微信客服：xiaoxionga100
微信客服：ITCS521
MGMT20001代写-MGMT20001
时间：2022-11-07
Elon Musk: The New Industrialist
MGMT20001 Organisational Behaviour
1
Elon Musk: The New Industrialist
On March 10th 2020 Elon Musk, the South African-born American entrepreneur tweeted to
his 32 million followers “Congratulations Tesla team on making our 1,000,000th car!!” The
tweet, including a picture of a team of workers surrounding a bright red car, celebrated the
company becoming the first manufacturer to pass this electric car manufacturing milestone.
It was a momentous moment for Musk and Tesla, the culmination of a 17-year journey and
part of a broader aim to revolutionise the world’s relationship with sustainable energy and
transport.
Figure 1: Source
twitter.com/elonmusk
Tesla is only one piece of 48-year-old Musk’s suite of companies aiming to radically reshape
global manufacturing. Making his fortune in his 20s developing and later selling online guide
Zip2, Musk went on to be one of the early creators of PayPal. An engineer, inventor,
technologist and social media provocateur, Musk’s life goal is to transform humanity into a
‘multi-planetary’ species. Bringing together sustainable approaches to energy production
(Solar City), automotive development and production (Tesla) and space transport (Space X)
Musk plans to turn humans into space colonisers. “I would like to die thinking that
humanity has a bright future” he has said, “If we can solve sustainable energy and be well
on our way to becoming a multi planetary species with a self-sustaining civilization on
another planet – to cope with a worst case scenario happening and extinguishing human
consciousness – then... I think that would be really good.”
Entrepreneurs with grand visions are not necessarily news. However, Musk’s overcoming
hurdles to achieve massive success, a propensity for bold goals, coupled with a radical
reshaping of manufacturing trends has captured the attention of the media, the public and
many world leaders. His audaciousness is illustrated by the 2017 bet he made with
Atlassian’s Mike Cannon-Brookes. Musk claimed he could install and have operational
100mega watts of battery storage in South Australia within 100 days, thus addressing major
power concerns that had caused significant outages in the state. Not only did Musk win this
bet, building world’s largest lithium-ion battery farm in 60 days as opposed to 100, but two
years later it has significantly increased the stability of the State power supply.
While Tesla and Space X have emerged onto the global stage, Musk himself has become a
public figure of renown, and his leadership style has sometimes been seen as controversial.
Musk has helped Tesla and Space X to become a major force to be reckoned with in the
automotive and space industries, while also embroiling them in lawsuits and a public
backlash over his polarising ways of conducting business.
Elon Musk: The New Industrialist
MGMT20001 Organisational Behaviour
2
Tesla and SpaceX: accelerating the world toward sustainable energy and new frontiers
Tesla
Tesla Motors Inc was incorporated on July 1st 2003, by two engineers, Martin Eberhard and
Marc Tarpenning (the name itself was inspired by inventor and electric motor pioneer
Nikola Tesla). Tesla began with the idea of developing a fully electric sports car, one that
was not only fast but was also aesthetically pleasing. The two engineers sought external
investors to turn their vision into reality. Well connected, and cashed-up with his recent
$180 million earned from the sale of PayPal, Musk became one of Tesla first investors,
contributing US$6.5 million. He then was appointed Chairman of the Board of Tesla in April
2004.
Tesla builds all-electric cars that not only push the limits of technology but are objects of
beauty. For Tesla, being a start-up full of Silicon Valley engineers predominantly experienced
in software rather than hardware design, it was important for the company to start small
and learn along the way. Eberhard described the thinking behind this strategy as follows:
“Cell-phones, refrigerators, colour TVs, they didn’t start off by making a low-end product for
the masses. They were relatively expensive, for people who could afford it.” Tesla entered
the market in 2008 with a high priced, low volume luxury product, the Roadster. Tesla
followed with a mid-priced sedan, the Model S (launched in 2009) and the lower-priced
vehicle, Model X (launched in 2015).
