Tesla Inc.’s (formerly Tesla Motors, Inc.) corporate social responsibility strategy (CSR) addresses some of the major interests of the stakeholders of the automotive and energy solutions business. In Archie B. Carroll’s model, stakeholders and businesses affect each other. This relationship emphasizes the importance of corporate social responsibility, corporate citizenship, and stakeholder management. In this company analysis case, Tesla’s automotive business directly and indirectly affects concerned stakeholders. For example, the company affects stakeholders through the nature and design of its electric vehicles, batteries, and solar panels, all of which address the ecological concerns of stakeholders. It is essential for the company to maintain an adequate corporate social responsibility strategy to ensure minimal negative impact on and optimal benefit to stakeholders. With a strong international brand, Tesla, Inc. has significant opportunities to show the world what a major global firm’s corporate social responsibility efforts can do to satisfy the interests of stakeholders and contribute to the global community.
Tesla, Inc. addresses stakeholders’ interests through a corporate social responsibility strategy that focuses on sustainability and environmental friendliness of automotive, energy storage, and energy generation products. These CSR efforts help improve the company’s position relative to competing automakers like General Motors Company, Toyota Motor Corporation, Honda Motor Company, Volkswagen, Nissan Motor Company, and BMW (Bavarian Motor Works). Corporate citizenship activities are strongly integrated into Tesla’s products and management practices. Such corporate responsibility approach benefits stakeholders, while also boosting the company’s corporate and brand image.
Tesla’s Stakeholder Groups & CSR Initiatives
Tesla Inc. has a corporate social responsibility strategy that focuses on the nature of the business and its products. For example, the company’s electric automobiles are widely viewed as an answer to the negative impacts of cars that use internal combustion engines. In this regard, corporate citizenship is essential in the business. This condition facilitates the company’s achievement of its corporate responsibilities. The following are Tesla’s stakeholders, arranged according to the company’s CSR prioritization:
Communities. Tesla, Inc.’s automotive business directly satisfies the concerns of communities. Communities are stakeholders that determine brand image through their significant lobbying activities and responses to the business. One of the interests of this stakeholder group is to ensure that the natural environment is conserved or protected. In this business analysis case, the company’s electric automobiles, batteries and solar panels (through the subsidiary SolarCity) address such interest. For example, communities are satisfied with the environmental friendliness of these products. Tesla’s corporate citizenship strategy also satisfies this stakeholder group’s interest of benefiting from advanced technologies. For example, in 2014, CEO Elon Musk announced that the company would allow other individuals and organizations to use its patents. This corporate social responsibility strategy directly benefits communities through development projects that involve such technologies. These initiatives emphasize sustainable energy solutions, which are at the core of Tesla’s mission and vision statements. In satisfying such community interests, the CSR approach helps promote the company’s public relations (see Tesla Inc.’s Marketing Mix or 4P).
Customers. Customers affect Tesla’s revenues and are interested in product quality and reasonable pricing. Given such significant effect, the company gives high priority to these stakeholders in its corporate social responsibility programs. To address such interests, the firm seeks new ways of minimizing costs. For example, instead of continuing to buy battery cells from Panasonic, Tesla shifts to manufacture, in collaboration with Panasonic, its own batteries to make its electric automobiles more affordable. Also, the company expands its network of charging stations to improve accessibility for customers. This CSR approach improves customer experience and satisfaction. These corporate social responsibility efforts ensure that Tesla Inc. satisfies the interests of customers as a stakeholder group.
Employees. In designing its corporate social responsibility strategy, Tesla, Inc. believes that employees are a critical success factor in its automotive and energy solutions business. As stakeholders, employees influence business productivity and performance. Their CSR interests include high compensation and significant career opportunities. Tesla’s corporate responsibility approach satisfies these interests through a competitive compensation strategy, as well as HR programs for skills development and leadership development. Moreover, the company’s corporate social responsibility strategy offers learning experiences through collaborative programs with partner firms. These CSR programs satisfy the interests of employees as stakeholders. Furthermore, Tesla’s organizational culture helps improve employee morale and minimize issues in the workforce.
