Organizational behavior and job stress at Tesla

Strategic Management
Introduction/Background of the Problem
The study of organizational behavior is based on assessing the way people interact in groups within an organization. It focuses on identifying ways to make the groups work more efficiently and cohesively as a whole. For a company with organizational behavior problems, the goal of success can be elusive. Identifying problem areas, motivating workers, and implementing effective leadership skills can all contribute to improving a company’s organizational behavior.
Tesla is a company that has been hailed for its visionary take on the auto manufacturing industry. The only car plant to be wholly based in the U.S., Tesla has made a name for itself by developing luxury class electric vehicles (EVs) and promoting sustainability. Its latest product—the Model 3—was meant to be an affordable EV for the middle class with a starting base price of $35,000; however, a number of problems have arisen for Tesla, including “production hell,” “delivery logistics hell,” and “repair hell” (Durden, 2018; Reuters, 2018) with CEO Elon Musk facing his own issues related to an inability to harness himself on social media (Wolverton, 2018). In recent years, Tesla has suffered from high turnover among top-tier executives, which indicates that something is wrong with the company’s organizational behavior as so many executives leaving suggests a lack of organizational commitment (Matousek, 2018). Tesla has lost 17 senior level employees just in 2018 alone. For a company that is hailed as visionary, it is having trouble retaining top-level talent—and that is undoubtedly related to its various problems up and down the chain of command.
The specific challenge this paper will address is the challenge of job stress at Tesla. AbuAlRub, El-Jardali, Jamal and Al-Rub (2016) have shown that job stress, job satisfaction and job turnover are all linked in organizations. The higher level of job satisfaction employees have, the less likely they are to quit. The challenge of addressing turnover, therefore, is the challenge of finding ways to mitigate job stress and improve job satisfaction for workers.
Problem Statement
Tesla faces a problem with top-level talent turnover as a result of job stress. Tesla has been in various “hellish” states as confirmed by the company’s CEO over the past year, as it attempts to meet production numbers, improve sales, and maintain its all-time high stock market price. CEO Elon Musk is well known for being a genius engineer but also for being a poor leader when it comes to running a company (Wartzman, 2015). His charismatic and innovative leadership styles have been particularly ill-suited to meeting the needs of the company’s employees during this past year as one stressful situation follows after another—from production problems to delivery problems to repair problems to image (and CEO lying about going private) problems. The job stress has been off the charts for Tesla’s workers and that has undoubtedly impacted organizational behavior in a negative way (Wong, 2017).
Literature Review
Worker’s Needs
Every stakeholder has needs and by understanding these needs, as Maslow (1943) pointed out in his hierarchy of needs model, leaders can identify pathways to motivating workers. Every employee, no matter the rank, can be impacted by intrinsic and extrinsic motivators (Gerhart & Fang, 2015): for some, it is esteem that they are looking for; others seek promotions or bonuses; still others seek support from their leader—trust and room so that they can do their jobs. Understanding these motivators can help leaders to identify needs, goal and aspirations of the people involved in inter-organizational strategies and respond accordingly.
Workers will be the individuals whose needs, goals and aspirations should be considered first and foremost by a leader (De Vries, 1998). Without them, an organization is powerless to bring its product or service to the public. Workers, however, are expected to align their own personal goals and aspirations with the organizations: this is what’s behind the idea of “buying in” to the vision and mission of the company (McCrae, Scannapieco, Leake, Potter & Menefee, 2014). To get workers to align their goals and aspirations with the company’s, it is necessary to make sure their needs are met (Gerhart & Fang, 2015). This requires leaders to become familiar with workers, to get to know them in their informal groups, to interact with them, to use surveys and interviews to understand where they are in the needs hierarchy and what inputs can be delivered to get them on board with the organization’s aims. At root, workers want to be respected and valued and an organization has to show that to its employees, whether they are working in-house or around the world; whether they are part of a supply chain or whether they are local managers. Respect and appreciation are the key factors to success in any organization (Schyns & Schilling, 2013).
