta and Apple Inc., and how to acquire artificial intelligence.

Instead of involving himself in secondary issues, he needs to pay more attention to Tesla. Tesla is a

multimillion-dollar automotive vehicle company that is in huge demand in the marketplace, yet they are

unable to fulfill their orders by the due date. Tesla has been struggling to meet their customer’s demand

and they have been having profoundly serious production line quality problems. Elon Musk as a leader

chose to fire 10% of his staff as a way to resolve this issue. Musk has made various bold promises to

scale up production to 500,000 cars a year. It is very possible that he underestimated the duration of

mass production of the vehicles, but as a good leader, you should have an idea of how quickly and

effectively your production team is working to avoid making unreliable statements and promises.

It seems like another issue Elon Musk struggles with is his ego. With Musk, after reviewing his

management tactics, I think the way his ego affects his success is a special case. Many employees
describe Elon as a charismatic leader who listens to his team and their ideas, but is he really a capable

leader if he makes decisions based on what he wants, and not what the company needs?

Many rumors have surfaced about Elon Musk’s obsessive attitude and how he is not the best

person to get along with. Many former Tesla employees have mentioned that Musk disregards

employees who choose not to work up to 14 hours. He expects his team to complete 60+ hours a week,

which is very unrealistic for most who have families and do not have a workaholic personality like he

does. Former employees have also mentioned that Elon never offers to pay his employees more for

working long hours because he thinks that it is not something that you should get to choose to do. It

seems when his ego is not filled by the people working for him, he fires them or threatens termination. I

think this is a clear tactic to instill the fear of losing your job in the minds of his employees. Elon Musk

has become a public figure over the years, and despite him carrying so much success and wealth, I

believe that he could be even wealthier and more successful if he stopped letting his ego limit him.

Room for Improvements

Leadership can be defined as the ability to influence a group toward the achievement of a vision

or set of goals. (Robbins et. All, 2017) “Organizations need strong leadership and strong management

for optimal effectiveness.”

Despite being a successful company currently, Tesla will never reach its full capability and

potential without strong leadership. Elon Musk is a humble man, but indeed a poor leader who makes

biased decisions. Instead of concerning himself with building new things, he needs to focus on making

improvements within his current assets.

As previously mentioned, Tesla is inefficient when it comes down to fulfilling customer demand

or meeting due dates. (see Quality Metrics) This is because of poor organizational functionality and

unbelievably bad execution. Musk might have overlooked the fact that Tesla relies on many different
suppliers to provide them with parts and electronic gadgets, so when the production team is unable to

work with these parts, it causes a delay in the delivery process, which causes unhappy customers. A way

I suggest this can be fixed is by reducing the number of parts that are being supplied and considering

making some of the parts in-house. By considering this, tesla is saving more money on parts and saving

transportation time which essentially cuts down the time on production and delivery. I believe that Elon

Musk tends to make bold statements on the internet because he does not set strict deadlines for his

Tesla employees. Following back to previous rumors about him expecting every one of his employees to

check in 60+ hours every week, he must be under the assumption that if everyone is working extra hours

frequently then progress will be made rapidly. If this is the case, then Musk should consider integrating

robots or AI into the manufacturing process. Reducing the tasks done manually can help Tesla better

their construction process and inventory process.

Lastly, to improve the leadership skills of Elon Musk, he must choose to abandon his obsessive

and workaholic personality and accommodate the personality of a strong leader. The Big Five

personality model is a good rule of thumb to follow for Elon. His personality type is INTJ, and it is clear

that that influences his style of leading and also most of his decisions. A strong leader needs to be

somewhat extroverted. Extroverts tend to be very sociable, agreeable, and assertive because they work

well with others and are particularly good at getting along with other people. A strong leader also needs

to be dependable and organized, in other words, a personality trait a strong leader should have is

conscientiousness. A big way that Musk can further grow Tesla is by shifting his priorities back to the

wellness and improvements of the company. Acquiring the Big Five personality traits, Extroversion,

Openness, Agreeableness, Emotional stability, and Conscientiousness will help Elon help Tesla improve

their performance and bring him greater satisfaction. Applying concepts like improving ethical behavior

and creating a positive work environment will increase the productivity of his employees and help him
regain their loyalty and trust. This way employees do not feel the need to cut corners or work long hours

to prove themselves worthy.

In conclusion, constructs like adapting to change, becoming diverse, and improving customer

services are especially important in OB because they can help the company be better. It creates more

opportunities and causes a rapid change in the workforce. By improving people skills and working to

become a stronger leader and better manager, you can create unlimited networks and connections for

yourself.
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Robbins, S. P. et. all (2017.). chapter 4. essay.

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Business Wire. (2024, January 2). "Tesla Vehicle Production & deliveries and date for Financial
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