Strategic Management (Business & Marketing Essay)

Strategic Management
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Strategic Management
Introduction
Strategic management is referred to as managing the resources in an organization (Hanson, Hitt, Ireland and Hoskisson, 2016). Strategic management aims to maximize benefits and achieve the goals and objectives of a company (Hill and Jones, 2016). Strategic management also helps in analyzing the competitive market and using resources in such a way that the company reaches its objectives.
Background and Governance Structure
Founded by Martin Eberhard and Marc Tarpenning (Voigt, Buliga and Michl, 2017), Tesla is one of the world's most innovative automobile companies. It is named after the inventor Nikola Tesla, who was well-reputed for his work in the electromagnetic fields in rotation (Tucker, 2020).
Electric cars have been the focal point of automobile companies for quite some time. However, various problems in the cost and production of an electric car were seen. Tesla has always been after innovation rather than compulsive creation. The company takes pride in being the face of innovation for the world. After founding Tesla, Martin and Marc became the CEO and CFO of the company, respectively. In the present day, Elon Musk is the founder of Tesla, along with three other people leading the company, including Zachary, Jerome, and Andrew. The organizational structure of Tesla is a functional-based hierarchy (Shah and Kelly, 2016). This hierarchy refers to a structure where different departments are allocated to deal with that particular firm's local and international ventures. The company's functional offices include Chairman and Chief Executive Officer, Finance, Technology, Global Sales and Service, Engineering, and Legal. The company also uses a centralization structure where the primary vital decisions are generated from a team of people that observe managerial control in the global and international markets. The autonomy is given to the central managers rather than the region heads.
Governance Flaws in Tesla
Bad Leadership and poor governance were significant issues that Tesla faced in 2019. Two factors led to the governance flaws in the company. Firstly, Musk's attitude towards the company is irresponsible. The casual and misleading tweets posted by Elon Musk harmed the company's reputation. The company also frequently changes its board members, which shows how governance has failed in the long run. Musk was also removed as the chairmen of Tesla shortly after his tweet. The centralized governance structure is the root of all problems because a lack of autonomy may disrupt internal governance.
PEST Analysis
The external analysis of a company is essential to determine its standing in the competitive market (Hollensen and Opresnik, 2019); thus, discussed below is the PEST analysis of Tesla. Inc.
Political
Since Tesla produces electric cars that need almost no fuel and they are charged in electric stations, the government has taken many steps to ensure the increase of using hybrid engines in vehicles to create a more sustainable environment (Apte and Sheth, 2016). The company is expanding to other countries; however, their economies may become a barrier to Tesla's ...