Improving the Culture
Leaders have to be mindful of how stress can impact workers, and to alleviate stress they have to concentrate on creating a culture that allows them opportunities to decompress. Ways of doing this include developing an organization’s sense of organizational justice, collaboration among inter-organizational teams, communication, adaptive leadership skills, transformational leadership skills, emotional and social intelligence skills, and administrative skills. These skills will help the leader to achieve strategic leadership goals in a number of ways (Northouse, 2018).
First, organizational justice allows the leader to embrace the truth about an organization. This is essential especially when a change is required: a leader who is unable to recognize and accept the truth will be a leader who fails to implement the right change at the right time. Second, the leader must be able to facilitate collaboration. Teams must work together in every organization and no company will be effective at achieving its goals if it fails to collaborate. Third, communication skills are vital. Not only does the leader have to be able to communicate to workers, the leader has to be able to listen to workers and process the feedback that is being sent (Northouse, 2018). When communication fails, stress builds up. Communication is a two-way street that delivers healthy returns if it is taken both ways. Adaptive leadership skills are necessary overall as they promote the development of the organization through all its ups and downs, ensuring that challenges become opportunities. Transformational leadership skills help as well, as these enable the leader to facilitate the process of change when it is required. Emotional and social intelligence skills help leaders relate positively to employees and provide the support that is needed for them to be productive, and administrative skills enable the leader to manage teams effectively (Northouse, 2018).
The relationship between existing, required and future skills has to be one in which awareness of the organizational culture acts as the framework of determination. Existing skills, for instance, may only be good enough to address prior or past concerns in the organization. To address current issues, such as a political change of office or a growing need to address environmental issues among the community, new skills may be required—but this would not be known unless management had a sense of the true state of the company’s organizational culture (Northouse, 2018).
Once the culture is assessed, however, identification of the future skills that should be obtained by leaders can be accomplished. The organization’s direction and ability to achieve its goals depends upon its leaders’ ability to identify directions of the market, the global landscape, and domestic issues—from politics to social issues—that will impact stakeholders. The leader has to be able to read and prepare for shifts, understand the perspective of stakeholders so that when changes are required to be made, the leader will have the viewpoints of those who will necessarily be involved in the change process and will be able to account for these views by implementing a change strategy designed to take into consideration any possible obstacles or resistance to change that might arise (Appelbaum, Habashy, Malo & Shafiq, 2012).
Leadership skills have to be continuously developed, just like nurses must engage in lifelong learning. No society, organization or culture is static—and for that reason, no leader can afford to be either. Leaders must constantly assess themselves to see if they are acquiring new skills and whether those skills are relevant to a market, community, or organization that is changing with the times. Unless the leader can show that skills are relevant and useful for achieving a particular strategic leadership ambition, the question must be asked as to what purpose or end the skill is required (Northouse, 2018). The leader must also be able to assess the future direction of the organization and its needs and identify the skills that will be required—whether they are administrative, as in the need to measure performance of production lines, or creative, as in the need to facilitate innovation among R&D personnel. Personal assessment and feedback are tools that can help the leader clarify the relationship between current, required and future skills.
Leadership
Different leadership theories can be applied in today’s businesses. One is innovative leadership. Social and technological development has created a need for innovative leadership in today’s organizations as McEntire and Greene-Shortridge (2011) point out. No organization, industry or workplace can survive if its leaders are static and stagnant while the world and their markets are changing all around them. Leaders have to be able to respond, and the in 21st century, with so many changes happening so quickly, leaders have to be innovative and fluid in their approach to guiding others (Gliddon, 2006). The innovative leader necessarily adds value to the organization by helping the organization to maintain or obtain a “competitive edge” (Gliddon, 2006, p. 4). In maturing markets, leaders have to be innovative in their approach in order to lead effectively and help their organizations thrive in the marketplace.
Innovation is needed to solve complex problems that are unique to our time and place (Termeer & Nooteboom, 2014). Numerous researchers have shown that innovation leadership helps to uncover new methods appropriate for guiding today’s workers—methods such as the use of emotional intelligence in nursing management (Vitello-Cicciu, 2003) or the redesign of the educative experience in universities (Powell, 2012). Old methods and solutions have been found to be ineffective in the tech-driven 21st century and must be replaced by innovative thinking that embraces outside-the-box approaches to old problems (Sen & Eren, 2012). This concept can be seen in virtually every industry in recent years. A few examples will suffice to show how innovation is changing the business world.