Investors/Shareholders. Tesla’s early years depended on a series of funding from investors. These stakeholders are important in influencing the company’s capitalization. Investors and shareholders have interests in the profitability and growth of the business. Tesla’s corporate social responsibility approach addresses these interests through long-term strategies that aim to transform the automotive/transportation and energy market. For example, the company’s decision to allow other firms and individuals to use its technology patents is expected to increase market demand for electric vehicles and related products. This increase in demand is expected to create business growth opportunities for Tesla. The sustainability and environmental friendliness ideals in the company’s corporate citizenship approach are also in line with current sociocultural trends. As a result, these CSR ideals support business growth. Tesla Inc.’s generic competitive strategy and intensive growth strategies aim to maximize profit and contribute to fulfilling this corporate responsibility. Considering its profitability in recent years, the company has a corporate social responsibility strategy that continues to improve in satisfying the interests of investors/shareholders as stakeholders of the multinational business.
Governments. Tesla, Inc. experiences the effects of governmental action. Governments are stakeholders that present requirements, limits and opportunities to businesses. This stakeholder group’s interests include legal compliance, as well as business contribution to economic growth. With plans for strategic global expansion and an excellent sustainability record, Tesla’s corporate social responsibility strategy satisfies these interests. Also, governments impose requirements that influence operational tactics. Tesla Inc.’s operations management approach is implemented in line with these concerns. For example, the company’s supply chain management for its automobile production complies with government regulations on material sourcing.
Tesla, Inc.’s CSR Performance in Addressing Stakeholders’ Interests
Tesla’s corporate social responsibility efforts are satisfactory in addressing the interests of most of its stakeholders. However, the company can improve its CSR programs to improve its performance in supporting communities and investors/shareholders. For example, to improve CSR effectiveness in satisfying communities, Tesla, Inc. can implement new community development programs. Also, the company must increase its efforts in international expansion to address the interests of shareholders/investors in benefiting from the automotive business. These recommendations are expected to enhance Tesla’s corporate social responsibility standing.
Business expansion adds to the fulfillment of Tesla Inc.’s corporate responsibilities. The company adjusts its strategies to fulfill and maintain corporate citizenship goals. For example, strategies are developed according to current and emerging changes, such as the trends shown in the PESTEL/PESTLE analysis of Tesla Inc. The company manages these changes through programs and initiatives for sustainable operations and products, green technologies, and other ecological approaches.
References
Crane, A., & Matten, D. (2016).Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press.
Ditlev-Simonsen, C. D., & Wenstop, F. (2013). How stakeholders view stakeholders as CSR motivators.Social Responsibility Journal,9(1), 137-147.
Gast, J., Gundolf, K., & Cesinger, B. (2017). Doing business in a green way: A systematic review of the ecological sustainability entrepreneurship literature and future research directions.Journal of Cleaner Production,147, 44-56.
Kolk, A. (2016). The social responsibility of international business: From ethics and the environment to CSR and sustainable development.Journal of World Business,51(1), 23-34.
Peloza, J., & Shang, J. (2011). How can corporate social responsibility activities create value for stakeholders? A systematic review.Journal of the Academy of Marketing Science,39(1), 117-135.
Tesla also has an extensive corporate social responsibility (CSR) strategy that includes focusing on the safety of both employees and consumers, supporting a diverse work environment, sourcing responsibly produced materials, and contributing to education.
The institutional investors that own the largest stakes in Tesla include investment advisors and managers, banks, financial services firms and asset management companies. As a group they account for the largest portion of Tesla's shares and can have the ability to impact the share price.
Tesla Incorporated discusses the stakeholder interests through a corporate social responsibility strategy that emphasizes the sustainability and environmental friendliness of automotive, energy storage, and energy generation products.
