Introduction
Firms strive to gain a competitive advantage via numerous ways that distinguish them from others. Emerging technologies enable businesses to acquire significant market shares rapidly. This paper will discuss innovation management at Tesla, the value of its technologies, and how a human-centered approach helps the company with its goals.
Company Background
Tesla, Inc., is a famous multinational company that specializes in sustainable technologies. Its products include electric cars and renewable energy sources, and all parts are interlinked through a unified vision of Tesla’s leader (About Tesla, no date). Tesla’s position in the market reveals the magnitude of its success.
With approximately 100,000 employees, this publicly traded firm is a leader in innovative technologies and has rapidly expanded in recent years (Klender, 2022). Tesla’s workforce is the key to solving numerous issues in the development and marketing of its products. Its organizational structure is unique due to having no strict hierarchical chart, yet the firm is divided into divisions that exhibit a great amount of flexibility (Dudovskiy, 2021).
While this approach may appear complicated or inefficient, Tesla shows great adaptability to the shifting market environment. There are six divisions that are interconnected, and all of them answer to CEO Elon Musk, who is notorious for his problems with delegating power (Dudovskiy, 2021). This factor makes it apparent that the firm rightfully takes its place among the top automotive and energy device manufacturers.
Tesla had to resolve critical issues that led to its renown as a leader in innovative technologies. As a result, Tesla’s organizational culture revolves around seeking solutions that will provide the largest possible impact on society (About Tesla, no date). One of the crucial challenges that Tesla has to account for constantly is the changes in technologies that other businesses achieve. For example, architectural inventions and modular inventions require different analytical approaches to comprehend their structure and put varying degrees of pressure on Tesla’s R&D teams, as specialists must be selected according to each case (Habib et al., 2020). The firm has to connect its employees with its vision to ensure a feasible path forward.
The Way Technology Drives Value and Change in the Tesla Organization
Technology-driven innovation is apparent in this company’s case since it sets new directions in the electric vehicles (EV) industry with each new car and truck line it releases. The firm provides unique products, yet it does not forget about optimizing its manufacturing processes. Tesla also seeks innovative ways to manage its supply chains and factories and increase the cost-efficiency of manufacturing processes (Manufacturing, no date). The demand for its cars and solar panels serves as a definitive feature of generations, putting significant pressure on the firm.
With the final goal of leading the world toward an environmentally conscious existence, Tesla has many challenges ahead. EVs and other similar technologies are subject to policies that define the effectiveness of gas emission reduction and prevention (Wu et al., 2022). This factor requires businesses to explore and align all elements in their manufacturing with the core idea of sustainability.
Rhodes and Wield outlined a set of concepts that promote green innovation and help companies achieve sustainability of their products and processes through interconnected factors, including clear raw resources and minimized energy consumption and pollution (Hu, Huang, and Zhong, 2021). In the example of Tesla, it is apparent that linking the entirety of its operations under a single goal is the key to this approach. The firm gradually transfers its accomplishments in engineering theories into automobiles people are willing to purchase (Lobo, 2020).
While the implication of this theoretical framework is apparent, an effort to create an environmentally friendly, the firm requires solid leadership that simultaneously promotes autonomous decisions and a shared vision to add actual value to a firm. A single perspective unifies Tesla’s resources, design, software, marketing, and production management (Pereira, 2020). Such a framework gives Tesla a boost in both the flexibility and reliability of its functions.
Tesla is perceived as technology-driven through its market-shaping releases that define the future of EVs. Tesla applies both mass production of the fourth wave and IT technologies of the fifth wave in its strive to create environmentally friendly cars (Dodgson, Gann, and Salter, 2008). It incorporates a significant number of new features, such as autopilot, with the aim of increasing its production volumes.
The company is built on the vision of a future that is now shared among employees, stakeholders, and customers alike. Tesla’s exceptional strategy to communicate its worth is perceivable in clients’ experience during car presentations and purchases (Kaemingk, 2018). Without making contracts with traditional car dealers, Tesla remains in touch with its customer base to receive immediate feedback in case of probable mishaps.
The firm fully utilizes the benefits of the fifth wave of innovation through the application of various technological advancements in its cars. For example, Tesla’s approach to marketing focuses on the use of online advertisements and an e-commerce website, as 70% of its sales occur online (Pathak et al., 2022). Moreover, it gains additional benefits from IT advancements by adding cutting-edge technologies to its products. Artificial intelligence is applied in both the manufacturing and final products of Tesla (Ajitha & Nagra, 2021).
At the same time, Tesla reimagined Ford’s mass-production philosophy with a shift toward sustainability. However, unlike the previous mass-production processes, Tesla uses the benefit of the fourth wave to increase its capability to recycle and recover batteries for its EVs (Naor, 2022). It is apparent that Tesla seeks to utilize all the previous technological advancements for its own benefit.
