Final Communication Plan Report

BCOM 314R, Section 12

February 28th, 2019

Team 60
Brady Ettenson
Jared Backner
Jialiang Jiang
Nick Lyons
Oscar Villasenor
Thomas Coppinger
 Table of Contents

Executive summary​ .....................................................................................................................3

Introduction ​..................................................................................................................................4

Situation​.........................................................................................................................................4

Background & Analysis​..................................................................................................................5

Recommendation (Employees)​.....................................................................................................6

Recommendation (Management)​.................................................................................................6

Recommendation (Consumers)​.....................................................................................................7

Response​........................................................................................................................................8

Conclusion​......................................................................................................................................8

Figure (Timeline)​............................................................................................................................9

References ​...................................................................................................................................10
Executive Summary:
Since Tesla's inception it has been encountering a whirlwind of issues. In 2016, Elon Musk was
appointed to be the CEO in 2003. Unfortunately, the situation is that Tesla has not made a penny
of profit, even with Elon Musk as CEO. Here is some background on the CEO, as of recently
their is mixed controversy as to whether Elon Musk is fit to be the CEO of Tesla. Here are
several reasons that reinforce this narrative. For Instance, Elon Musk made a tweet regarding that
he could take the company private, however his claim never came to fruition. For this he was
being legally challenged and highly scrutinized for his actions. Musk has been caught in a
whirlwind of controversy, his erratic behavior is truly tarnishing Tesla.
In addition to this Elon Musk nonchalantly decided to go onto a podcast with Joe Rogan to
smoke marijuana. This brought an outpour of outrage from not only his employees but more
importantly the image of Tesla. This as a result has lead business owners to doubt Mr. Musk's
ability to properly run a company that has had such high momentum in the last few years. On top
of all this, Elon Musk's loyalty to Tesla is in question since he is also running a key role for
SpaceX. Of course this is hindering Musks ability to fully execute the role of the CEO for Tesla.
With the CEO’s lack of commitment, it has introduced a hail storm of issues for the company.
In the grand scheme of things, Tesla's stakeholders are carrying the brunt of it all. Being key
stakeholders, employees are being pushed to over work, creating internal strife since they not
able to reach their daily goals. A viable solution to this serious issue would be to allow the
employees to unionize.
Another stakeholder on the line is management. Management has failed to be proactive with the
complete mess with human resources. Tesla needs executives that are not afraid to get their
hands dirty and fix the employment fiasco. Which is precisely why we recommend that Tesla
hire a group of executives specifically had-picked to resolve this debacle.
Lastly, the consumer themselves are the lifeblood of Tesla and are the most vital stakeholder to
the company. Tesla needs to find a solution that would be viable for their consumers. Which is
exactly why we recommend Tesla go unconventional and invest in an ad campaign. This would
not only revolutionize Tesla but they would set the stage for the car industry.
In terms of Tesla's response, it appears that Tesla will need to make a few big investments in
order to turn things around. They will need to spend around $400,00 to allow employees form a
union and spend around $123,000 per ad.
In conclusion, with these provided suggestions we can comfortably say that it would be in Teslas
best interest to implement them. More importantly is Tesla is to see any drastic changes it is
essential that Elon Musk reorient himself and take charge of these suggestions. He must set the
example.
Introduction:
Since the start of Tesla in 2003, Tesla has been encountering complications regarding
production, excessive criticism from social media due to Tesla’s CEO Elon Musk, and poor work
environments. Tesla facing these challenges have affected key stakeholders in a negative way
which has led the into company dreadful state. This document will provide information on
Tesla’s narrative, challenges, and our recommendations to improve the company.
Situation:
In 2003, Tesla mission statement says, “to accelerate the world’s transition to sustainable
transport”. By focusing on mass marketing electric vehicles that would be better, faster, and