Corporate social responsibility includes the responsible business organization with respect to stakeholders (shareholders, employees, customers, and suppliers), the business relationship with the state (local and national) institutions and standards, the business as a responsible member of society in which it operates, ...
Tesla, Inc. has been criticized for its cars, workplace culture, business practices, and occupational safety. Many of the criticisms are also directed toward Elon Musk, the company's CEO and Product Architect. Critics have also accused Tesla of deceptive marketing, unfulfilled promises, and fraud.
To summarize this quick overview of Tesla Inc., the company utilizes one business model: Manufacturer-Direct, and a mix of four strategies: Differentiate (Premium Branding), Scale (Vertical Integration), Customer Captivity (Network Effects), and Government Intervention (Lobbying and Incentives & Subsidies).
As a general rule, stakeholder priority can be divided into three levels. The first and most important comprises employees, customers, and investors, without whom the business will not be able to operate. Secondary to them are suppliers, community groups and media influencers.
From public health and social care to health promotion and research, in general, all healthcare organisations will have the "4 P's" as their stakeholders: patients, providers, policymakers and payors.
Tesla, Inc. addresses stakeholders' interests through a corporate social responsibility strategy that focuses on sustainability and environmental friendliness of automotive, energy storage, and energy generation products.
Active economic stakeholders (suppliers, business partners, customers, employees) Observers and/or influencers (non-profit organisations, trade unions, lobbies, government) Beneficiaries or victims, depending on the positive/negative and direct/indirect effects of the company's activities (local communities, etc.)
Social responsibility means that besides maximizing shareholder value, businesses should operate in a way that benefits society. Socially responsible companies should adopt policies that promote the well-being of society and the environment while lessening negative impacts on them.
CSR is generally categorized in four ways: environmental responsibility, ethical/human rights responsibility, philanthropic responsibility and economic responsibility.
Primary stakeholders are investors in your business, such as your employees, customers, suppliers, and creditors. Secondary stakeholders include consumers (who may or may not purchase from you), government agencies, and unions.
Tesla has faced controversy for its workplace culture and business practices, as well as its product, including concerns that the autopilot and “Full Self-Driving” features included in some Tesla models have caused crashes and are unsafe for drivers.
The seven strategies at the core of Tesla's masterplan—connectivity, electrification, autonomous, battery sustainability, data business model, new mobility and organizational structuring— would appear standard pre-requisites for any self-respecting automotive manufacturer.
As a company at the forefront of innovation for energy and transportation we live by the principles of hard work, exceptional performance, integrity, and fairness.
Unlike other car manufacturers who sell through franchised dealerships, Tesla sells directly to consumers. It has created an international network of company-owned showrooms and galleries, mostly in urban centers.
Shareholders/owners are the most important stakeholders as they control the business. If they are unhappy than they can sack its directors or managers, or even sell the business to someone else. No business can ignore its customers.
The primary stakeholders in a typical corporation are its investors, employees, customers, and suppliers. However, with the increasing attention on corporate social responsibility, the concept has been extended to include communities, governments, and trade associations.
Internal stakeholders include employees, business owners, investors and board members. External key stakeholders, however, are people affected by your business who do not directly work with you. External stakeholders include distributors, regulatory agencies, customers and creditors.
The international standard providing guidance on social responsibility, called ISO 26000, defines a stakeholder as an "individual or group that has an interest in any decision or activity of an organization."
Customers are some of the largest stakeholders of a business because they are directly impacted by the quality and availability of a company's products or services.
Think Like Owners. Like the above, Tesla encourages all employees to think like owners meaning that they always find the best way to do something, rather than going through the motions and ticking boxes. A culture that encourages this strategic thinking will create a team that is passionate, proactive and responsible.
Tesla's mission is to accelerate the world's transition to sustainable energy through increasingly affordable electric vehicles in addition to renewable energy generation and storage. Tesla is accelerating the world's transition to sustainable energy.
Tesla's total equity for fiscal years ending December 2018 to 2022 averaged 23.117 billion. Tesla's operated at median total equity of 23.679 billion from fiscal years ending December 2018 to 2022.
