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Running Head: OPERATIONALIZATION OF TESLA INC PAPER 0

Operationalization of Tesla Inc Paper

Introduction

Tesla Motors has in the recent past succeeded in being an innovative automobile business firm. Tesla is a global manufacturer of electric cars. The global expansion of Tesla is seen as a biggest opportunity that the company ought to capitalize on. However, the fact that there are little global operations for the company, it remains to be slowed down in its efforts to operationalize this opportunity. As such, Tesla ought to address its weaknesses in order to be able to capitalize on its strengths and be able to operationalize the opportunity of global expansion. This will ensure that Tesla earns global competitive edge in the automobile industry. Currently, the strengths are that the company has to capitalize on their innovative processes, strong brand, and high control on vehicle production. The present paper will describe how Tesla Motors ought to do to operationalize the opportunity of global expansion.

Potential Costs, Risks, and Benefits

The opportunity to operationalize global expansion involves costs, risks, and benefits. The major costs involved in this case include human resources requirements; registration processes of having their business operate oversees, marketing efforts, as well as costs of logistics. The risks involved in the opreationlaize of the idea of global expansion include political instability in various countries leading to burglary and vandalism of properties, natural calamities such as floods and earthquakes, sudden fluctuations in exchanges rates as well as interest, labor market forces leading to the pressures from the workers with regard to salary increments as well as other terms of employment, among other risks. It is important for the company to realize that fluctuation in exchange rates of major currencies can cost it very much. For instance, if the United States dollar were to gain strength in relation to the currency of the current in which Tesla has operations in, the company may lose greatly. For this reason, in its efforts to expand in other countries, the company has to ensure that it studies the general political atmosphere in any country to ensure that over a long period of time in future the currency will remain stable in relation to major currencies in the world such as the US dollar, Japanese Yen, Chinese Yuan or the Euro.

Work Breakdown Structure, Its Narrative and Key Milestones

The breakdown structure in operationalizing the idea of global expansion for Tesla Motors will generally involve three things:

Labor requirement
Capital requirement
Global coordination.

In order for Tesla Motors to open new branches oversses, it has to have competent, experienced, and motivated employees. The recruitment of the suitable candidates to work at this company should be given a lot of emphasis. This is because in any given firm, the employees are the most important assets as they determine the performance of it. As such, Tesla Motors may consider engaging consultants to ensure that wuitable candidates are hired to work in this company.

Further, the company should engage in continuous initiatives to ensure that its workforce is well motivated. As such, the welfare of the employees should be well catered for. In order to motivate employees, the organization should go beyond the aspect of salaries or wages. According to a theorist by the name Abraham Maslow, people have five main types of needs that need to be fulfilled in order to ensure you ern their support in whatever you are engaging them in (John, 2010). These needs are basic needs, security needs, social needs (family and belonging), self-esteem needs, and self-actualization needs. All these needs follow in a hierarchical pyramid depending on their levels of priority. The means that basic needs come first, followed by security needs, followed by social needs, then self-esteem, and finally self-actualization needs come last. As such, Tesla Motors should be able to address all these needs to ensure that its workforce is well motivated.

When the employees are motivated, they tend to be committed to the goals and objectives of the organization. The other way that the organization can do in order to ensure that it attains the support of its employees is to engage them in management. This is called participatory management. The employees can be engaged in management by seeking their inputs whenever the management wants to make any decision. That means that the employees will feel part and parcel of the decisions made in the organization and will therefore be committed to implementing them. Further, Laissez-faire style of leadership should be exercised by the management. This style holds the view that employees should be empowered by giving them freedom to set their own targets and the deadlines to achieve those targets (John, 2010). This will greatly enhance creativity among the employees.

Capital requirement is another major aspect that Tesla Motors ought to consider when operationalizing the idea of global expansion. In this case the organization should ensure that it has enough financial resources to fund its operations overseas. The organization can do this by ensuring that it sources funds from multiple financial institutions as well as from its own investment portfolio. The best source of finance which has little risk is the ploughed back profits (Ansoff, 2010). The ploughed back profits are the reserves of the earnings the organization has from its revenues. In other words, the organization can decide to preserve a big proportion of its earnings instead of paying all of it to the shareholders in form of dividends. For this case, the ploughed back profit will bear little risk as it has no interest rate. The shareholders will also be happy to see the company expand as this will mean that the value of their shares will go up.

The final aspect that Tesla Motors should consider in operationalizing its idea of global expansion is global coordination. The top management should come up with strategies that will ensure that there are effective global coordination efforts of all the operations of the company. This will ensure that all the branches of Tesla Motors worldwide stick to the same goals and objectives. This will create a sense of uniformity and similar standards will be adhered to ensure that customers are satisfied. When the customers are well satisfied, they tend to be loyal to the organization. They also spread the good news of the company to their peers or relatives. Eventually, the organization will be able to get more customers and this will result into more revenues and more profits. This will in turn lead into improved reputation of the organization. As such, the organization will earn competitive edge.

The top management of Tesla Motors should coordinate the activities of the organization worldwide to ensure also that the needs and wants of the customers are increasingly addressed. Further, it is important for the top management to ensure that market research is continuously carried out. Market research will allow the top management of Tesla Motors to come up with strategic decisions that will confront the competition in the real estate industry. In order for Tesla to earn competitive edge in this industry, it has to respond to the needs and wants of the customers and also ensures that it listens to the complaints or concerns of their existing customers. Further, the company will also be in a position to come up with creative ways to address the existing gaps which may be existing in the market (Ansoff, 2010). That is, the market research will allow the company spot gaps and address them accordingly.