more enjoyable than gasoline powered vehicles. As of today, Tesla’s narrative, one that is
mentioned in every single Tesla blog post and every Elon Musk public appearance now
mentions, “to accelerate the world’s transition to sustainable energy”. Since the company was
taken over officially by Elon Musk in 2016, Tesla not only manufactures electric vehicles but
also scalable clean energy generation and storage products. This single narrative has been
effective for Tesla and has drawn enormous attention to the brand without the need for any
advertisements because consumers can visually see the product at hand. Tesla’s narrative is not
solely based on the company itself but more towards the vision Elon Musk has for the world’s
future. Elon musk believes the faster the world gets rid of fossil fuels and moves towards an
entire sustainable energy ecosystem the better our world will become for future generations. This
has been the primary vision for Elon Musk since the beginning of his rein in Tesla but by
developing the next best thing, Musk has run into multiple obstacles.
Elon Musk has been the Chief Executive Officer for Tesla since 2016, currently Musk has
experienced nothing but difficulties running the company. As of today, Tesla has not made any
revenue since the beginning of 2003, consumers are not receiving vehicles as scheduled, and
employees are working in unfavorable conditions. These complications play a tremendous role
by having a negative impact on the company affecting key stakeholders that service Tesla. The
main stakeholders that are being affected by these problems are employees, management and
consumers. Musk has addressed these issues to the media but has not taken initiative action into
fixing the problems for Tesla, his primary concern revolves around his second company which is
SpaceX. By not having Elon Musk fully engaged into Tesla fixing the challenges we face as a
company, Tesla will not be able to produce the narrative that was set to make our world a better
place.
Background & Analysis:
T​esla’s central issue that it deals with is Elon Musk’s erratic behavior and lack of commitment to
Tesla. Elon Musk has been CEO of Tesla since 2014, and he is credited with driving the Tesla
vision which is to transform the Energy and Transportation industries. However, Elon Musk has
been caught up in scandal after scandal, which has hurt Tesla’s image in the public’s eye.
Musk falsely claimed on Twitter that he secured funding to take Tesla private. This was not only
incorrect, but also illegal. Musk had to settle with the Securities and Exchange commision. Musk
also was caught up in controversy when he smoked marijuana during a podcast with Joe Rogan.
This would be inappropriate behavior for any CEO, notwithstanding that Tesla employees are
commonly drug tested.
Musk was additionally caught up in an exchange with a reporter where he referred to a cave
diver as the “pedo guy.” On an earnings call in May of 2018, Musk accused reporters of asking
“boring bonhead questions.” He also on twitter threatened to create a website where he would
track the credibility of every single reporter because he was upset at reporters who criticized him.
Each of these incidents hurt Tesla both for Consumers and stockholders. Consumer’s see an
erratic CEO who can’t effectively lead and be politically correct in a world where everything you
say is put under a microscope. Additionally, after each incident Tesla stock fell to varying
degrees, which hurts stakeholders.
Musk’s erratic and odd behavior has driven many reporters and business leaders to question
Musk’s mental health and well-being. Many have speculated his behavior is stress induced.
Nonetheless the reason, Musk’s behavior is unprofessional and inappropriate for any CEO. His
behavior is even more damaging than any other CEO’s behavior would be to their company
because Musk is so essential and integral to the Tesla brand. Musk is considered the creative
genius and visionary that is spearheading Tesla’s vision to change the world by reducing the
effects of climate change. Musk is Tesla. Any damage to the reputation of Musk is also very
damaging to the Tesla brand.
Musk is also not fully committed to Tesla. Musk is the founder of SpaceX, The Boring
Company, Paypal, and SolarCity. Musk is very interested in the movie industry living in LA, and
he has many investments in different movie studios. He currently is dedicating varying amounts
of his time to each of his ventures. A CEO could not properly run one company while dedicating
so much time to other ventures. His lack of dedication to Tesla is a central reason that Tesla is
having day-to-day operational issues.
For example, Musk logged 150,000 miles on the Tesla corporate jet last year. Only a fraction of
these miles were Tesla related. Most of these miles were logged travelling to different movie
premieres, conventions, and festivals, or on vacations with his family. Musk infamously took a
one week vacation to Italy right as Tesla’s production problems were at their worst late in 2017.
Partly because of Musk’s lack of leadership and lack of dedication to his company, Tesla has
been mired in financial, production and employee-safety problems. The production problems
have been most damaging to the company. Tesla customers were receiving cars months late as a
