14

NAME: SONU KANKARIYA

STUDENT ID: ST20166723
MODULE NAME: PEOPLE AND ORGANISATIONS
MODULE CODE: MBA7000
TOPIC OF ASSIGNMENT: ORGANISATIONAL STRUCTURE & CULTURE
OF TWO COMPANIES, ITS IMPACTS
ON EMPLOYEES
AND LEADERS AND PESTEL ANALYSIS.

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TABLE OF CONTENTS
 TESLA

 INTRODUCTION
3
 ORGANISATIONAL STRUCTURE
3,4,5
 ORGANISATIONAL CULTURE
5,6

 WALMART

 INTRODUCTION
6,7
 ORGANISATIONAL STRUCTURE
7,8
 ORGANISATIONAL CULTURE
8,9

 IMPACT OF ORGANISATIONAL STRUCTURES AND CULTURES ON ITS

EMPLOYEES, LEADERS
9,10

 PESTEL ANALYSIS OF TESLA

10,11

 BIBLOGRAPHY
12,13

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TESLA

INTRODUCTION:

Tesla, Inc. an American automotive and energy based company. A company

that manufactures, designs and sells electric automobiles, battery and solar

panels. Tesla motors was founded in 2003 by Marc Tarpenning and Martin

Eberhard in California, USA. Elon Musk joined and become the co-founder of the

company in the early series A funding (primary funding). (Gregersen and

Schreiber, 2019) Tesla is not just unique in its business idea, it also extends to

its organizational structure. Tesla’s organizational structure is also one of the

key elements that supports the business continuous growth.

ORGANISATIONAL STRUCTURE:

Tesla motors is a unique company and so is its organizational structure. Tesla

motors, does not have any known management structure unlike many

companies of its size. There is no public list of senior leaders nor any particular

organizational chart. “Musk has long expressed contempt for rigid reporting

lines. The company he has shaped in his image continues to prioritize

nimbleness and flexibility over a clear chain of command.” (Hull and Pogkas,

2019) Somehow, after searching for public refernces and interviewing the

current and former employees of the organisation. A list of key executives was

made up (shown below). By which we can categorise the structure as divisional /

departmentalisation.

Elon Musk is Tesla’s CEO and largest shareholder

Tesla’s major leaders

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Zach Kirkhorn Jerome Guillen JB
Straubel
CFO President, Automotive
CTO

Chief designer
Franz von Holzhausen

Chief Designer

And other 24 senior executives scattered around the company

ENERGY ENGINEERING HR & SAFETY LEGAL & SALES SOFTWARE
& FINANCE
PRODUCTION
Drew Bert Kevin Jonathan Tom Zhu Nagesh
Baglino Bruggeman Kassekert Chang Saldi
VP, APAC
VP,Technolo VP, VP, People General & CIO
gy Production, & Places Counsel Gigafacto
Fremont ry 3
Plant
Sanjay Shah Peter Laurie Ron Klein Jan David Lau
Hochholdinger Shelby Oehmicke
SVP, Energy VP, VP,
Operations VP, Production VP, Treasurer VP, Tesla Software
Environme Europe Engineeri
ntal, Health ng
& Safety

Chris Lister Steve Felicia Adam Andrej

MacManus Mayo Laponis Karpathy
VP,
Gigafactory VP, Interior VP, HR, VP, Senior
Operations & Exterior Diversity & Finance Director,
Engineering Inclusion Worldwid Artificial
e Intelligenc
e
Charles
Kuehmann
VP, Materials
Engineering

Dr. Michael
Schwekutsch

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VP, Drive
Systems
Sascha Zahnd

VP, Global
Supply Chain

Karn
Budhiraj

VP, Global
Supply
Management
Roshan
Thomas

VP, Global
Supply Chain

Stuart
Bowers

VP,
Engineering

As we can see in the above table, Tesla motors has many divisions such as energy,
engineering and
production, HR & safety, software, legal & finance and sales. As shown in the table,
there are several VP’s

for each division except for one i.e. software which has one VP and artificial
intelligence director leading it.

Tesla benefits a lot from this type of organizational structure from many other
companies of the same or

similar size. As this type of structure has less bureaucracy than others and it also
helps in increase in speed

of communication between the different levels of management which leads to fast

decision making process

and flexibility in the business which turns out to be profitable to business.

Tesla motors is going through reorganization and making considerable changes which
are vital for the

success of the organization. CEO Elon musk sent a memo to the employees stating
“To ensure that

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Tesla is well prepared for the future; we have been undertaking a thorough
reorganization of our company.

As part of the reorg, we are flattening the management structure to improve

communication, combining

functions where sensible and trimming activities that are not vital to the success of
our mission.” (korosec, 2019)

Organisational culture:

Organisation culture can be defined as set of values, beliefs and assumptions that
govern an organisation

(Alvesson and Sveningsson, 2015).

