Tesla Inc.

ʼs Organizational Culture &

Its Characteristics (Analysis)
Tesla, Inc.ʼs (formerly Tesla Motors,
Inc.) organizational culture creates
human resource competence
necessary for innovative products in
the global automotive business. A
firmʼs organizational or corporate
A Tesla Model S Prototype at the 2009 Frankfurt
culture represents the customs and
Motor Show. The characteristics of Tesla Inc.ʼs
(formerly Tesla Motors, Inc.) organizational culture values that define workersʼ behaviors
enable innovation and responsiveness of the and decisions. Teslaʼs organizational
automotive business. (Photo: Public Domain)
culture empowers its workforce to
search for ideal solutions that make the business stand out in the
automotive industry and the energy generation and storage industry. The
company encourages employees to innovate to support continuous
improvement of the business. For example, through its corporate culture,
Tesla maintains the human resource capabilities important in its
continuing growth in the global market for electric automobiles, batteries,
solar panels, and related products. In this way, the corporationʼs cultural
traits function as a channel for adding to strategic effectiveness in
enhancing the business. Through the organizational culture, Tesla Inc.ʼs
management optimizes employees to achieve creative and innovative
behaviors. These behaviors are essential to maintaining the technological
innovation that forms part of the companyʼs foundation.

Teslaʼs organizational culture creates opportunities for innovation that

keeps the competitiveness of the electric car business. The
characteristics of this corporate culture encourage the companyʼs
employees to generate new ideas and solutions. In this company analysis
case, such behavioral factors contribute to Tesla Inc.ʼs competitiveness in
facing automobile manufacturing firms like General Motors Company,
Toyota Motor Corporation, Honda Motor Company, Nissan Motor
Company, Bavarian Motor Works (BMW), Volkswagen, and others.
Teslaʼs Organizational Culture Type & Features
Tesla, Inc. has an innovative problem-solving organizational culture.
This type of corporate culture motivates employees to develop profitable
solutions to current and emerging problems in the target market. For
example, the company employs its organizational culture in developing
advanced electric vehicles as a solution to environmental issues
surrounding automobiles that have internal combustion engines. The
companyʼs ability to keep introducing advanced electric vehicles reflects
the benefits of its corporate culture. Tesla Inc. identifies six main features
of its organizational culture:

L. Move Fast
M. Do the Impossible
O. Constantly Innovate
P. Reason from “First Principles”
U. Think Like Owners
X. We are ALL IN

Move Fast. Speed affects Tesla Inc.ʼs competitive advantage. This

characteristic of the organizational culture highlights the importance of
employeesʼ capability to rapidly respond to trends and changes in the
international market. For example, the corporationʼs human resources
provide the capability to develop cutting-edge products that match or
exceed those from competing automotive firms. In this way, Teslaʼs
corporate culture facilitates business resilience through speedy
responses to current issues and challenges in the global automotive
industry.

Do the Impossible. In developing cutting-edge products, Tesla must

ensure that its corporate culture encourages employees to think outside
the box. This cultural characteristic recognizes the importance of new
ideas and solutions, but it also emphasizes the benefits of considering
unconventional ways. For example, human resource managers train
employees to go beyond conventional limits of productivity and creativity
in automotive design, leading to the development of new solutions to
energy and transportation needs. This condition opens new opportunities
for Tesla Inc. to strategically improve its business performance. This
cultural condition also makes the company an influential entity in
prompting radical ideas in the international automotive and energy
solutions market.

Constantly Innovate. Innovation is at the heart of Tesla, Inc. This feature

of the organizational culture focuses on the continuous nature of
innovation at the company. For example, the corporation continuously
researches and develops solutions that improve current energy storage
product designs. In this context of the business analysis, constant
innovation helps develop cutting-edge electric cars and related products.
Continuous innovation maintains the competitive advantage necessary to
address the strong force of industry competition determined in the
Porterʼs Five Forces analysis of Tesla Inc. The company addresses this
need through a corporate culture that rewards constant innovation.
Managers motivate employees to contribute to constant innovation in
business processes and output.

Reason from “First Principles.” CEO Elon Musk promotes reasoning

from first principles. These principles revolve around identifying root
factors to understand and solve problems in the real world. For example,
Tesla Inc.ʼs energy storage products are one of the solutions to
challenges in using renewable energy, and challenges in improving the
efficiency of energy utilization. Through the companyʼs corporate culture,
employees use first principles in fulfilling their jobs. Teslaʼs human
resource management involves training programs to orient employees to
this feature of its organizational culture.

Think Like Owners. Tesla employs its organizational culture as a tool to

maintain a mindset that supports business development. For example,
the company motivates its workers to think like they own the
organization. This ownership mindset supports Teslaʼs corporate vision
and mission statements by encouraging employees to take responsibility
and accountability in their jobs and in the overall performance of the
multinational business. The ownership mindset is a powerful behavioral
factor that helps grow and strengthen the integrity of businesses in
various industries. This corporate cultural trait aligns workers with the
companyʼs strategic objectives, thereby improving strategic
effectiveness.

We are ALL IN. Tesla, Inc.ʼs organizational culture unifies employees into
a team that works to improve the business. For example, this cultural
characteristic helps minimize conflicts through teamwork. Such
teamwork also develops synergy in the companyʼs human resources. As
a result, the corporate culture maximizes the benefits from employeesʼ
talents and skills. Synergistic teamwork contributes to Teslaʼs
competitiveness in the international automotive market. This unifying
cultural approach also facilitates corporate management and strategy
implementation throughout the organization.

The abovementioned cultural characteristics indicate that Tesla, Inc.

focuses on encouraging innovation that leads to useful products for the
global market. The companyʼs progress and growth are based on
technological innovation. Tesla Inc.ʼs organizational culture has remained
focused on such innovation since the founding of the business. However,
it is expected that the company will gradually change its corporate
culture to accommodate new needs as the business expands and
diversifies its product offerings.

Tesla, Inc.ʼs Corporate Culture Implications,

Advantages & Disadvantages
Teslaʼs organizational culture puts emphasis on innovation. An advantage
of this cultural trait is that it enables the corporation to develop high-
technology products that attract its customers. For example, Tesla
automobiles, combined with the companyʼs powerful branding, have an
increasing share of the automotive market. This advantage aligns with
Teslaʼs generic competitive strategy and intensive growth strategies. The
corporate culture is also advantageous in terms of support for rapid
response and problem solving. This cultural trait keeps the company
abreast with new technologies while making its products effective and
relevant to customersʼ needs and preferences.

A disadvantage of Teslaʼs organizational culture is its pressure on

employees to constantly innovate. Innovation benefits the company, but
puts a strain on human resources. Nonetheless, properly implemented,
this cultural characteristic ensures long-term business competitiveness.
Also, Teslaʼs corporate structure imposes limits on the responsiveness of
employees, thereby counteracting some of the effects of the corporate
culture in facilitating speedy decisions and actions to address concerns
in the automotive business.

References

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