However, the need for development remains a primary driving factor for this business. Tesla’s disruptive behavior in the market and the growing percentage of EVs on roads indicate many prospects for further innovations (Zhou, 2022). Musk’s approach to innovation management ensures that Tesla will continue to surprise the public with EVs that define modern standards of quality. The company strives to meet consumers’ expectations of its products’ designs, capabilities, and environmental impact to the best of its abilities (Rimmer, 2018). The initial reveals of various cars and their characteristics provide an apparent reaction from the public, which Tesla uses as a starting point for any further changes made to its vehicles and batteries.
Innovative technologies are difficult to create and require a large investment in R&D. Tesla, which recently acquired SolarCity, tried a different approach to promote breakthroughs by merging two businesses from adjacent markets into a single company (Guo, 2019). Change management for such an operation is difficult to imagine, yet Tesla, Inc. attracted new stakeholders by doubling down on its focus on green energy, which effectively allowed the firm to alleviate the increased expenditures. Tesla used this opportunity to expand its organization with a meaningful acquisition that is based on the synergy between the two businesses’ developments in renewable energy (Kenwell, 2018).
In order to gain the maximum profit from its products, Tesla strives to find new ways to apply its knowledge to innovations. As of now, EVs and solar panels are used primarily in high-income countries (Long et al., 2019). This fact implies that Tesla does not possess the technology that will enable it to fulfill its mission, as affordability remains questionable for the majority of the world’s population.
At the same time, it is crucial for Tesla to maintain the demand for its proposed value among the customer base. Fewer emissions and decreased energy consumption are the core ideas behind Tesla’s cars. With a continuous stream of releases, Tesla can dictate new trends that provide demands for its products. The EV industry is fresh and is not fully shaped yet; making such moves lies at the foundation of the institutionalization of sustainable technologies (Ekman et al., 2021). Tesla can exploit its innovations for a long period if it can follow the increasing demand.
Currently, the traditional car market is shrinking due to various factors linked with societal shifts that ensure a growing need for EVs among customers (Jetin, 2020). The firm needs to push new technologies at a steady pace to meet the demand. A new product or technology is not sufficient reason for a firm to become financially successful. While Tesla does have the required technologies for this task, it must keep the bar high to prevent its competitors from creating better options for EV drivers.
Firms in Tesla’s chosen market develop unique ways of creating opportunities that distinguish their goods to push ahead of others. The automotive industry has been reimagined by the disruptive behavior of Tesla, whose products precede customers’ needs and expectations, thus ensuring its long-term success (Chen & Perez, 2018). It is now necessary for the firm to set a defensive position in the industry and stimulate its progress. The barriers to entry into the EV market are lowered, which allows start-ups to attempt to gain a market share with the attacker’s advantage even if they are using old technologies (Thomas & Maine, 2019). Therefore, Tesla’s technological capabilities must outpace its opponents and leave enough space for counter-offensive strategies, such as reverse engineering.
Tesla’s organizational values must support this direction to dictate the highest standards of quality and guarantee that workers are willing to aim for breakthroughs in both engineering and the company’s structure. Customer needs are evolving not ahead of Tesla’s new models, giving it an additional advantage. Government support allows the organization to set industry trends that penetrate the car market deeply, attract new investors and resources, and motivate Tesla’s employees (Liu, 2021). This encouragement enables Tesla to manage change with ease, as workers perceive the necessity of new methods and processes better when a positive reaction by the public is expected.
How is the Chosen Company’s Innovation Human-centered?
While Tesla’s technologies are the value perceived by the majority, the firm’s strength comes from the skills of its workers. A formidable body of knowledge in Tesla enables it to outmaneuver even such large corporations as General Motors (Al-Hawamdeh & Chang, 2018). Its practice, which is built around breakthroughs, is the key to success. R&D is only a part of the process involved in the creation of new products, as factors such as a company’s business model, leadership style, and partnerships heavily influence the outcome (Goffin & Mitchell, 2017).
A high-tech enterprise requires a work environment that allows the right people to be teamed up immediately upon request. Valentin (2019, p. 51) writes that the very structure of Tesla’s facilities creates space that leads to “co-locating [of] development and production teams” that enables both to observe and improve each others’ performance. This unconventional approach eliminated much of the firm’s hierarchy and bureaucracy, giving employees a chance to freely share their thoughts to immediately obtain viable feedback.