Tesla is one of the most innovative companies in the auto manufacturing industry. It has revolutionized the concept of the automobile by developing a stylish, luxury electronic vehicle (EV) that runs on battery power instead of fuel. The idea supporting this innovation and driving it is the concept of sustainability. Consumers want to buy from companies that have sustainability at heart—companies like Eileen Fisher and Patagonia—companies that care about the environment and are willing to take innovative steps to leave zero carbon footprint in their wake. Tesla wants to provide consumers with an affordable luxury EV that does not harm the environment through the burning of fossil fuels. The innovative leadership demonstrated by Tesla’s founder and CEO Elon Musk has enabled the company to make the Fortune 500 list.
Apple is another example of a company whose leader embraced innovative leadership style. Apple revolutionized the tech industry by introducing a new concept for the mobile phone and several new takes on the personal computer. Apple took over where companies like IBM and Hewlett-Packard left off: they stopped investing in research and development and Apple, under the innovative leadership of Steve Jobs, sprang forward and developed new products and ways of interfacing, connecting and communicating with computers and others that every other company was forced to follow just to stay competitive.
In short, innovative leaders set the bar and they set the standard. They are the ones who envision something new for their industries. They are the ones who communicate the vision to stakeholders. They are the ones who use a variety of leadership styles and techniques to effect change, create a new culture, and drive innovation in their own organizations. Innovative leadership can help propel a company to the top of its industry—but once it is there, other types of leadership are likely to be needed.
Servant leadership is one such leadership style that can be of use in the business world, as Richard Branson has shown with his Virgin Group, one of the most successful organizations in the world (De Vries, 1998). A servant leader is one who recognizes that his workers have talents of their own that they can bring to the organization to help realize the vision of the leader. The servant leader will support these workers and fulfill their needs in order to be sure that they are motivated and committed to the organization. The more service to them the leader provides, the more likely they are to feel fulfilled, satisfied, and content. The more a leader presses on them and tries to micromanage them, hampering them and not allowing them to work as per their role, the more likely the worker is to be stressed and dissatisfied (De Vries, 1998).
The context and environment which supports strategic leadership development is one in which investigation and personal reflection is required. An organization that has a system in place for obtaining and delivering feedback from workers to managers and vice versa is one that will have a steady stream of data flowing that can be accessed and analyzed to help leaders make important decisions about their own trajectory as a leader and the organization’s trajectory.
Context and environment factor into strategic leadership development. As Vera and Crossan (2004) note, a change-positive environment must be part of the organizational culture for leaders to develop in a positive manner. Resistance to change can serve as an obstacle that prevents meaningful action from being implemented (Shirey, 2013).
However, opportunities to achieve strategic leadership development will come with the identification of every strategic organizational goal. Each goal will require its own unique approach and will present its own special challenges. Organizations change as they develop and the goals change too. This is true for Tesla like for all companies. A leader will have to be able to adapt and develop in order to assist the organization in achieving its objectives. Every challenge therefore serves as an opportunity for growth. After all, Kotter (2009) states that “leadership defines what the future looks like.” The leader is the pathway to organizational success because through the leader everything runs—the vision, the messages communicated up and down the ladder, the measurements of performance, and the interpretation of data, and the decisions that must be made. Leadership has to know how to delegate and how to navigate, and every step forward opens up the possibilities of myriad new steps in any one direction. A leader must be able to see where these steps will lead and how they can best be taken—and every step opens up a new opportunity for further development.
Leadership
Transformational leadership focuses on empowering workers by communicating a vision and inspiring the workers to embrace. This style of leadership is particularly useful during change management when the organization is undergoing an innovation in the workplace. Two criticisms of transformational leadership are that it lacks clarity and was created mainly for social and political environments—not for businesses. Two strengths, however, are its ability to unite people and develop relationships; and its ability to get workers to accept something new that they otherwise might resist (Northouse, 2018). This style of leadership would not be appropriate for the challenges facing Tesla because the workplace is not in need of a transformational change. Musk has already provided that with the vision and the motivation to boot. What is needed now is something else entirely—something that allows the visionary to hand over control to those who can now implement the vision in the best way possible according to their individual skills.