If society decides it does not want its jobs outsourced to low-cost economies, for example, then consumers must be willing to pay the higher prices that result from protecting domestic jobs. Equally importantly, they also need to be willing to punish those firms that continue to source abroad by shopping elsewhere.
Social responsibility works as a platform for companies and consumers alike to make a positive impact on local and global communities. Businesses that implement a social responsibility initiative that's in line with their values have the opportunity to increase customer retention and loyalty.
What Is the Role of a Stakeholder? A stakeholder's primary role is to help a company meet its strategic objectives by contributing their experience and perspective to a project. They can also provide necessary materials and resources. Their support is crucial to a successful project.
corporate social responsibility (CSR) is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large.
CSR initiatives are often broken down into four categories: environmental, philanthropic, ethical, and economic responsibility. Environmental initiatives focus on preservation of natural resources, while philanthropic initiatives focus on donating to worthy causes that may not relate to a business.
What are the three pillars of CSR ? The three pillars are economic, social and environmental. A company's sustainable development strategy focuses on these three key topics and action plans are created based on them.
CSR strategy is the comprehensive plan companies and funders use to design, execute, and analyze their corporate social responsibility initiatives. It includes specific focus areas, program design, promotion and communication approaches, and evaluation procedures.
The list of secondary stakeholders may be long and include: business partners competitors inspectors and regulators consumer groups government – central or local government bodies various media pressure groups trade unions community groups landlords.
Secondary stakeholders are those who have an interest in the business and can affect its operation, usually from the outside, for example business partners, trade unions, inspectors/regulators, consumer/environmental groups, government and local councils, community groups, business premises owners.
The company's CSR activities include reducing emissions and consumption of natural goods in the production of automotive components, as well as activities to improve the working conditions of its employees.
Corporate social responsibility is a business model by which companies make a concerted effort to operate in ways that enhance rather than degrade society and the environment. CSR helps both improve various aspects of society as well as promote a positive brand image of companies.
Tesla's Organizational Culture Type & Features. Tesla, Inc. has an innovative problem-solving organizational culture. This type of corporate culture motivates employees to develop profitable solutions to current and emerging problems in the target market.
CSR strategy is the comprehensive plan companies and funders use to design, execute, and analyze their corporate social responsibility initiatives. It includes specific focus areas, program design, promotion and communication approaches, and evaluation procedures.
The responsibility of an organization for the impacts of its decisions and activities on society and the environment, through transparent and ethical behavior that: Contributes to sustainable development, including health and the welfare of society.
What are the three pillars of CSR ? The three pillars are economic, social and environmental. A company's sustainable development strategy focuses on these three key topics and action plans are created based on them.
The aim of social responsibility is to ensure that the individual or the social entity do not harm, but benefit the society as well as the environment while the aim of corporate social responsibility is also the same; however, in CSR the business company aims for their benefits as well.
Tesla does not engage in abusive or manipulative behavior. This applies to how we deal with everyone. For customers, our goal is to meet or exceed their expectations of transparency and fairness. We honor consumer protection laws in the places in which we operate.
Tesla's vision is to “create the most compelling car company of the 21st century by driving the world's transition to electric vehicles,” while its mission is “to accelerate the advent of sustainable transport by bringing compelling mass-market electric cars to market as soon as possible.” Tesla used a transitional ...
Tesla employees enjoy comprehensive medical coverage, 401(k) and generous PTO from day one. With equity grants, stock discounts and more perks, we invest in our team to help them do their best work.
Think Like Owners. Like the above, Tesla encourages all employees to think like owners meaning that they always find the best way to do something, rather than going through the motions and ticking boxes. A culture that encourages this strategic thinking will create a team that is passionate, proactive and responsible.
Direct Sales. Unlike other car manufacturers who sell through franchised dealerships, Tesla sells directly to consumers. It has created an international network of company-owned showrooms and galleries, mostly in urban centers.
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