Communities of practice lie at the core of innovative vision in many corporations. By creating an environment that promotes cooperation, vertical openness, and freedom to voice one’s thoughts, businesses can achieve a major increase in the occurrence of breakthroughs (Carayannis et al., 2021). Companies that operate in markets that rely on innovations as a primary advantage must consider this mode of operations.
Knowledge-based communities of practice are a strategy tool that eliminates knowledge boundaries and creates a domain of shared information that helps with the accumulation of human resources (Schwarz & Legner, 2020). Through its unique structure, Tesla shows definite signs of using this approach. Holacratic engineering management, which is apparent in Tesla’s factory environment, promotes self-efficiency and autonomy of idea development (Savage, Franz, and Wasek, 2019). Managing knowledge requires one to be able to apply skills whenever needed.
Innovation management is impossible without a strong direction that is continuously reinforced by the company’s leading personnel. It is known that Elon Musk constantly remains at the front of Tesla’s operations, keeping himself involved in employees’ work to inspire them and observe their performance (Yauney, 2018). The company benefits greatly from such an inquiring vision, as the organizational culture can be shifted toward one of its aspects when necessary, such as during crises or change implementations. The nature of leadership evolves to incorporate the need to create learning environments that boost a company’s performance through the encouragement of personal intellectual growth (Gürlek & Çemberci, 2020). Tesla shows great potential in applying this approach, as its leaders possess a suitable mindset for such a task.
Tesla’s overall strategic direction indicates the value the firm puts into knowledge. Organizational change is directed from above and often contains bold moves that would be impossible without solid teamwork from the company’s employees (Schilling, 2020). In the example of Tesla’s acquisition of SolarCity, it is possible to perceive this notion. Battery technologies are crucial for both EVs and solar panels, which makes the expertise of both firms’ specialists interested in teamwork (Zogopoulos, 2020). The possibility of capturing an additional market is an added bonus, yet the value of this deal lies in information access gained by Tesla.
However, it is vital not only to find a suitable piece of technology that may boost a company’s productivity but also to incorporate it into the organization seamlessly and without conflicts (Preece, 2018). After all, the capability to develop new green energy options is the mission of Tesla, Inc. The organization’s ecosystem relies on engineering studies that require constant input from fresh perspectives (Lang, Reber, and Aldori, 2021). Therefore, the human-centered approach to innovation is apparent in all of Tesla’s actions throughout its history.
Having a clear direction toward its vision of humanity’s future, Tesla strives to upgrade the technologies it created. Collaboration can lead to teams’ ambidexterity in both explorative and exploitative tasks through mixed perceptions of production processes and discussions of ideas between various specialists regarding a single subject (Han, Bai, and Peng, 2021; Newell et al., 2009). Managing the available body of information remains a vital objective for Tesla.
The creation of communities of practice in Tesla is a critical part of its research and knowledge accumulation processes. After acquiring other firms operating in the renewable energy industry, Tesla has achieved excellent coverage of engineering practices. This method enables the company to share information and increase the overall productivity of its employees through teamwork and easier generation of new ideas (Wenger-Trayner & Wenger-Trayner, 2015). This strategy directs the development of future cars and solar panels into a universally understood path that aligns all functions within Tesla with the final goals.
While there have been miscommunications between Tesla and its stakeholders, the firm keeps attracting new investors and specialists. In a recent crisis of Tesla’s autopilot between the involved sides established in critical times of performance, it became clear that organizational learning is a priority for the firm, and direct communication in critical times is established between involved sides (Renadia, 2022). In case of any deficiency, Tesla’s leader is ready to take responsibility and assist the communications division with resolving the growing concerns of the public.
Routine evaluations of employees can be triggered by stakeholders’ requests in order to assure them that the products are provided at the highest possible quality (Renadia, 2022). Such dedication is essential for promoting innovation, as guaranteeing customers the safety and efficiency of the firm’s products is essential for Tesla’s public image. Due to the vertical integration of its services, Tesla uses an end-to-end model that connects it to customers with ease (Shao, Wang, and Yang, 2021).
Moreover, the firm keeps its connection active at all times. Tesla users continue to receive updates on their cars and devices, which encourages brand loyalty and gives the organization more feedback for future improvements (Kim, 2020). Communication in all forms is a critical component of Tesla’s success.
Tesla’s intellectual resources also require constant upkeep to remain applicable in future innovations. While Lewin’s model for managing change may be appropriate for the company, Tesla must be able to transform constantly. This notion implies the need to define ambiguities by compiling teams that are viable in producing solutions (Newell et al., 2009; Teece, 2018). The firm has to apply new ideas throughout its services to defend its position. Khan (2021, p. 7) states that “Elon Musk has incorporated […] intelligence leadership” in his management style, which indicates the company’s capability to withstand challenges in R&D. It is apparent that Tesla is competent in its industry, which the company shows through the proper and timely distribution of its workforce on different projects. Tesla keeps its current services running efficiently without affecting the development of new products.