Another possibility is authentic leadership, which focuses on openness, transparency and trustworthiness in leadership. Authentic leaders give an example of self-awareness that workers aim to emulate. It is like both transformational and servant leadership in that a moral principle to do right as opposed to wrong underlines it. Two strengths of authentic leadership are that it promotes accountability in the workplace through a culture of transparency, and that it promotes morality. Two criticisms of it are that its moral component is ambiguously defined and that its positive psychological aspects are hard to measure (Northouse, 2018). For Tesla, authentic leadership is also not appropriate: Musk is already too transparent on Twitter. What Tesla needs is for him to back off and stop hovering over the top-tier talent and let them do their jobs.
Finally, there is servant leadership, which focuses on empowering workers by putting their needs first, front and center of the leader’s mission. The leader, in other words is there to serve the worker. It is different from transformational leadership in that the vision of the organization is not so much as communicated in words as it is demonstrated in action by serving the employee, who is then tasked with serving the client. Its strengths are that it promotes an ethical workplace and that it helps workers to ensure their needs are satisfied and that they are supported (Northouse, 2018). In other words it is exactly what Tesla needs. Tesla’s top-tier talent is suffering from too much job stress and therefore having poor job satisfaction and leaving their positions as a result because they are not permitted to effectively use their talents. Musk’s micromanaging of every facet of the organization has led to resignation after resignation. Instead of trying to control with his tyrannical vision, Musk needs to start serving those he hired to bring his vision to life.
Conclusion
Tesla is at a point where it needs to achieve some big numbers to keep investors happy and keep the narrative of innovation going strong. However, 2018 has shown that Tesla is racked with problems. Elon Musk has been able up to this point to create a narrative that has served Tesla well—but with so many top-level executives leaving, Tesla has shown that its high stress environment is not conducive to organizational commitment. Too much turnover is causing Tesla to fall behind its goals and the problem of leadership is to blame. Elon Musk is a good innovative and charismatic leader—but what is needed now is servant leadership. Musk needs to let his top level talent manage their departments and collaborate with workers instead of being micromanaged by Musk (Kolodny, 2018). Musk would better serve the company by adopting a servant leadership style that supports his workers instead of stressing them out and forcing them out. With so many top level workers going out the door just in 2018 alone, Tesla is set back. Musk may have the vision but he lacks the leadership needed now to let his people help him bring his vision to life.
Recommendations
As an innovative leader, Musk has helped to create a new market for the EV in the U.S. Before Tesla, the EV market was nothing special, but Musk has helped to make this market the next big thing for auto engineers. One of the big problems that Musk is facing, however, is that the infrastructure for EVs is lacking and the technology is not as efficient as he hoped (DeBord, 2018). Musk had promoted Tesla not just for its cars but for the fact that it was going to revolutionize the factory process using state of the art robot technology—and yet after years of failing to meet quotas, Musk finally admitted that he was relying too heavily on machines and not using people enough in the process. This is one example of where Musk failed in leadership because he relied too heavily on innovative theory and did not put enough research into the practical aspects of leading a tech-car firm. Instead of relying too much on technological solutions to create a new working environment, Musk should have been focusing on learning the actual practical steps of how to make a traditional factory and building on these by adding value to them as he did with the luxury EV. Instead, Musk really went overboard with the innovation in factory design and did not comprehend that just because one has new robots does not mean one can build a better car (DeBord, 2018). Thus, Musk has had to build a separate tent factory to help get the production line moving and the tent factory does not resemble a state of the art anything but is rather more primitive than innovative. The reality is, however, that this tent factory was a step in the right direction because for Musk his leadership needed a bit more reality and a little less creativity.
