Introduction
The terms “Change” and “Change Management” are often used in industries nowadays. Both terms have separate meanings but are frequently used interchangeably. Change management aims to facilitate employee adaptation to the new work environment (Hayes,2022). Change refers to the transition from one state to another. The industrial revolution, which began in Britain and extended to other rich nations, stimulated the development of scientific management techniques. Capitalist principles could never be accomplished with conventional management techniques (Hayes,2022). Large corporations and governments have recently been regarded as employing superior management practices. Individuals and businesses must adapt to the changing nature of contemporary culture to succeed. This synopsis will focus on how Tesla Motors manages change.
Tesla Motors Company Background
Engineers Martin Eberhard and Marc Tarpenning established Tesla Motors in 2003 in San Carlos, California. Nikola Tesla, a 19th century inventor whose work on rotating electromagnetic fields resulted in the development of alternating current, the predominant method of electrical transmission today, inspired the company’s name (Thomas et al.,2021). After making significant strides in electrical engineering and the sciences, he has gained widespread recognition in the tech industry. Elon Musk, the CEO of Tesla Motors and co-founder of PayPal, provided most of the company’s funding, over $30 million, in 2004 through a personal donation. The first production model, the Roadster, was released in 2008.
Once Elon Musk took over as CEO of Tesla in 2008, the company made strides toward incorporating renewable energy sources like solar farms. For many years, the firm has been a pioneer in electric vehicles. Yet, thanks to its founding, acquisitions, and production practices, Tesla has become significantly more involved in sustainable energy production and storage, with a special focus on batteries. The company has also increased its involvement in the massive market for buying and selling tax credits, which it uses to generate income. Families with children under the age of 18 make up the vast majority of Tesla’s clientele (Thomas et al.,2021). These families tend to have many well-educated and successful members in their chosen fields.
Tesla Hypothetical Change
Tesla Motors must be more innovative and creative in light of the current technological advancements in the automotive industry. Toyota, Volkswagen, and Mercedes work nonstop to gain a competitive advantage over Tesla. Even though Tesla Motors has successfully produced electric automobiles, the electric vehicle sector has also contributed to Tesla’s competitive advantage. For the company to introduce more cutting-edge automobiles, it must be more aggressive. The company should focus on building both luxury and affordable electric vehicles (Omonov and Dehqonov,2022. p.131). Demand for electric vehicles has recently surged, presenting Tesla with a significant opportunity to examine and pursue. Tesla employs vertical integration, general strategy, and competitive tactics to chase new prospects; therefore, the company will perform better if similar strategies are applied to the production of electric vehicles. The fact that Tesla’s competitors make low-quality and inexpensive electric vehicles present a tremendous opportunity for Tesla to supply high-quality automobiles at competitive prices.
Tesla Leadership style
A company’s success heavily depends on its top executives’ leadership style. Without great leadership, an organization has a far higher probability of failing, while good leadership increases the company’s chances of success (Khan,2021.p.5). Leadership significantly affects the organization’s culture, efficiency, and output. The ultimate goal of any business is to make money; therefore, its leaders must be able to balance company objectives with the requirements of their staff and equip them with the resources they require to do their jobs well. Staff morale could be improved through better task delegation and more interpersonal connections. Leaders in the same field may adopt various approaches to achieve their goals.
Elon Musk, CEO of Tesla Motors, is well-known for his aggressive approach to successful innovation, as shown by the company’s history of introducing ground-breaking new features. Organizational performance is enhanced through the deployment of transformational leadership that places a premium on innovation and the personal growth of individuals. Hence this, in turn, creates a more level playing field for the company’s rivals. Being the most creative automaker is essential to the company’s vision. The goal of a transformational leader is to inspire their team to greater heights of performance and loyalty to the company, and it is ideals. Elon Musk must be more risk-taking and creative to fulfill his goals of incorporating innovation into Tesla’s daily operations and shattering established norms. Introducing fresh processes and products within a company is crucial to transformational leadership. Elon Musk is the brains behind three of the most innovative companies in the world today: PayPal, SpaceX, and Tesla Motors. As Elon Musk uses both transformational and transactional styles of leadership, we may safely infer that his team is strong and that his ideas are cutting edge.
Further, Elon Musk frequently uses transactional leadership to incorporate new ideas into the operational procedures of his organization. The CEO of Tesla instills a culture of innovation in the company’s daily operations through a transactional leadership style (Muwara and Uddin,2020). Market share is difficult when competing with forward-thinking corporations like Apple Inc. and Microsoft. Therefore, Elon Musk achieves his immediate objectives through transactional leadership. People should put the company’s goals ahead of their own to maximize their compensation. Using the two transactional and transformational leadership forms, the company would be able to invent electric cars.
