Question

Tesla's Organizational behavior issues or problem the organization is facing..

four paragrpahs

Answer 1

Tesla, Inc. (formerly Tesla Motors, Inc.) has an organizational structure that supports continuous business growth. A company’s organizational or corporate structure is the design and system that defines the patterns of interactions among the company’s components. In this business analysis case of Tesla, the organizational structure takes a traditional form, considering the company’s managerial focus and control, along with limited operational expansion in the global market.

Tesla must grow its network of retail and service centers, which now encompasses fewer than 100 locations in 24 states with a heavy concentration in California, New York, Washington-Baltimore and Florida.

Many states, including Michigan, are resisting Tesla's effort to sell directly to consumers without involving franchised dealers. Anyone who lives in flyover country may have to drive for hours unless they live in major metropolitan areas with a Tesla store, or gallery as the company calls it.

That model may work well for ultra-luxury products, but that's not what the Model 3 will be. Early adopters and environmentally conscious consumers will drive to the largest city to buy, but will they have to go that far for maintenance?“It’s a separate skill set," Gordon said. "Not only do you need a lot of money but you’ve got to hire a lot of people and you can’t remotely control it from California."Compromising on state franchise laws could jeopardize Tesla's control over the retail setting, not to mention pricing.

Tesla will need to find skilled manufacturing workers in the Bay Area, an area known more for its wealth of software code writers and electrical engineers than manufacturing. California is an expensive place to make anything, with or without union representation.

Beyond labor costs, Tesla might have to recruit in other regions for the industrial engineering talent to boost production by a factor of six or seven. "They’re going to need to hire experts in scheduling, quality, training and supplier development," Baron said. "It will take them some time. Those types of experts don’t come cheap."As Daimler learned through its failed acquisition of Chrysler, building luxury vehicles with the latest technology is not the same as engineering and maintaining quality in mainstream vehicles selling for half the price.

A disadvantage of Tesla’s corporate structure is the rigidity that limits rapid adjustment in the organization. For example, global centralization is a structural characteristic that limits the autonomous ability of overseas offices to readily respond to issues they experience in their respective regional markets. To address this disadvantage, it is recommended that Tesla Inc. reform its organizational structure to increase the level of autonomy of overseas offices. A corporate structure with a higher degree of decentralization tends to be more effective in creating competitiveness against local firms in overseas markets.