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LEADERSHIP STYLES Elon Musk Tesla founder and CEO of SpaceX

Research · February 2021

DOI: 10.13140/RG.2.2.25260.18561

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2/7/2021 LEADERSHIP STYLES
Elon Musk Tesla founder and CEO of SpaceX

Mohammed Hamed
WORLEY
 Table of Contents
Introduction ..................................................................................................................................... 2

Impact of Tesla’s leadership on Organisational Performance ........................................................ 2

Leadership Style of Elon Musk for a Positive Impact on Organization ..................................... 4

Conclusion ...................................................................................................................................... 5

References ....................................................................................................................................... 6

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Introduction

Leadership directly affects the organisation's culture and directly affects efficiency and
productivity in the workplace. A good leader will align them to fit the employee and provide the
necessary resources to fulfil those objectives. Delegation of work and interactions with employees
can help boost employee morale. In this, the focus will be on Tesla and its founder Elon Musk.
Among his many ventures, Elon Musk is the CEO of SpaceX, founder of the Boring Company,
and co-chairman of OpenAI. The leadership style directly affects Tesla. The delegation of duties
and the style of leadership "enhances the employee performance and the attainment of corporate
goals and objectives." (Ibrahim and Daniel, 2019)

Elon Musk has a drive that cannot be unseen. Tesla's mission is sustainability in the future,
and hence its requirements are different from other organisations. Thereby, he has a competitive
edge as there are very few barriers to entry in this industry. This has made him a market leader.
Apart from his just cars, Tesla is aiming toward a different set of energy-related solutions that will
design our future. Hence, it has resorted to Power Wall, Solar Roof and PowerPack and moved
his vision further into renewability for homeowners and business. Thereby, his vision is one that
keeps expanding and needs his employees to do the same.

Impact of Tesla's leadership on Organisational Performance

Tesla, being a manufacturing company, is not without its problems. There are advantages
too. However, the measure of how effective Tesla has been following a policy of empowerment
and culture. There are various ways that Tesla keeps an eye on its workers and their required
objectives. The setting of objectives makes the goals easy to follow as there is a benchmark that
they can be measured against Stretch goals are essential when it comes to accomplishing them.
Examples can comprise of revolutionising cars and neuroscience. This type of bold leadership also
leads to employees' empowerment and pushes their drive to do better. If one was to consider
Maslow's hierarchy, there is a certain level of motivation required for employees to succeed.
Therefore, in today's world, there needs to be for the employee to be "externally motivated.
Vroom's theory can also emphasise this in being successful by having the right type of access to
machinery and tools." (Uysal, Aydemir and Genç, 2017) This can be seen by Tesla and its
management as they provide the technological advances to equip their employee with the best.

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 The idea of empowerment in its employees makes it easier to be more innovative. The
company's measurement of its employee performance is based on its productivity and the number
of cars produced or the number of inquiries catered to and complaints handled. There is
technological excellence, and this gives Tesla a competitive edge. The employees are kept up to
date so they can exercise their productivity freely. Elon Musk does not have a democratic or
aristocratic way of leadership. Instead, he has an autocratic or transformational way of leadership.
There is full disclosure of his goals throughout the organisation, and he makes his learning
environment known. He has a quest for continuous improvement, and hence he has to correlate his
employee's productivity with their satisfaction levels directly. A transformational leader inspires
his employees. However, this is limited to his being and extends to challenging his employees on
an intellectual level and setting an example via his actions. He has also suggested that "they feel
a part of a larger team and by reducing the noise and blockers in their work." (CNBC, 2017)

There is also a sense of resilience in this organisation that he faces. The success of an
organisation is dependent on the leader. Their ability to bounce back from setbacks sets a precedent
for the employees who can hen motivate themselves. They are also adamant in risk management,
and this is practised in their external and internal environment. Risk mitigation is essential here as
they increase productivity. An example of this can be in 2014, there was an extensive demand for
the products and Tesla had to increase production, and it did do by moving the production centre
there. Speed is encouraged, and this moving fast keeps them updated with the global challenges.
The human resources over at Tesla also develop "cutting edge products" that come into
competition with competing firms. Unconventionality is thought of as strength and group interests
are thought of first. Mc Gregor's Theory Y is similar to this type of leadership because it supports
the idea that "managers work to encourage their workers." They help their employees in every
field they need to excel in. (Uysal, Aydemir and Genç, 2017)

