Question

What are Tesla's organization's environments?

Answer 1

Tesla, Inc. is having an organizational environment that supports continuous business growth. A company’s organizational or corporate environment is the design and system that defines the patterns of interactions among the company’s components.

The following characteristics are significant in Tesla’s organizational environment:

1. Function-based hierarchy
2. Centralization
3. Divisions

• Function-Based Hierarchy

The most important characteristic of Tesla’s corporate structure or environment 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 environment, the following functional offices direct and represent the global hierarchy:

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

• Centralization.

Tesla, Inc. uses centralization in its corporate structure. The importance of centralization is managerial control on the entire organization through decisions that a central group or team generates. Here,  decision making ability or power is not distributed among all the employees.

• Divisions.

This characteristic of the corporate structure mainly focuses on the degree 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 organizational divisions in its corporate structure are  both Automotive and Energy Generation and Storage.