These values have a wide influence on the organisation-

related people. An organization's structure has an effect on an organization's culture.
Tesla’s mission is “to

accelerate the world's transition to sustainable energy.” The cultural values of Tesla
employees is to move

fast, do the impossible and constantly innovate. The routines and rituals of the
employees is to think like

owners and reason from first principles. Thinking like owner’s supports the companies
mission and vision

statement by encouraging them to take accountability and responsibility of their work.

And reason from first

principle focus on acknowledging root factors for understanding and solving the real
world problems. There

is nothing as of control system in tesla, as Elon musk is more focused flattened

organisational structure. The

culture of Tesla is fast-paced, energetic and innovative. Tesla is based on innovative

problem-solving

culture, where employees are asked to find out the problems within or outside the
organisation and asked to

find a solution. Tesla’s culture also allows the employees to communicate to anyone
without anyone’s

permission. “Anyone at Tesla can and should email/talk to anyone else according to
what they think is the

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fastest way to solve a problem for the benefit of the whole company. You can talk to
your manager's

manager without his permission, you can talk directly to a VP in another dept., you
can talk to me, you can

talk to anyone without anyone else's permission.” (Bariso, 2019) Tesla works on the
safety of the employees

working at the factory, production line. Safety of the employees at the Fremont
factory is already very less

than the NUMMI who operated the factory till 2010. (Shelby, 2019 )

(Shelby, 2019).

WALMART

INTRODUCTION:

Walmart is a multinational chain of discount departmental retail stores, supermarkets

and grocery stores.

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Walmart was opened as a small discount retail store in Rogers, Ask. Now it is
expanded internationally in 27

countries with 11,200 stores and runs e-commerce websites in 10 countries. Walmart
creates job

opportunities for 2.2 million people approx. globally and 1.5 million alone in USA
(Corporate - US, 2019).

Walmart has good organizational structure and culture for these employees.

ORGANISATIONAL STRUCTURE:

Due to the large size of the company, Walmart's organisational structure is highly hier
archical. This type of

organisational structure for Walmart helps in ensuring the effective management of

the employees. This

feature relates to the vertical lines of authority and command in the organisation. For
example, every

employee has a superior, except for the CEO of the company. The hierarchical
structure of Walmart is

shown below in the figure:

1.HIERARCHICAL STRUCTURE OF WALMART

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(Hierarchy Structure,
2019)

Walmart also has function-based organizational structure for a group of employees,

fulfilling certain

functions. For example, Walmart has a department for functioning of marketing,

information technology,

human resource management and many more. The key feature behind hierarchical
functional is ability of the

manager to easily influence the workings in the organization. Like, any new policy is
made at the

headquarters of the company then it is passed on to regional managers and its easily
communicated to the

store managers.

A glimpse of how the hierarchical structure works in Walmart:

 Above store level management:

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Senior vice president: He is at the peak position. He is responsible for the
functions at store.everyone has to communicate to him directly or through a
chain of employees.

Regional VP: He is responsible for all the operations in his particular region.

 In-store managers:

Managers: He is one the highest position in store management duties.

Co-managers: He is a counter-part to the manager position.

Assistant manager: He is inferior to co-managers and manager and to provide

basic assistance to them.

 In-store hourly workers:

The cashier: He is supposed to check with cash counter and fulfill billing
responsibilities.

Department manager: He is responsible for managing the particular

department.

Customer support: He is to check with the customer related issues that may
arise or are being faced.
(Hierarchy Structure, 2019)

ORGANIZATIONAL CULTURE:

Organizational culture depends on the shared values, beliefs and assumptions. The
values carried by

the employees are – service to the customers, respect for individual, strive for
excellence and act

with integrity. Each value has its own set of behaviors which when practiced

by employees help in business results and create a culture. For example, the service
to customers is

associated with customer first, frontline focused & innovative and agile. Respect for
individual says

listen, lead by example and inclusive. Strive for excellence is about high performance,
accountable

and strategic. Act with integrity means being honest, fair and courageous. (Corporate
- US, 2019)

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The culture control system is centrally controlled on the basis of its structure. Culture
is the basis of

everything they do at Walmart. It is how they deliver good customer service and
improve

performance to achieve their common purpose i.e. saving customers money so that
they can live

better. The artifacts of Walmart are Sam’s Walton’s Cap, Photo of Sam, Rosalind
Brewer; “Game

Changer”, Valeda Snyder, Save money. Live better. and Walmart organic produce.
(Corporate - US, 2019)

Walmart encourages its employees by promoting them to next level. Every year
160,000 employees

are promoted, 2.7 billion was invested by Walmart in wages. (Careers.walmart.com,

2019)

Impact of Organizational Structure and Culture on Behaviour of

Leaders, Managers and Employees:
An appropriate combination of organisational culture and organisational structure
is helpful in
determining the behavioural pattern of an organization's members (Tong, Tak and
Wong, 2015). It says
about the behaviours of leaders, managers and employees. The culture of tesla is
based on its mission and
values. It has provided the employees with the sufficient values which lead to
constant improvement in the
company’s success. It has invested a lot in the safety of the employees and training
which help them a lot in
working free and constantly without worrying much about factory incidents. The lack
of bureaucracy also
helps them a lot in free conversation which helps in solving more efficiently and fastly.
For example,
“workers use a zero-gravity ergonomic chair to install parts in the Model 3. Recently,
while watching it in
action, an employee had the idea to add a safety device to the chair to ensure no one
could walk behind it
and become injured while in use.” (Shelby, 2019) The strategy of Elon musk not
having a table and moving

