End of Course Paper

Hadi Haikal

MGMT 560 – Organizational Leadership

August 13, 2021

Table of Contents

 Introduction

 Fundamentals of leadership, including leadership styles and traits

 Strategic thinking and planning

 Communication and leadership

 Organizational culture and climate

 Leading and Managing change

 Decision making

 Ethics and professional codes of conduct

 Managing conflict

 Conclusion
 This paper will seek to assess Tesla as a business entity and analyze how the organization

operates and manages regarding the concepts discussed in this course. Tesla has had a difficult

journey that led to its successful operation which can be mostly attributed to the leadership

culture Elon Musk has incorporated. Elon Musk, who acts as CEO, invested in Tesla as a

majority stakeholder with the goal of making electric cars an attractive alternative option for

consumers. Since that concept was still in early development, for Tesla to survive as a business,

it was crucial to integrate the known models of effective leadership and management. However,

with Tesla going against the grain of the automotive industry, they had to come up with a less

traditional way of doing things which I will be highlighting in this paper.

Having invested most of his accumulated wealth from selling his first company, Elon

assumed his position of CEO at Tesla with an urgency unmatched in the business world. Elon

started the process of innovation that focuses on the fundamentals of math and physics,

developing technologies from the ground up without assuming obvious solutions. His vision of

Tesla was so well thought out and attractive that it rallied employee’s support and work ethic in a

way that was not previously seen. Its safe to say Elon’s leadership style is one that is

transformational in nature, however, labeling him as only that would take away all the other

aspects of his leadership. As mentioned in Lussier’s “Leadership Theory, Application, Skill

Development”, the paradigm of leadership theory changed in the late 1970s to one that is

integrative that combines leadership theories in a bid to analyze how some leader’s followers

were willing work hard and sacrifice to achieve the organization’s goals. An optimal way of

accessing Elon Musk’s leadership style is using this integrative concept to pinpoint the

dimensions of his unconventional leadership traits and behaviors.

 Elon benefits from high energy that enables his relentless pursuit and drive towards a

goal while dealing with all the stress that comes along with it. The optimism he has was key in

the early conception of Tesla. While everyone in the business world thought working on electric

cars was kin to burning money and wasting time, Elon had a more positive vision of transitioning

society from fossil fuels which he saw as being the inevitable outcome. Some people have high

energy but tend to doubt their decisions when challenged. Elon possessed a certain self-

confidence that stems from acquired knowledge which facilitated his decision making and task

persistence. While he was self-confident, Elon was also aware of the pitfalls of arrogance and

remained flexible enough to allow his decisions to be well thought out and remain emotionally

stable. Integrity had a large role with Elon’s influence, having represented himself as an honest

and ethical businessman, it was easier for employees and stakeholders to trust his ludicrous

ambitions. Without any doubt, Elon’s most unique trait was his overall intelligence in the

industries he worked in. His ability to think critically and deconstruct problems to their bare

bones, making crucial decisions has made Elon a force to be reckoned with.

One factor of Tesla’s present success is Elon’s effective strategic thinking and planning.

Elon had laid out a plan for Tesla from day 1, planning to first bring a relatively expensive but

fun electric sports car to market as a proof of concept, then building a high-end sedan that could

compete with the likes of BMW and Mercedes which would generate enough profit to start on

the goal of mass producing a midrange electric car. The plan was riddled with obstacles that

made these goals seem impossible, however, Elon developed his own way of overcoming these

obstacles. The framework he developed for deconstructing complex problems starts with

identifying the problem and its common assumptions. His strategy was to break away from these
assumptions to widen the possible solutions ignoring the crutch of traditional thinking. Next step

would allow him to break down the problem into its fundamental truths by challenging these

assumptions and focusing on first principle reasoning. Finally, he would use these fundamental

truths to develop a strategic plan that would plot a new course of action. In retrospect, most

companies would split these actions, if at all, into different departments, taking years of research

and development to reach a consensus that the powerful thinking of Elon allows.

All this critical thinking and planning could not have manifested into tangible outcomes

without the communication model implemented at Tesla. According to chapter 10 of PMBOK,

the method of communication between Tesla and stakeholders is most similar to the interactive

communication model. It enables multidirectional communication within the company and

stakeholders allowing a cooperative system that nurtures efficient innovation. A great example of

this can be seen from the documented interactions of Elon, stakeholders, and employees in

Ashlee Vance’s biography of Elon Musk. During the recession of 2008, Tesla was struggling to

stay afloat due to manufacturing issues and recalls of the first Tesla Roadster. The company was

running out of money and Elon had to initiate a round of investing that was only possible in a

recession due to the effective and continuous communication between the company and

stakeholders. The stakeholders who had been encouraged to visit the headquarters and see the

ongoing development were aware of Elon’s vision and supported the plan he had set with the

promise of being profitable. Elon also instituted a communication school of thought within the

company that encouraged all employees to ditch the traditional chain of command flow of

communication to a model that allows cross functional communication between employees and
setting a tone of collaboration. This unorthodox method opened the door for anyone at the

company to engage with whomever they deem necessary to achieve timely solutions.

Tesla and Elon have completely revolutionized the way companies seek and harbor

organizational change and a climate of strong mentality. Elon has established a sense of tribal

culture within Tesla that can be described as cult-like. Often, employees complain of the

workload that is expected from them daily, basically overworking themselves to the ground.

Elon addresses this issue with leading by example, working up to 120-hour weeks, sometimes

resorting to sleeping at work. This creates a culture that brings together all employees,

transcending titles with the unified goals of the company. In chapter 10 of Lussier and Achua’s

“Leadership Theory, Application, Skill Development”, it is stated that: “In the process of culture

creation, sustainability, and renewal, the past is often used as an indicator of things to come.”

