Power and Control in Tesla: An Analysis

Theoretical Perspective

Organizations are mainly purposeful associations of individuals. The organization analysis includes the behaviours and traits of employees and how they structure their working relationships as well as how they interact with external forces. The major variable for analysis is power, control, politics, organisation structure, change, and development (Abernethy & Vagnoni, 2004).  This essay focuses on one contemporary theme that is power and control and all the theoretical perspectives are discussed in the below section in connection with Tesla. Tesla is a well-known brand in the electric vehicle segment in the automobile industry at the global level. Tesla was founded in 2003 by a group of people and headquartered in California and at present, Elon Musk is the CEO of the company.  The company has opened Gigafactory and acquired a solar city to cater to commercial and household demands for energy products that incorporate storage, solar, and grid services (Eberhard & Tarpenning, 2016). This company is selected because Tesla is doing a transformation in society by switching to renewable sources of energy and by making people aware of the use of electric vehicles and reducing pollution and environment issues such as global warming (Gibbs, 2017). Moreover, the CEO of the company Elon Musk is well known for power and control in the organization and handling this on his own. The below section uses different power and control concepts in relation to Tesla.

Theoretical Perspective

In order to complete this section, a contemporary perspective is selected. Contemporary perspectives focus on how behaviour is modified and acquired by environmental consequences such as punishments and rewards.  Here, the focus is on power and control which means how these are acquired and modified in Tesla. Tesla is well known for the power and control used and acquired by CEO Elon Musk. As his leadership style and his influential behaviour have been contributing to the success of the company (Eberhard & Tarpenning, 2016). In order to understand the role of power and control in an organization and how these can be used Tesla is a better organization.  The organization structure of Tesla is such that it supports growth and innovation. In this organization analysis case of Tesla, the organizational structure takes a traditional form including the company’s managerial control and focus along with limited operation expansion across the globe (Ahmad & Khan, 2019).  In the case of Tesla, as a manufacturer of electric automobiles, solar panels, batteries and energy and transportation solutions. Tesla uses its structure to facilitate extensive control of the organization. The leadership effectiveness of Elon Musk depends on the ability of organization structure to support and disseminate the implementation of new strategies for business improvement and growth (Rimmer, 2018). The organization improves its ability to implement new strategies and manage its operational activities and objectives through its organization structure (Eberhard & Tarpenning, 2016).

Literature Review

There are many articles on how Musk took control over Tesla’s activities and this impacted the board of directors’ decision making ability. Musk held shares that could be equivalent to the majority of voting control because he had the ability to influence others and through that, he got the majority of control and stake (Teece, 2018). But this was not enough to make him controller so Musk used power to oust senior management and replaced the former CEO of the company. Musk exercised control over the company board as the visionary, chairman of the board, and CEO (Maamoun, 2021). When the transaction took place the board was aware of the singularly important role played by Musk in sustaining Tesla in hard times and providing the vision to the company. He was completely involved in the board discussions regarding the acquisitions.  Moreover, the control was not limited to business transactions; Musk had strong business and personal connections with others that make him again an important person for the company (Teece, 2018). Due to such reasons and the influence of Elon Musk in the operations of Tesla this organization is selected.  Power and control are the most used aspect in the company. Tesla and Musk are connected and people even acknowledge the influence of Musk over the company in public noting that he contributed actively and significantly to the company by taking necessary decisions, implementing changes as per the external forces and hiring the talented pool that can contribute to product design and engineering (Eberhard & Tarpenning, 2016). . Tesla manufacturer of electric automobiles, solar panels, batteries and energy and transportation solutions. Tesla uses its structure to facilitate extensive control of the organization. The leadership effectiveness of Elon Musk depends on the ability of organization structure to support and disseminate the implementation of new strategies for business improvement and growth. Furthermore, Tesla become successful because of the power and control imposed by Musk. Fisher & McCabe (2019) stated that the loss of Musk’s services even can impact on survival of Tesla and impact negatively the business operations.  Thus, the below sections all revolve around power and control in Tesla and how Musk acquired and modified power in order to make the company successful at the global level.