Challenge for Change
Most firms have been compelled by market pressures to embrace the necessity of internal reorganization. Despite the overwhelming consensus that organizational transformation is the most successful way to enhance an organization’s performance, it is impeded by several factors. One of the elements that can hinder an organization’s adaptability is its approach to handling change. Although organizational transformation can result in substantial change, it is typically beneficial. Yet, organizational leadership teams frequently fail to sustain the improvements they implement. Experts in the field of management have observed this. Planning and implementing a change when an organization is in place is considerably simpler. Yet, the adjustment is challenging to adopt and implement due to changes in the organizational setting. Two types of obstacles can develop while attempting to make a change: hard problems and soft barriers.
Typically, the company’s management is responsible for the hard barriers, while the people and the processes within the company are responsible for the soft barriers. Adopting new technologies is a complex issue. Most businesses now depend critically on technological progress, but this development has difficulties (Whysall et al.,2019). A powerful, advanced technology would be needed to implement the new electric cars successfully. Assembling a new piece of technology that could help bring about electric cars. Several logical problems arise when this new technology is combined with older technology. As a result of the new technology, Tesla would have to train its personnel to acquire the necessary skills and expertise to work within the new framework. During the rollout of a new system, the term “end user” refers to the company’s employees. If people do not believe that adopting new technology will simplify their lives, they will wonder why it is necessary. This may make it harder for Tesla to innovate in electric vehicles.
Electric car pricing and affordability would also be considered significant challenges. Yet, electric cars are typically more expensive than conventional cars. Because of the increasing popularity of electric vehicles, Tesla will need to develop a strategy to undercut the competition on price. There is apprehension that Tesla’s rivals would exploit this information to undercut the company by offering similar products at lower prices. Yet, if customers are only loyal due to the company’s reduced product options, the company’s profit margins will drop even if sales remain stable. Since discounted goods drive customers into businesses, full-priced goods are essential for maintaining a healthy profit margin.
As an added hard problem, businesses may struggle with scalability during the transition. With the current state of technology, there is a greater probability that the development of new electric vehicles will result in higher demand. High demand means the company must prepare to increase production and improve its supply chain management. So, the company’s leadership is responsible for promoting the use of electric vehicles; yet, if they fail to adequately plan for the transition to the new system, competitors may gain an edge by entering the market later with similarly innovative electrical technologies.
The implementation of change is greatly hampered by resistance to it. The longer an approach is used, the more invested workers get. As everyone is comfortable with the status quo, there is a lot of resistance to change inside the organization (Elgohary and Abdelazyz,2020). There may be internal opposition to change and change management because of the difficulty of the issue or because previous attempts to make modifications failed. A culture of stubbornly supporting the status quo could result from corporate politics, inefficient management of disruptive employee behavior, and the pursuit of individual interests. Internal politics, loose behavior regulation, and personal agendas emerge as cultural obstacles during the change implementation process. The combination of these issues has produced a culture that is hard to alter.
On the other hand, soft challenges impacting change implementation include employee training. Cultural transformations are not the product of a single incident. It is gained through the experience of learning new approaches that contradict your fundamental notion that your method is the “correct” method. Most likely, a person’s culture will change gradually. The implementation of new electrical cars would require the organization to change some of its cultures, such as design and luxury. The firm has created a culture of innovation and design; thus, after implementing electric cars, it should change its culture and focus on affordability and accessibility.
Low morale among workers is another obstacle to change adoption. Most employees loathe change unless it is a change they have requested, making it difficult to gain implementation support. Instead of being a hierarchical organization in which you have all the power, Tesla Motors will be run on a bottom-up basis in which all employees are encouraged to provide input and take part in decision-making (Elgohary and Abdelazyz,2020). The CEO fears a dramatic drop in morale due to workers realizing that they have little say in their work environment. Because of the likely resistance to the changes brought about by the reform, low morale becomes an obstacle for your company. This opposition will make it more challenging to guarantee a smooth transition, which could impact output and efficiency. Employees who don’t agree with your judgments are much less likely to carry them out in a way that benefits the organization.
Lack of communication often leads to “soft problems,” slowing the transformation process. Workers are curious about any developments, positive or negative. Because of managers’ lack of communication, workers may feel excluded from important decisions and develop resentment toward management. Hence, they will become resistant to change result of this (Direction,2022. p.25). Employees need to be retrained for the transition to be effective and to produce electric automobiles using the new technology. That’s why it’s so important for businesses to invest in training for their staff members.
