Corporate Overview
Tesla Motors is involved in the design, development, manufacturing, and sale of energy storage systems as well as electric vehicles among others. Moreover, the company takes part in the installation, operation, and maintenance of energy and solar storage products. The vision and mission statements of Tesla motors represent a reflection of its prominent beliefs and commitments in relations to electric automobile business and industry. The condition and environment in which the company operates play a critical role in highlighting the appropriateness of its mission and vision (Vance, 2017).
Essentially, the strategic decision-making process at Tesla Motors is largely dependent on its corporate mission and vision statements. In this regard, the direction taken by the organizational growth and development is determined and shaped by the corporate vision. According to industry trends, Tesla Motors has increasingly become more popular through a strong image and brand, which has positioned in a strategic place on the global map as one of the most successful electric automobile companies (Vance, 2017).
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Risks and Challenges
Challenges Faced by Financial Managers
Part of the challenges experienced at Tesla Motors is associated with the short-term planning and management of working capital. In this regard, financial managers are often faced with difficulties presented in relation to the application of strategic management policies and principles to short-term financial obligations. Further, investment decisions are often faced with inadequacies concerning the cost and duration of financing (Marcovici, 2014).
Economic and Political Risks
Economic and political risks in companies such as Tesla Motors are formed part of critical concerns owing to their impacts on such business. As such, Tesla Motors pays specific interests to external factors influenced by economic and political decisions such as political instability, hindrances to free trade engagements as well as government restrictions on the electric automobile industry. Some of these factors would have an adverse effect on the maximization of the shareholder values at Tesla Motors (Ireland and Hoskisson, 2015).
Industry-specific Risks
Some specific risks associated with the electric automobile industry in which Tesla Motors operates include the global expansion of its market. In this regard, Tesla Motors faces stiff competition from several global automobile companies that are already fully established. Such competitions make it difficult for Tesla Motors to enhance its network in relation to service and retail centers across the global market. This ends up making the prices for its products less affordable and less attractive. For example, the present state of affairs indicates that Tesla is involved in the direct sale of its products to its customers thus raising the selling prices. However, states which include Texas and Virginia have been against this directs the sale of products by companies. Such trends pose potential financial risks to the operation and success of Tesla Motors in the electric automobile industry (Vance, 2017).
Company-specific Challenges
There are several challenges that are specific to Tesla Motors Company and have the potential of negatively influencing its short-term and long-term successes. They include the inability to manufacture different models in high volumes compared to their competitors dealing in the non-electric automobile industry. Furthermore, Tesla Motors is faced with the challenge of working hard to the extent of developing automated, efficient and affordable production processes, capabilities as well as supply chains with the ability to support the manufacture of high volume models. The company is also grappling with the challenge of making deliveries in accordance with customers’ expectations due to its limited experience when it comes to the delivery of high volumes of its various products (Marcovici, 2014).
Corporate Social Responsibility (CSR) and Ethics
Key CSR and Ethical Issues
In the operation of Tesla Motor, Corporate Social Responsibility (CSR) play a critical role in determining and influencing the roles played by the different major stakeholders which include investors, employees, customers, suppliers and the environment composed of different communities. In this case, some of the keys CSR issues include the strategies adopted by Tesla Motors in its attempt to address some of the interests of its major stakeholders. These strategies include the emphasis and encouragement of citizens and stakeholders to play an active and positive role towards promoting corporate social responsibility at Tesla Motors. When it comes to ethical issues, Tesla Motors has had to address concerns surrounding its autopilot operations. Many critics have questioned the moral ethics behind endowing vehicles with autonomy and the credibility of the purported artificial intelligence involved (Crowther and Aras, 2008).
How the Identified Issues can Impact the Corporation’s Value
Some of the issues identified through CSR and ethics associated with Tesla Motors have the potential of affecting its corporate value. Active and positive participation of different stakeholders such as investors and customers is highly likely to result in an enhanced corporation value for Tesla Motors. On the other hand, the clarity and comprehensive with which Tesla Motors chooses to address the ethical concerns raised in relation to the autopilot mode of operation for some of its vehicle models is likely to reverse the negative effect on corporation value (Lee and Kotler, 2013).
Role of Financial Managers
Financial managers at Tesla Motors have a crucial role to play in managing issues emanating from corporate social responsibility strategies as well as ethical concerns. As such, it would be prudent for the financial managers to ensure that optimal funding and financial resources are directed towards enhancing CSR participation among the key stakeholders and to raising awareness regarding ethical concerns on the part of autopilot in some of its vehicle models (Ireland and Hoskisson, 2015).
Reflection on the Importance of Ethics and CSR
The process of decision-making in relation to financial matters is a critical stage that ought to involve the incorporation of ethical concerns as well as CSR among various key stakeholders. The reasoning behind this reflection is that failure to appreciate the importance of ethics and CSR in financial decision-making could essentially have serious financial ramifications on the operations of Tesla Motors (Crowther and Aras, 2008).
References
Crowther, D., & Aras, G. (2008). Corporate social responsibility . Frederiksberg, Denmark: BookBoon.
Ireland, R. D., & Hoskisson, R. E. (2015). Strategic management: Competitiveness & globalization; concepts . Stamford, Conn: Cengage Learning.
Lee, N., & Kotler, P. (2013). Corporate social responsibility: Doing the most good for your company and your cause . Hoboken, N.J: Wiley.
Marcovici, M. (2014). Why Tesla's shares will cost 2.000 $ within 12 months: The car concept of the future . Norderstedt: Books on Demand.
Vance, A. (2017). Elon Musk: Tesla, SpaceX, and the quest for a fantastic future .