Literature Review

According to Abernethy & Vagnoni (2004) power is considered as the ability to make things happen according to an individual perspective by influencing someone else to do it for you.  It is important for organizations where the managers assign tasks to different employees and make them do those tasks. Power gives a sense of direction towards attaining organizational goals (Vallas & Hill, 2012). Whereas, control in an organization includes the procedures and processes that guide, protect and regulate the operations and activities in the company (King & Lawley, 2016).  This is amongst the core functions of the management.  

Power can be sustained and acquired through different sources. Even there are different types of power exercised by an individual. There are five types of power such as reward power, legitimate power, expert power, referent power and coercive power.  The legitimate power is all about the formal power that people receive when an individual occupies a certain position in the organization (Vallas & Hill, 2012). Depending on the position it gives an individual authority within the company. Power and control in an organization in a contemporary context can be better understood by focusing on the employment relations area (King & Lawley, 2016).  This includes employee communication, employee involvement, employment rights and employee discipline. Employee communication is defined as information sharing across the organization at different levels between employees (Courpasson, Golsorkhi, & Sallaz, 2012). When in any organization power is in the hand of employees then they can perform best and able to communicate their ideas openly. Effective communication leads to various benefits such as increased employee engagement, maintaining workplace harmony (Vallas & Hill, 2012). Helps manage a diverse workforce and improves experience and innovation.

Employment involvement is the key to understanding the power in an organization. When more power is handed to employees they make decisions and stay engaged in organization activities (Vallas & Hill, 2012). The depth of involvement shows the power given to employees. Such information, communication, consultation, co-determination, and control define the scope of power (Asimakou, 2009). When the scope of power is wide in an organization that includes the involvement of employees in decision making to a greater extent and workers remain cooperatives (King & Lawley, 2016).  When the scope is narrow, management explains decisions or changes already made. On the other side, employee rights show how employees are treated in an organization and are focused on their work. Feelings of inequality can lead to toxic relations and withdrawal of power from the side of employees and this impacts the overall performance of employees (Wilson, 2018). The fourth element of the model based on control and power is employee discipline (Wilson, 2018). This includes power and control in working effectively employees are encouraged to cooperate to meet the objectives of an organization. There are no such cases in which employee behaviour need to be controlled as an employee are well aware of what their responsibilities are and how they need to perform and behave in an organization (King & Lawley, 2016). Power exercise in an organization leads to making things happen. Power is considered a necessary ingredient in all organizational processes.  Power influences the decisions of others in an organization that impacts the overall performance of the company.  Whereas, control in an organization exists where a number of people are working together to attain organization goals (Abernethy & Vagnoni, 2014). Control also happens at all levels and in all areas and is affected through structural design, strategic planning, operational controls, and financial plans (King & Lawley, 2016). Hence, power and control are important elements in an organization as control ensures the right people are developed, attracted and retained.

Critical Evaluation  

In the case of Tesla, the power influences the operations of the company to a greater extent. Musk does not give more power to the hand of employees. This can be well understood with the elements of Bratton and Gold’s (2012) contemporary employment realties model based on power and control. For knowing power and control scope in Tesla these four elements are evaluated.  Tesla and Elon Musk is no stranger to tackling challenges his companies work on everything from self-driving cars to space (Khan, 2021). The company also works on communication as Elon Musk considered communication as the key.  In an email from Musk to Tesla employees, he encourages employees to buck the traditional chain of command that is used by companies in which the flow of information is upward which means from managers to employees (Mangram, 2018). The issue with this approach is that it serves to enhance the power of the manager but it fails to serve the company.  So Musk focuses on easy communication as employees are allowed to talk to anyone without following any hierarchy. As he thinks that this is the fastest way to solve a problem for the benefit of the company.  In this manner, Musk in Tesla tried to manage the communication in an organization and has given the power to employees to communicate effectively and stay involved in the organization processes and decisions (Eberhard & Tarpenning, 2016).  As per the opinion of Musk, such communication leads to issues such as delays in the problem getting solved (Khan, 2021). Where a person in one department needs to talk to a person in another department and that person again talk to the right thing to other department and then manager.  Then this piece of information has to flow back to others again. This is incredibly dumb and any manager who allows this to happen encourages poor decision-making (Chen, Zhang, & Wang, 2014).