(Lussier & Achua, p.370). Tesla has incorporated every achievement they have made into an

inspirational display at their headquarters as a metric of success and constant reminder of why

employees are expected to take part in this organizational climate.

Due to the difficult nature of the automotive industry, Tesla had to be unconventional to

survive while sustaining the changes they have implemented. Elon established a justified sense

of urgency throughout the company. Referring to Vance’s biography, Elon is heavily involved

with sustaining that change by communicating the strategy to each employee and making it a

requirement for any purchase to be approved by him first, encouraging employees to find

creative ways to bring the cost of parts down. Using his vision of Tesla revolutionizing the
automotive industry and saving the planet from fossil fuel consumption, Elon inspired employees

to think of broad-based action and to be cost effective which led to systemic change within the

organization. In the findings of Ramasamy’s “A critical analysis of John P. Kotter’s change

management framework”, visioning was measured as one of the crucial stages to establish

change and although Elon’s employees were overstretched beyond any typical occupation, they

were driven by the formation of an environment of eagerness around the vision that gave them

determination and direction.

Often Elon’s decisions were met with a fair amount of scrutiny and opposition. Even with

all the integrity accomplishments bring, Elon’s decision making is still dissected by peers and a

fair share of public scrutiny. Elon is known to be a sensible person who rationalizes from the

ground up, starting with his vast knowledge in the fundamentals of math and physics. Thus, Elon

corresponds with the rational decision-making model, as described in the slides assigned

(8.1,8.2), including his own reasoning with respect to finding alternatives and concluding a

legitimate solution. Elon’s method starts by identifying the question that needs to be asked and

then decides to gather enough evidence to acquire axioms, assigning each with a probability of

certainty. In turn, Elon has already identified the problem by asking the right question, analyzed

evidence to discover new solutions, and evaluated each solution based on factual merit. With this

method, a favorable solution would be accurately highlighted. Elon then attempts to disprove his

conclusion by obtaining further support from experts, considering the consequence of different

theories to be compared against each other.

 That amount of innovation comes with a fair share of social responsibility and ethics.

Besides manufacturing cars. Tesla also concentrates on energy innovation, expanding their

trajectory into regions of high ethical importance. Elon has a decent record of being an ethical

leader which promotes ethical standards within the organization, helping create a transparent

culture within the workspace. According to Dr. Tiffany McDonell’s “Deloittes’s three ways to

instill ethical guidelines”, providing ethical leadership behavior is one of the ways of forming an

ethical atmosphere that establishes the correct tone starting with the executives. Elon’s corporate

organizing checks all the boxes regarding the three ways mentioned in the article. One big

example is displayed in an email Elon sent to Tesla employees in late 2013. In this email, Elon

speaks about his genuine unease of employee injuries and asks to be informed about any injury

in the workspace, while also voicing his intent of meeting all previously injured employees to

detect the issues at hand. Additionally, he stated that he will replace the employees at the

production line to perform the same operations, citing that all managers should be doing the

same. At the end Elon stated: “At Tesla, we lead from the front line, not from some safe and

comfortable ivory tower. Managers must always put their team’s safety above their own” (Mejia,

2017). These actions by Musk certainly fitting into the second way revealed by McDowell,

helping strengthen practices through corporate processes. With the third way of instilling ethical

guidelines “create confidential means of communication”, as mentioned previously, Musk is also

known for enabling free communication between all employees, disabling organizational barriers

and fear of speaking out.

For Elon and Tesla, managing conflict has become an easier process due to the

extraordinary obstacles that have been topped over the years. Although in recent times there has
not been many concerns on this topic, Tesla has had many outrageous commentaries written

about the company, mentioning employee disputes with the amount of workload they are

required to cope with. Elon is infamous for being an assertive leader while also being able to

adapt or work together to resolve any conflict. His approach trusts each employee completely

which comes with a lot of responsibility.

A large factor of managing and preventing conflict is the ability for managers to deliver

more humility and openness about what the right behaviors are. Elon supports the approach of

multi-level communication between sectors to solve any conflict that could have an effect on the

organization. He also remains critical of each employee’s capability to settle personal matters on

their own. with the climate that motivates, employees at Tesla tend to look at problems with a

larger perspective, concentrating on the vision in place. In turn, this has clearly been a positive

net outcome for the organization where any conflict can be managed effectively in an efficient

manner.

In conclusion, Tesla, with Elon acting as the lifeblood of the company, displays great

fundamental leadership throughout the company which trinkles down to low-level managers and

employees. Elon himself encompasses the benefits of several leadership styles, mainly

transformational, and uses his leadership in an effective way that gives his employees power to

be leaders and decision makers themselves. His relentless drive places Tesla in a class of its own

as a competitive innovator in the energy space. The strategic thinking and planning that Tesla has

laid out positioned the company and its employees to tackle the obstacles associated with
manufacturing and delivering their electric cars. This achievement was in part due to breaking

down the conventional chain of command communication to one that values multi-level

communication to get things done correctly. In addition to that, Tesla has created and nurtured a

culture of organizational change with the intention of breaking down barriers and inhibiting a

climate of cooperation and innovation that is sustained by corporate traditions and processes.

Tesla has been fortunate to have a CEO that has had the experience and intuition in

grained in him to be an outstanding decision maker and problem solver. Using Elon’s approach

to decision making, Tesla has made breakthroughs in battery technology, safety operations, work

culture, and so much more. Processes for managing conflicts within the company have also been

structured methodically to improve the relationships at work and encourage collaboration. Since

Tesla has a huge public responsibility in making safe cars and energy storage solutions, ethical

guidelines at Tesla are of crucial importance. Elon leads by example with overworking himself,

but also by being an ethical leader, setting the tone for ethical compliance stemming from the top

executives.
 References

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