Elon Musk and His Leadership

The Leadership is a characteristic of the person that drives the motivation of the followers in order enhance their capabilities and influence them to work together to achieve the desired goals beneficial for all (Vroom & Jago, 2007). Elon Musk (C.E.O of Tesla Motors) have proved that he is a successful entrepreneur and influential leader who converted his dreams into reality by achieving every single target one by one from the success of PayPal to SolarCity and from Tesla Motors to SpaceX. There are two types of leadership, in which one is transactional leadership and other is transformational leadership. The transactional leadership concentrates on receiving rewards in exchange of the efforts of subordinates. On the other side, the transformational leadership concentrates on intrinsic needs; in other words, going beyond the acquirement of short term goals. The transformational leaders have four features such as inspirational motivation, idealized influence, individualized consideration and intellectual stimulation (Podsakoff et al, 1990). Consequently, Elon Musk has all these four features making him a transformational leader.

Despite being the most innovative company, Tesla Motors is still trying hard to penetrate in the market in order to change the concept of external stakeholders by avoiding the use of conventional gasoline car and start using new fully electric vehicle. But the market is vast and the product is still in the development phase. By only considering the overall sales of passenger vehicles in 2016, it has been observed that over 74 million vehicles were sold and three major players of automotive industrial segment (e.g. Toyota, Volkswagen and Daimler) earned revenue more than $600 billion. The major producers of cars were China, Japan, Germany and U.S. This shows that the automotive market has much potential but introducing such novel product can be difficult for companies like Tesla. The product lifecycle of Tesla Motors’ new cars are still in the initial level of growth phase but crossed the introduction phase (see figure 2). Within the introductory phase, the company has few or no competitors so that the resources are allocated for the development and marketing of the new product as shown in the valley of death curve (figure 3) but the risk of product failure is high. However in growth stage, the product become commercialized and company start making profit from the launch of its product (Onkvisit & Shaw, 1986).

However, it is an alarming situation for the management of Tesla Motors that the company has reached at growth phase and still not earning the desired amount of profit. The target of Tesla Motors is to produce 500,000 cars every year by 2020. In that case, the company should take further steps with change management strategies and result-oriented environment that can help in achieving the desired target. The fact is that the production of such amount of vehicles by 2020 per year is not so farfetched according to the size of the market if proper steps are taken. But at this stage, the overall sales of Tesla Motors can contribute only 1% to the total sales of cars in 2016 (Statista, 2016). Being a revolutionary company does not mean that all odds will be in favor of that company, but there are always loopholes and gaps present between the desired outcome and actual outcome. In case of Tesla, the company is currently facing tremendous amount of pressure in terms of sales, revenue and manufacturing. The third quarter earnings report have shown very disappointing figures which forced the C.E.O to review his decisions and implement change management strategies that can help the company to overcome the issues (NBC News, 2017).

Supply chain analysis helps to see how the industry is growing and what decisions has to be made in improve it’s growth. This analyze helps to check which suppliers would be the best and which prices would be good for the company. According to According to Ellram (1991, pp.13), supply chain management represents a network of firms interacting to deliver a product or service to the end customers.

Tesla Motors has shown that the idea of commercializing electric vehicles on a large scale is practicable if proper measures are taken with efficient utilization of capital and technology. The dream of the company has not been achieved yet but the process of prosperity is on its way. However, it is quite difficult for any newcomer to enter in the market of automotive industry where the major players have positioned themselves firmly but Tesla Motors have proved wrong and surviving in the market with commitments and promises. The target of manufacturing 500,000 electric vehicles is not farfetched as the C.E.O has already proved himself the great entrepreneur of 21st century. But this dream can only be achieved if proper decisions are taken with better change management strategies. Through proper leadership style, the company can meet the desired target on time and can reduce the stress level and anxiety among the minds on employees. If transactional leadership is implemented then employees can be internally motivated and work hard so that they can be rewarded accordingly.

Works Cited

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