Musk exercised control over the company board as the visionary, chairman of the board, and CEO. When the transaction took place the board was aware of the singularly important role played by Musk in sustaining Tesla in hard times and providing the vision to the company (Andersen, Dauner, Lang & Palme, 2017).  He was completely involved in the board discussions regarding the acquisitions.  Moreover, the control was not limited to business transactions; Musk had strong business and personal connections with others that make him again an important person for the company. Due to such reasons and the influence of Elon Musk in the operations of Tesla this organization is selected.  Power and control are the most used aspect in the company (Mangram, 2018).  Tesla and Musk are connected and people even acknowledge the influence of Musk over the company in public noting that he contributed actively and significantly to the company by taking necessary decisions, implementing changes as per the external forces, and hiring the talented pool that can contribute in product design and engineering (Eberhard & Tarpenning, 2016).

Now understanding the employee involvement in the organization in the case of Tesla the employee involvement is wider as employees have the power to make decisions at their level. The power of employee engagement in Tesla cannot be overstated.  As when employees are engaged and involved in an organization there are chances of higher productivity, fewer injuries and better workplace culture (Asimakou, 2009). When employees are engaged and recognized on a continuous basis then issues related to the safety and health of employees can be managed by 70% (Mangram, 2018). However, there are also issues regarding the involvement of employees in the organization. Tesla suspended 700 workers in 2017 with the aim to reduce costs and expenses with the aim to compete better with competitors.  Due to such decisions taken by Elon Musk, now employees are insecure and scared to involve in the decisions made by the company.  The company is facing issues such as salary structure, job security, and the safety of employees. All these discourage employee involvement in the organization. This indicates that the power and control by Elon Musk are somehow impacting the company’s culture. This might also influence the performance in the long run as if employees are not involved then they feel insecure and contribute less to an organization (Kim, 2020).

The employees’ rights in Tesla have so many issues and controversies as In Tesla employee who was organized by the union was fired by Musk.  As Musk does not want to get employees unionized and he threatened workers with the loss of stock options (Alghalith, 2018).  This indicates that Musk wants to control and power in his hand. The involvement of a third party may hamper the goals and objectives that are set by Musk.  This showed that the company violated labor law and did not give employees that power and freedom to work.  But Tesla wants to attain the goals and encourage innovation due to that Elon Musk want to retain power in his hand and control things. Musk has an influence on others and due to that employees get influenced and motivated towards attaining organizational objectives and goals.  Now analyzing the employee discipline such as safety and security of employees in an organization. Elon Musk focuses on maintaining a healthy environment in the company so that employees can contribute more positively.  His actions and decisions sometimes violate the rules and procedures of the company but due to the major controller people get influenced by his thoughts and perception.  There are many things that are only taken place in Tesla such as no long meetings, open communication, no unionization, using simple words, diversity, and don’t follow rules in an organization (Mangram, 2018).  Hence, from the above analysis, it is clear that to some extent such power and control create issues in an organization. It matters to a greater extent from where the power is acquired and how it is sustained. In the case of Tesla, power is mainly in hands of Elon Musk because most of the decisions are not as per business practices and policies. Rather based on the power that Musk possesses. The use of power is done mainly to give punishment as well as reward to employees. So it can be said that power and control are wider in the case of Tesla and there are many areas where the company needs to change so that they can remain competitive and focused on attaining the organization goals.

Conclusion

From the above analysis, it is concluded that Tesla is a well-known brand in the electric vehicle segment in the automobile industry at the global level. In order to understand the role of power and control in an organization and how these can be used Tesla is a better organization.  The organizational structure of Tesla is such that it supports growth and innovation. In this organization analysis case of Tesla, the organizational structure takes a traditional form including the company’s managerial control and focus along with limited operation expansion across the globe. Tesla and Elon Musk is no stranger to tackling challenges his companies work on everything from self-driving cars to space. The company also works on communication as Elon Musk considered communication as the key. The power of employee engagement in Tesla cannot be overstated.  Musk exercised control over the company board as the visionary, chairman of the board, and CEO. Hence, the use of power is done mainly to give punishment as well as reward to employees. So it can be said that power and control are wider in the case of Tesla and there are many areas where the company needs to change so that they can remain competitive and focused on attaining the organization's goals. 

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