Communication is substantial when it comes to good leadership. There needs to be an

understanding between employee and the employer on what is required. There is a certain level of
autonomy within the organisation. The information is not limited to the management, and there is
an interconnectedness within the departments that paints a bigger picture than just a top-down
approach. A learning culture is implemented where change is embraced, and there is training to
cover up the shortcomings of the employees. Trusting the employee with responsibility is another

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trick he has up his sleeve. They are then held accountable for their actions. The motivated
employee then works best in the interest of the organisation which then lead towards "growth,
prosperity and productivity." (Manzoor, 2012)

Tesla's organisational structure is a functional form. There are further divisions in this
structure. There is a function-based hierarchy, and there is centralisation as well as divisions. The
organisation practises a certain level of centralisation, and this can be disadvantageous because
with everything controlled at the centre there can be unresolved issues in the regional offices.
Thereby, delegation is a necessity when it comes to this leadership. Suppose one were to explore
the idea of a transformational leader further. In that case, this weakness in situational analysis can
be a source of concern as not every situation can be the same and expected to have the same
outcome. It creates a dependency on the leader and makes performance solely depend on the
consumer's drive. (Odumeru and Ogbonna, 2013)

Leadership Style of Elon Musk for a Positive Impact on the Organization

Elon Musk is known for his aggressive attitude towards success innovation which can be
seen through his innovative products that he and his respective team have launched. The tesla
company has aimed to provide with the most innovative products to its customers for which he
uses the transformational leadership style which emphasises on innovation and development of the
skills of the employees that helps the company to perform better and create a competitive
environment for the rivals by bringing in innovation within the company (Yauney, 2018). The
transformational leadership style is about motivating the employees and providing values to them,
which increases their loyalty towards the brand and the respective company.

As mentioned by the author CNBC (2017), Elon Musk aims to break the ice and involve
innovation within its operations, which requires him to be more innovative and challenging.
Transformation leadership is all about developing new ways to process the operations of the
business. Elon musk has developed the most innovative companies of the world like PayPal,
SpaceX, and the tesla motors as well. Therefore, this can be analysed that Elon musk has a strong
team and has innovative ideas that he executes through his transformational leadership style and
sometimes the transactional leadership style. The transactional leadership style is used several
times by Elon Musk due to the aggressive approach he follows to imbibe innovation within the
company's operations (Chaudhry, and Javed, 2012).

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Moreover, having innovation within the competitive environment where the companies like Apple
Inc. and Microsoft operates, it is very complex to be on the top of the list. Therefore, Elon musk
follows the transactional leadership style that helps him achieve short-term goals. The employees
working in the organisation are directed to achieve the goals at the priority in return for some
incentives and rewards.

Conclusion

Tesla has been one of the most innovative companies in the world in recent times due to
the operations that it has incorporated and came up with new products for the betterment of society.
Moreover, his innovations have given more significant opportunities to the employees by
incorporating new techniques and strategies that increase the organisation's value. Therefore, Elon
Musk used both the leadership styles that include the transformational and transactional styles
(Odumeru, and Ogbonna, 2013). It can be evaluated that the transformational leadership and
transactional leadership executed by Elon musk both positively impact the performance of the
employees and the organisation (Yauney, 2018).

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 References

Adriansyah, M.A., Setiawan, M. and Yuniarinto, A., 2020. The Influence of Transactional
Leadership Style and Work Culture on Work Performance Mediated by Work
Motivation. Jurnal Aplikasi Manajemen, 18(3), pp.563-571.

Adriansyah, M.A., Setiawan, M. and Yuniarinto, A., 2020. The Influence of Transactional
Leadership Style and Work Culture on Work Performance Mediated by Work
Motivation. Jurnal Aplikasi Manajemen, 18(3), pp.563-571.

CNBC, 2017. The self-made tactics billionaire Elon Musk uses to motivate his teams.

Duggan, t., 2018. [Online] Yourbusiness.azcentral.com. Available at:

<https://yourbusiness.azcentral.com/transformational-leadership-examples-business-
4571.html> [Accessed 3 February 2021].

Ibrahim, A. and Daniel, C., 2019. Impact of leadership on organisational

performance. International Journal of Business, Management and Social Research, 6(2),
pp.367-374.

Odumeru, J. and Ogbonna, I., 2013. Transformational vs Transactional Leadership Theories:

Evidence in Literature. International Review of Management and Business Research, (2).

Uysal, H., Aydemir, S. and Genç, E., 2017. Researches on Science and Art in 21st Century
Turkey. 1st ed. Gece Kitaplığı.

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