Musk has also excelled as a charismatic leader: his ability to sell an idea and vision to the public—namely, sustainability—by integrating the concept with style, luxury and affordability (the Model 3) has helped his company to become one of the most sought after companies among investors and consumers. Using charm and persuasiveness, Musk has taken Tesla from a $10 stock to a $340 stock, thanks to his deft use of Twitter, other social media, interviews, and his ability to craft a celebrity-like status for himself as a kind of real-life Tony Stark genius billionaire, who wants to save the planet and make a nice car for people at the same time.
The problem with the charismatic concept of leadership is that it depends too much on one person leading and this can cause problems especially when the leader makes mistakes through excessive zeal for his vision. Musk makes this mistake all the time: he is constantly making big promises yet failing to deliver, and this hurts both his and the company’s reputation. Musk has to be more careful about how he leads, and he should not be using social media so much now that the brand has been developed. Musk has done too much damage already—first by tweeting out that he would take the company private even though this was unfounded and then by admitting he did not have funding secured for such a deal (Wolverton, 2018). Musk then went on social media to try to save face and appeared on the Joe Rogan podcast where he openly smoked marijuana with the host. This is all disconcerting behavior for a CEO of a Fortune 500 company and does not give investors a great deal of confidence.
Musk has also gotten into legal trouble after attempting to make a joke about a rescuer of children in a cave in Asia. The cave flooded and children became trapped and Musk wanted to help save them so he designed a rescue sub that would get into the caves and get the children out. When he took his concept to the caves to be used, he was turned down and he expressed his frustration on Twitter, which was not the best place to do so because it is a public format where everyone can see what one is thinking or saying. Musk referred to the rescuer on the scene as a “pedo” and the rescuer in turn has sued Musk. When a CEO shows that he cannot control his own tongue and makes unfounded claims, it does serious damage to the brand of the company the CEO is tasked with leading.
Thus, by integrating the innovative concept of leadership with the charismatic concept of leadership, Musk has been able to give himself and his company an edge in a market that is ripe for redeveloping. However, he has gotten carried away with his own ideas and excitement at times, which has caused the stock to drop (though it has bounced back on more than one occasion). Still, Musk has found himself in hot water with the SEC for his tweets (Wolverton, 2018) and his innovative solutions have not worked out to be the best (DeBord, 2018), which suggests it may be time for Musk to try a new style or theory of leadership.
The new concept that Musk should try focusing on is servant leadership. Servant leadership has helped other leaders succeed over the years, including Virgin Group CEO Richard Branson (De Vries, 1998). Servant leadership is about putting people before profits and the idea is that by putting people first it allows for a leader to focus on installing the right people in the right positions and then getting out of the way to let them do their jobs as they know best how to do them. It is about giving those individuals everything they need to succeed and supporting the workers so that they have all they require to meet objectives. Musk should try this concept as he has been focusing too much on innovation leadership and charismatic leadership—but neither of these are helping to improve the bottom line. They are good for appealing to investors and building the brand, but now practical approaches have to be considered, and servant leadership would enable Musk to start putting in people who have the ability to know what is needed in every situation. By getting out of the way and letting his workers who have experience in factory work focus on fixing the problems in the assembly line, Musk would be acting like a servant leader. He could make sure they have all they require instead of insisting on trying out one of his new innovative concepts and micromanaging them to death. The best way for workers to feel satisfied is for a leader to show that he trusts them: after all, he hired them—so let them do their job.
Tesla is already highly innovative. Now it is a time to be practical, which means it is time for a new leadership concept. In any situation there should be several leadership options available to a leader so that he can choose the best one. Musk has to realize that charismatic leadership is only getting him in trouble with the law and with investors at this point. There is no need to keep trying to sell an idea about who he is and what the company can do. Now the company simply has to focus on producing and for that to happen, the company’s leader has to step back and let those who can manage the other aspects of the company do so on their own terms. By engaging in servant leadership, Musk would be able to give his workers the support they need and the room they require to make decisions on their own as best they know how. A leader has to recognize, as Branson has pointed out, when is the right time to step aside and let others do the job they were hired to do. A servant leader does not micromanage—he empowers. Tesla’s workers need to feel empowered. Micromanaging only leads to the creation of stress—and that is the big problem Tesla needs to address. Servant leadership is the right step forward.

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