Breakthrough is not driven solely by Musk and his teams’ pursuit of sustainability. It is also essential to understand the nature of innovation in order to link it with employees who work on it and customers who will interact with a company later. People behind inventions are expected to bring much more to their client base, which makes the idea-generation process an essential part of large companies’ work culture (Goffin & Mitchell, 2017). Stakeholders in this business are not just the investors and employees. Environmental issues are apparent in the modern world, and governments continuously update their policies to prevent the damage humankind does to the planet (Wang, Tang, and Pan, 2019). This process puts pressure on Tesla’s R&D division, which must construct products that fit into these shifting standards.
Possible Solutions for Tesla’s Challenges
The process of innovation is complex and linked with numerous obstacles, which include both human- and technology-driven changes. First of all, innovations heavily rely on the available instruments for their creation, which Tesla has all the power to acquire or already possess. Breakthroughs depend not only on the exploration of new technologies but also on the exploitation of existing knowledge (Ramachandran, Lengnick-Hall, and Badrinarayanan, 2019). Therefore, Tesla must continuously revisit the methods and resources it utilizes to find new ways to apply them in practice with greater efficiency.
Human-centered innovation challenges can be alleviated by supporting workforce initiatives and aligning employees’ vision with the company’s standards to the maximum. The right business environment must be prepared for any challenge through quick access to information and solution applications (Trott, 2021). The error in Tesla’s autopilot discussed above indicates the existence of deficiencies in the system that must be eliminated by reorganizing data-sharing methods. A principle of zero distance between clients and Tesla can prevent gaps in the expectations of the involved parties (Ruimin, 2019).
At the same time, it remains necessary for Tesla to keep its employees ready for any challenge and in a positive state of mind to preserve their creativity. Such a trait can be promoted through a more open-minded leadership approach that encourages original ideas to be voiced without concern for the possibility of rejection (Stathakopoulos et al., 2019). Before evaluating propositions, it is vital to gather them from a diverse crowd that possesses different specializations.
Feedback is also a critical source for Tesla to gain insight into its production. Lean manufacturing is already applied in Tesla’s facilities, yet it is possible to optimize its processes by encouraging lower cadres to voice their concerns since technicians who operate machines can highlight seemingly imperceptible problems (Helmold, 2020). The current structure of Tesla is stable and functions as intended, yet there are spots in its framework that can be upgraded for future benefits.
Furthermore, Tesla can incentivize governments across the globe to adopt sustainable standards of transportation to ensure that it has more space for expansion. Wang, Tang, and Pan (2019, p. 598) reveal that “the environmental, petroleum-saving, and economic benefits related to electric vehicles greatly exceed the costs of else potential customer bases can increase their acceptance of new laws restricting traditional cars that promote sustainable options instead vehicle incentives.” Conveying this information to potential customer bases can enhance their willingness to embrace new laws that limit traditional cars in favor of sustainable alternatives.
Conclusion
In conclusion, Tesla’s position in the market heavily depends on its ability to direct the creativity of its employees toward a common goal. Innovation management is a challenging set of strategies that link workers’ abilities with a company’s targets in a concise and clear manner. New incentives and directions toward sustainability allow the firm to continuously expand the EV industry while making traditional gasoline-powered cars obsolete. Tesla is reliant on both IT and mass manufacturing, as its facilities are highly sophisticated and exhibit great interconnectedness of processes.
Moreover, the firm successfully capitalizes on the link between two of its areas of development, with each one boosting the production of the other. In addition to technological processes, Tesla has a unique work environment that supports this path with great efficiency. Its teams share their knowledge to create a collective database of information necessary to push innovations in EV and renewable energy at a steady pace. Moreover, human capital is adequately valued within the organization, and the lack of hierarchical boundaries makes teamwork occur naturally.
There are several challenges that remain critical for the company, as the top position in the industry comes with high expectations of its performance. Tesla has to keep its vehicle and energy source lines fresh so that customers and stakeholders remain loyal to its brand. This goal can be achieved with a continuous expansion of Tesla’s employees’ knowledge base, R&D funding, and incentivizing, partnering with governments and other firms, and seeking new approaches to managing change in the organization.
Elon Musk’s vision of humankind’s future provides a solid starting point for numerous projects that can revolutionize both renewable energy and car industries. As sustainability is paramount for humanity, the number of requests for these products is expected to continue rising; the problem that Tesla must deal with is providing a steady supply. Tesla needs to keep its place as the largest electric vehicle manufacturer by making a continuous effort to optimize and improve its current designs, both technical and visual.
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