result of both upper-management making false promises and Tesla factories not being able to
live up to those promises. This all falls back onto the shoulders of Musk who has been quick to
blame others within the company for these problems while also not dedicating himself full-time
to fix the issue.
Musk’s erratic behavior and lack of commitment to Tesla is becoming a serious distraction from
the narrative that Tesla and Musk are trying to convey. Musk is promoting a narrative that Tesla
is going to save the world by providing a sustainable solution to climate change, while providing
top-notch cars and a luxurious customer experience along the way. However, there is nothing top
notch about lying to your shareholders and the public about taking your company private, or
about calling a man a pedophile without proof. There is nothing luxurious about receiving your
car three months after the promised date. Luckily, Musk still has time to save the world.
Recommendations:
Tesla’s issues regarding Elon Musk and his management style are causing a serious lack of
production of Tesla vehicles, the result of this issue is creating a negative image of tesla from an
employee’s perspective that differs from our internal narrative. The biggest way for us as interns
is to help communicate solutions to our stakeholders is to make our recommendations towards
our CEO, Elon Musk, regarding the challenges Tesla’s image is facing.
The first of our key stakeholders is our employees, specifically within our factories. These vital
members of our company have been extremely concerned with the working conditions currently
in place within Tesla’s factories. Employees from their factories in California, claimed that “they
started changing rules without any remorse” resulting in stricter working conditions that caused
significant distress among all factory employees. Due to the fact that Elon Musk can’t keep up
with their desired production standards, employees are forced to work long hours with increased
stress. If the employees can’t reach their production goals at a consistent level, then the post
purchase satisfaction from customers will continue to decline leading to an increasing of our
negative image. Our recommendation to Musk, for Tesla’s employees, is to reestablish the
employee perception of Tesla as a company by allowing their employees to unionize. Creating
better working conditions will result in an increase in productivity of the factory employees,
which will allow the image of Tesla to become more positive within the community of Tesla
owners.
The second key stakeholder of our company is the upper management, specifically Elon Musk.
As an electric car production company, the ways we share information with our stakeholders is
mainly through our CEO, Elon Musk. With his involvement in both Tesla and SpaceX, he has
been spread thin with his ability to effectively lead both organizations. Musk has been reportedly
criticized for both pushing his staff to the limit, as well as, pushing himself to the brink of a
breakdown to show his employees that they aren’t the only ones going the extra mile. Situations
were Musk is “sleeping on the factory floor” just so he can be “on hand to address problems
quickly,” just goes to show that Musk doesn’t have the time to effectively run the company on
his own. We need our CEO to be fully involved in finding a solution for our production issue and
the negative images portrayed in the media. His lack of involvement is hurting his ability to
effectively help tesla and change the image they are sharing with the electric vehicle world.
With our current model of having Musk being the face of Tesla’s narrative, what we recommend
is that he shares some of the burden with how Tesla shows its narrative and dealing with the
problem of their negative image. Splitting up the responsibility of Musk to another group of
company executives is a way where Musk isn’t forced to manage two companies that both
require a full time CEO. Allowing another full time qualified group of employees to devise a
plan of operation to better manage the issue can avoid situations where the face of our company
is illustrating an unfavorable one. Fixing the external narrative of Tesla is the main issue we need
to solve, in an attempt to correct that having more people focused on the solution the better Tesla
will be regarding the public’s perception.
The final key stakeholder of Tesla is the consumer; the significance of the consumer is the first
priority of Tesla as a car manufacturer. Maintaining their positive image of our company is what
drives us to continually innovate the electric vehicle market. Even with the constant effort of
Elon Musk to show how much Tesla is committed to the consumer, we are still facing issues
with our negative company image. Our recommendation to combat this problem is to stray away
from the strictly twitter reports from Musk and invest in an actual marketing advertisement
campaign designed to address these issue.
Attempting to turning the public’s perception into a positive one, opening a channel for
connection between Tesla and the consumer can allow for a change in that perception. As of now
Tesla has never produced any type of television, radio, or online advertisement, but by starting a