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his desk wherever he finds the business needs (Jackson, 2019) helps him in getting
into contact with the
employees and serve better to them which results in the exclusive performance of the
organisation. Thus by
all these we can say that the culture of the organisation has a positive impact on the
employees which is also
a key reason for the success.
However, in the case of Walmart, the culture is base of everything they do at
Walmart. At Walmart
everyone works together. Inclusion is the key for the growth of Walmart’s business.
(Careers.walmart.com,
2019)Walmart’s culture is a high performance one which out lives the values It has a
given some adequate
values to its employees each of it has some behaviours. Walmart’s culture of working
together has a major
impact on its business where all the employees are asked to work together. “That’s
the essence of our
mission — to create an inclusive culture where all associates work together to deliver
on our shared purpose
(Careers.walmart.com, 2019). On a daily basis, the top official and managers go to the
stores, which let them
gain information about the organization’s current scenario. The managers are aware
about the ground level
works being done in the stores; this helps them in taking better decisions for the
organization. ( Knight,
2014) With all of these values practised and roles managed by the leaders the
company is growing
constantly towards success.

PESTLE ANALYSIS

PESTEL analysis is a strategic tool used to examine/analyze the macro environment

of the organization.
PESTEL stands for- Political, economical, social, technological, environmental, legal.
“PESTEL analysis
has two basic functions for a company. The first is that it allows identification of the
environment within

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which the company operates. The second basic function is that it provides data and
information that will
enable the company to predict situations and circumstances that it might encounter in
future.” (Yüksel, 2012)
This PESTEL analysis of TESLA MOTORS will let us know about the macro
environmental
affects the organization.
POLITICAL ECONOMICAL
 Government incentives for  Dip in battery costs.
electric automobiles.  Dip in renewable costs.
 Advanced global trade  Issues with economic stability.
agreements  Inflation rates.
 Political stability in the  Interest rates.
majority of markets.  Labor cost and productivity in
 Legal framework for contract economy.
enforcement.  Changes in foreign currency
exchange rates.

SOCIO-CULTURAL TECHNOLOGICAL
 Improving popularity of low  Technological developments by
carbon lifestyles. its competitors and Tesla.
 Improving preferences of  Improvement of automation in
renewable energy. business.
 Improving wealth distribution  Technological impact on the
in markets. products offered by Tesla.
 Culture (social convention,  Impact of technology on cost
gender roles etc.) structure in auto
manufacturers.

LEGAL ENVIRONMENTAL
 Company rights.  Climate change/ weather.
 Patent laws.  Increase of concern in harmful
 Employment law. gases due to automobiles.
 Health and safety law.  Laws regulating environment
 Data protection. pollution.
 Energy consumption  Rising standards of waste
regulations. disposal.
 Dealership sales regulations.

POLITICAL:
Political factors identifies the governmental decisions impact on the macro
environment of the
business. Tesla can strengthen financial position from the incentives offered by the
government. “The

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federal government and a number of states offer financial incentives, including tax
credits, for lowering the
up-front costs of plug-in electric vehicles.” “This tax credit will be available until
200,000 qualified EVs
have been sold in the United States by each manufacturer, at which point the credit
begins to phase out for
that manufacturer”. (Energy.gov, 2019) As USA now has free trade agreements it opens an
opportunity for tesla
to expand internationally. Trade ministers from 12 nations completed the negotiations
for Trans-Pacific
Partnership. This agreement will Reduce the cost of exporting . (Tradeology, the ITA Blog,
2019) Political stability

also plays a key role in a political factor. For example, Tesla uses ample of cobalt as a
raw Material.
Democratic republic of Congo produces 60% of world’s cobalt . (Barrera, 2019) “Amnesty
International’s research has shown that cobalt mined by children and adults in
extremely hazardous
conditions could be entering the supply chains of some of the world’s largest car
makers. (Amnesty.org, 2019)

ECONOMICAL:
In this part, we would deal with the economic factors affecting the macro
environment. Tesla benefits from

its low battery costs compared to its competitors. “A report by the Financial Times, UBS
has conducted an

analysis of battery production costs for various manufacturers and concluded that Tesla enjoys a
20% cost

advantage over its closest competitor.” (Hanley, 2019) So, this acts an opportunity for the
business.

Changes in foreign exchange rates can be said as one of the most interesting factors. Tesla being
operating in

many countries and having more of international scope there would be foreign currency
transactions too. For

example, according to Tesla annual reports the company had recorded loss in foreign currency
exchange rates of
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41.5 million and 18.5 million in 2018 and 2016 respectively whereas it also recorded a gain of 62.6
million in

2017. As seen above there can be profit or loss. So, the foreign currency exchange rates are
considered to be one

of the most interesting factors. (Sec.gov, 2019)

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