Potential Obstacles

The potential obstacles in hindering the operationalization of global expansion idea by Tesla Motors include non-commitment from employees as well as sudden changes in exchange rates of major currencies.

Non-Commitment from Employees

Business experts and management examiners have since quite a while ago considered the extent of an employee's enthusiastic commitment to their company as a vital component influencing work execution. Reliable organizational commitment is by and large characterized as an employee's relationship with, inclusion in and passionate connection to an organization related with the apparent expenses of supporting hierarchical objectives and interests Larger amounts of employee hierarchical commitment result in lower negative work execution, (for example, non-appearance) and higher positive business related practices, (for example, higher maintenance, work execution, and employee prosperity) (College of Business, 2016).

Committed employees carry additional significance to the company, together with through their assurance, proactive support, generally high profitability and a consciousness of value. They are additionally less inclined to call in sick or to leave the company. Non-committed employees can carry out activities against the company and keep down the company's prosperity.

Employees are considered as the organizational insiders. They correspond to possible major security threats first and foremost. It is principally on the grounds that they have genuine right of entry to deal with to corporate data assets and dwell inside the border safeguards of corporate firewalls and other security systems. Most employees are deemed non-malicious. They might carry out unsafe security activities for a number of grounds, however don't deliberately plan to hurt their companies. In some cases, be that as it may, employees can accidentally do genuine mischief to an association's security pose (College of Business, 2016).

Changes in Exchange Rates of Major Currencies

Organizations with overseas business, or internationally trade opportunity, are dependably helpless before worldwide currency variances. Just like the case with private speculations, changes in transformation rates can wipe out benefits or increment picks up. Progressively, numerous organizations have dealings in remote monetary standards and, unless trade rates are settled regarding each other, this presents risk (Garrett, 2016). There are three principle sorts of currency risk explained below.

Monetary Risk: The wellspring of financial risk is the adjustment in the focused quality of imports and fares. For instance, if an organization is sending out (suppose from the UK to an eurozone nation) and the euro debilitates from say €/£1.1 to €/£1.3 (getting more euros per pound sterling suggests that the euro is less important, so weaker) any fares from the UK will be more costly when evaluated in euros. So products where the UK cost is £100 will cost €130 rather than €110, making that merchandise less aggressive in the European market.
Interpretation Risk: This influences organizations with remote auxiliaries. On the off chance that the backup is in a nation whose currency debilitates, the auxiliary's benefits will be less significant in the merged records. More often than not, this impact is of minimal genuine significance to the holding organization since it doesn't influence its everyday money streams. Be that as it may, it would be vital if the holding organization needed to offer the backup and transmit the returns. It additionally winds up noticeably imperative if the auxiliary pays profits. Be that as it may, the term 'interpretation risk' is typically held for solidification impacts.
Exchange Risk: This emerges when an organization is bringing in or sending out. On the off chance that the conversion scale moves between concurring the agreement in a remote currency and paying or getting the money, the measure of home currency paid or got will change, making those future money streams indeterminate. For instance, in June a UK organization consents to pitch a fare to Australia for 100,000 Australian $ (A$), payable in three months. The conversion standard at the date of the agreement is A$/£1.80 so the organization is hoping to get 100,000/1.8 = £55,556. Assuming, in any case, the A$ debilitated over the three months to end up noticeably worth just A$/£2.00, then the sum got would be worth just £50,000 (Garrett, 2016).

Risk Mitigation Strategies

In order to mitigate from risks of sudden changes in foreign exchanges, Tesla should hedge its investment portfolio. Hedging refers to a technique which entail the use of complicated financial instruments which are referred to as derivatives especially futures and options. In this case a loss in either futures or options will be offset by the gain from the other (Stewart, 2011). This is a better trading strategy since the risk of the money invested is minimized to a greater extent. This is because if one of these makes a loss, the other will offset it with its gain.

Conclusion

In conclusion, Tesla ought to address its weaknesses in order to be able to capitalize on its strengths and be able to operationalize the opportunity of global expansion. This will ensure that Tesla earns global competitive edge in the automobile industry. The opportunity to operationalize global expansion involves costs, risks, and benefits. The potential obstacles in hindering the operationalization of global expansion idea by Tesla Motors include non-commitment from employees as well as sudden changes in exchange rates of major currencies. The organization has to mitigate these risks to be successful in its operationalization efforts.

In order to find mitigation against issues of non-commitment from employees, the organization should ensure it engages them in management. This is called participatory management. The employees can be engaged in management by seeking their inputs whenever the management wants to make any decision. In order to mitigate from risks of sudden changes in foreign exchanges, Tesla should hedge its investment portfolio. Hedging refers to a technique which entail the use of complicated financial instruments which are referred to as derivatives especially futures and options. In this case a loss in either futures or options will be offset by the gain from the other.

References

Ansoff, H. I. Eds. (2010). Corporate strategy - An analytical approach to business policy for growth and expansion. New York: McGraw-Hill.

John, K. (2010). Leadership and Management: 21st Management Approach. London: Oxford Press.

Stewart, C. (2011). "Interactions of corporate financing and investment decisions—implications for capital budgeting." The Journal of finance 29.1 (1974): 1-25.

College of Business. (2016). Are your employees committed to information security? Let’s hope. Retrieved from https://business.utulsa.edu/news/are-your-employees-committed-to-information-security-lets-hope/

Garrett, K. (2016). Foreign Currency Risk And Its Management. Retrieved from http://www.accaglobal.com/vn/en/student/exam-support-resources/fundamentals-exams-study-resources/f9/technical-articles/forex.html