Question

What are the organizational structures and key management links to Tesla?

Answer 1

Tesla has a functional or U-form organizational structure. The U-formstructure uses organizational function as the main defining factor. For example, the company has a structural group of employees for engineering, and another for sales and service. Some structural characteristics of other types of corporate structure are also present in Tesla, although at a less significant extent. In this company analysis case, grouping based on business function stands as the most significant feature. The following characteristics are significant in Tesla’s organizational structure:

1. Function-based hierarchy is the primary characteristic
2. Centralization
3. Divisions

Function-Based Hierarchy.

The most significant characteristic of Tesla’s corporate structure is the function-based hierarchy in its global organization. This hierarchy involves functional teams or offices that oversee domestic and international operations. This feature is typically observed in traditional corporate structures, where companies aim to maintain strict managerial control of their operations. In this business analysis case of Tesla’s organizational structure, the following functional offices direct and represent the global hierarchy:

1. Chairman & Chief Executive Officer
2. Finance
3. Technology
4. Global Sales and Service
5. Engineering
6. Legal

Centralization.

Tesla uses centralization in its corporate structure. The emphasis of centralization is managerial control on the entire organization through decisions that a central group or team generates. In this case, the heads of the offices of the global hierarchy form the corporation’s central headquarters, which directly control all operations. In this organizational structure, Tesla minimally supports the autonomy of its regional or overseas offices. The company’s headquarters make most of the decisions for overseas operations.

Divisions.

This characteristic of the corporate structure focuses on the extent of geographical or other types of divisions in Tesla Inc.’s automotive business. These divisions are used to implement different strategies and marketing campaigns, and to organize financial records and reports. The company’s main divisions in its corporate structure are

• Automotive
• Energy Generation and Storage.

These divisions are less significant compared to the function-based hierarchy of the organization. Also, Tesla’s organizational structure has the following geographical divisions mainly used for financial reporting:

• United States,
• China,
• Norway