campaign to change that image can be an effective tool in solving the problem of having a
negative external narrative. Information provided from the Mintel market research website, in the
car purchasing process report (Figure 1), fuel efficiency tops the chart for vehicle features people
are looking for when buying a new car. Tesla is currently the industry leader for fuel efficiency,
in addition with the next two top features, competitive pricing and safety features, Tesla vehicles
have an advantage. Specifically regarding the Model S, the National Highway Traffic Safety
Administration awarding the vehicle with a “5-star safety rating, not just overall, but in every
subcategory without exception.” Sharing information like this to the public through televised
advertisements can be an effective method of creating a more positive image and also showing
that Tesla is committed to the wants and safety of their customers.
Response
It is necessary to analyze costs, benefits and all other effects associated with any decision. It is
for this reason that we should create a budget for each of our recommendations to Tesla.
Allowing workers to unionize, making Elon Musk assume responsibility for correcting Tesla’s
image and creating an ad campaign to reinforce our image are all actions that will bridge the gap
between our company’s narrative and the negative external narratives. In considering these
recommendations, we should compute a projected budget, return on investment and the
timeframe of these possible implementations.
Unionizing the labor within Tesla would gain trust from workers and make them feel protected,
but would come with substantial costs. Operations with unionized labor cost up to 35% more
than non-unionized operations, not including the many other expenses to be incurred during the
year. Unionizing labor costs on average $400, or two hours of pay per month for every employee
each year. Considering that there are 10,000 employees working in the factories, allowing a
union to form among them will cost at least $400,000. However, forming a union will make
working for Tesla more favorable, resulting in us acquiring better workers, and increase our
productivity because the employees are satisfied. Allowing factory workers to unionize will
change the negative external narrative about how we treat the workers and is an excellent way to
benefit our company but will come at a significant cost.
Elon Musk is the driving force behind our own narrative; therefore it is needed of him to take the
initiative to implement necessary changes, partly because his leadership is spread in time
between SpaceX and Tesla.We recommend Musk hire team to make upper level decisions that
will actively work to correct external narratives. This decision is important and worth the hefty
cost associated with it. Hiring new employees is a very expensive process requiring
hemorrhaging of money and resources to train, pay and give benefits. Therefore, hiring many
people, especially all around the same time, can be a large investment. The benefits of hiring
staff to take over the decisions of Tesla while Mr. Musk is involved with SpaceX will prove to
be priceless because it will improve the image of our company tremendously and will expel
negative narratives.
Tesla has prided itself for being a household name company that has spent almost no money at
all on advertising. However, given the current state of our company, creating a commercial that
is dedicated to addressing the negative narratives and informing the public that Tesla is
committed to making those who are dissatisfied embrace the company’s vision. The idea of
Tesla’s first ad campaign is made to reinforce the company’s narrative will have a profound
impact on the general public’s perspective of the company. Running a 30 second ad on nationally
broadcasted television will cost on average $123,000, and an ad placement in social media apps,
such as Snapchat, Twitter, etc. can cost up to $750,000. These ads will not only catch the eye of
car buyers, but will also change the perception of Tesla in their current, unhappy customers.
Conclusion:
Tesla believes that society should insist on using sustainable energy in the future. Musk’s
management style, production issues, negative impacts play an important role in the development
of Tesla. However, Musk did not have enough sense of responsibility for Tesla. On the other
hand, there are some ways to talk with our stakeholders about employee issues, upper
management, and consumer problems. We provide suggestions for our CEO to allow employees
to unionize and get more involved in leading the organization. Besides, Elon Musk needs to
change Tesla’s negative image and share the responsibility to reduce negative effects. In
addition, the advertisement campaign is useful for Tesla to communicate with its consumers to
solve external problems. Projected budget is a good way to solve those problems. Unionizing
also brings benefits for our company and reduce negative narratives about employees. Tesla has
to make changes to decrease their problems and create a better environment for their teams.
Timeline for Implementation of Recommendations
Figure 2: Fuel Efficiency Graph

http://reports.mintel.com.ezproxy1.library.arizona.edu/display/900828/
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