Change Management Plan
The spectrum of responses to organizational change includes opposition and, rarely, enthusiastic support. Hard and soft barriers often arise when a change is implemented, making its full realization more difficult. If Tesla Motors doesn’t plan to address this challenge, developing new electric vehicles will be difficult. Hence, Elon Musk, CEO of Tesla, must devise a change management strategy to deal with the company’s transformation and the soft and hard challenges.
The ADKAR method (Awareness, Desire, Knowledge, Ability, and Reinforcement) should be utilized for hard and soft obstacles. Using the ADKAR approach, Tesla Motors will analyze the factors that make change challenging and create strategies for communicating with employees. As the concept’s name suggests, it primarily emphasizes employee opinions since their excitement and support are essential to the success of organizational reform (Hamdo,2021). Employees aren’t likely to be receptive to management’s explanation of the value of the electric car addition unless they are first convinced of the necessity of the change. Hence, if Elon Musk, CEO of Tesla Motors, uses this strategy, he can convince his staff of the significance of developing electric innovations. The model also alerts personnel to impending shifts in the status quo. The company offers training to prepare its staff for their roles in bringing about change (Hamdo,2021). Consequently, this strategy would help address the problem of slow change implementation due to insufficient employee buy-in.
Workers’ lack of enthusiasm for introducing electric vehicles is definitely linked to a lack of information about the innovation. To avoid stumbling blocks in the development of electric automobiles due to inefficient communication, the CEO of Tesla Motors should consider providing his employees with the communication tools they need. Without effective communication channels, managing organizational transformation would be difficult. Effective transformational vision can only be expressed through the use of proper language. Good change management is characterized by effectively communicating the change’s necessity and motivating staff to take immediate action. Businesses that do not share their data miss opportunities to improve their operations. Change management requires two-way communication. Commitment, precision, and dependability are necessary. Two-way communication strategies such as surveys, focus groups, and informal feedback collection may ensure employee buy-in. When leadership is inclusive and welcoming, everyone benefits. When employees perceive their efforts are acknowledged, they are more likely to embrace change and achieve its completion. Leaders can prevent change-related problems by identifying potential bottlenecks through two-way communication. Early identification of the causes of resistance to change may aid in developing countermeasures.
Moreover, Tesla motors may explore implementing Lewin’s Change Management Model. Fear, insecurity, and a need for comfort cause most employees to favor maintaining the status quo. Tesla motor’s administration will begin with the defrosting phase using this model (Ratana et al.,2020). The unfreezing phase is vital because it entails increasing the employees’ preparedness and willingness to change by promoting an awareness of the need to transition from the current status quo to a transformed zone. The Tesla leadership will raise employees’ awareness of the need for change and increase their incentive to accept the new ways of working for improved outcomes. The second phase is the transition phase, which involves implementing the new changes and requires planning. The third stage is the freezing phase, which will occur in our instance following introducing electric cars (Ratana et al.,2020). During this time, people make the transition from change to stability. In the third step, refreezing, people adopt different habits or ways of thinking and form new social bonds. You should use praise, admiration, and positive reinforcement if you want your staff to adopt new work habits or behaviors. Moreover, enabling regulations or frameworks may be advantageous.
Future trends
Tesla Motors is anticipated to maintain its industry leadership by remaining adaptable in the face of ever-changing consumer preferences and technological realities. Soon, “drivers” of autonomous vehicles will be able to multitask by talking on the phone, typing documents, reading emails, watching movies, or listening to music. Applications that assist with navigation and provide the most recent traffic data are popular in many regions worldwide. In addition, towns deploy contemporary technology to monitor drivers and verify that speed limits are adhered to. The concept of a “mobility ecosystem” originated due to the increased usage of connected automobiles to optimize network-level efficiencies and streamline communication between service providers and their clients. Moreover, green vehicles are easily compatible with the new sharing and on-demand economy (e.g., many taxi services worldwide already use electric cars exclusively). In addition, there is a growing awareness of the significance of preserving the natural world, which stimulates the market for environmentally friendly automobiles.
The sustainability and the triple bottom line analysis would be essential techniques that would reflect Tesla plans for change. As a result of anticipated future trends, the company has good opportunities to explore and leverage its energy storage solutions that would aid in promoting a sustainable environment through reducing carbon emission and contribute towards sustainable future.
In conclusion, the purpose of change management is to facilitate employees’ transition to new environments. Going from one state to another is what is meant by a change. There are two main types of implementation challenges: hard challenges and soft challenges. Poor planning by upper management is an example of a hard challenge, whereas employee or process resistance to change is an example of a soft challenge. Lewin’s Change Management Model and the ADKAR are two instruments that can assist firms in resolving problems brought on by organizational change.
References
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