Tesla’s path was not always even, but in 2010 Tesla became the first US Auto car maker to
go public since Ford Motor Company in 1956. Then on January 22nd 2020, it became the
second most valuable automotive company in the world, reaching a market value of
USD$102.7 billion.
Space X
SpaceX designs manufactures and launches advanced rockets and spacecraft. Founded in
2002 to revolutionise space technology, with the ultimate goal of enabling people to live on
other planets. Musk formed SpaceX after immersing himself in the space aeronautics
industry in California. At first, the collection of ex-NASA and academics were just happy to
have a rich guy around who would give them money, but they soon realised that he not only
had the funds to pursue his goals, but he had the drive and the capacity to achieve them.
It began in a 75,000-foot factory in a suburb of Los Angeles. Musk soon transformed the
space into his signature factory aesthetic; gloss epoxy over the concrete floors, white colour
scheme designed to make the space seem clean and cheerful. Desks were interspersed with
machinery, so the ivy-league educated scientists and engineers were mixed in with the
welders and machinists building hardware.
SpaceX is the only private company capable of returning a spacecraft from low Earth orbit,
which it first accomplished in 2010. The company made history again in 2012 when its
Dragon spacecraft became the first commercial spacecraft to deliver cargo to and from the
International Space Station. As one of the world’s fastest-growing providers of launch
services, SpaceX has secured over $12 billion on contract with both commercial satellite
operators and US government missions. SpaceX is now working on a next generation of fully
Elon Musk: The New Industrialist
MGMT20001 Organisational Behaviour
3
reusable launch vehicles that will be the most powerful ever built, capable of carrying
humans to Mars.
Musk’s strategy: Build it and they will buy
Musk’s ‘Putting humans on Mars’ talk can sound to some as farfetched and slightly crazy,
but it is a unique rallying cry for all his businesses. This sweeping goal of interplanetary
transformation is a unifying principle for all his companies. Employees are aware that they
are trying to achieve the impossible all day every day. When things are tough, when Musk
pushes them to the limit, it is understood that this is all part of the ‘Mars Agenda’.
One element that sets Musk’s companies apart from others is its approach to
manufacturing. Musk has taken industries, like aerospace and automotive, that were once
seen as shining lights in the American economy, but have recently been thought of as old
fashioned or failing, and has recast them as something new and fantastic. Central to this is
the idea that Tesla and Space X are highly vertically integrated. Whenever possible, Musk’s
companies make things from scratch and try and rethink all that the aerospace, automotive
and solar industry accepted as convention. SpaceX aimed to build reusable rockets, carrying
supplies to the International Space Station. Perfecting this technology has the potential to
push some of the established players out of the market, while making the US the world
leader in taking humans and cargo into space. For Tesla, Musk revamps how cars are
manufactured and sold, simultaneously building a worldwide fuel distribution network.
When researching Musk found that most big automakers don’t even build their vehicles
anymore. The days of Henry Ford having materials shipped to his Michigan factory had long
passed. Where big companies only internally managed engine research, sales, marketing
and final assembly, Tesla aimed to keep all processes in house.
Musk had first shared his ideas on fully automating factories with Tesla staff in a meeting in
2016. He told them that he had recently had a dream where he had envisioned the factory
of the future; factory where machines built everything at superhuman speed, with parts
moving along on a series of conveyor belts, being delivered in just the right place at the
precisely the right time. He would soon come to define this concept as ‘the machine that
builds the machine.’
Tesla has also radically reshaped the sales approach. Instead of selling through dealerships,
they took the non-traditional route of selling directly to car dealerships would block the rich
feedback that would be gained from engaging directly with the end users. For a young start-
up like Tesla, whose sole strategy was based on constant improvement to make each
successive design better than the prior one, feedback was critical. Thus, Tesla decided to
embrace a direct-to-consumer model where customers could inspect and purchase cars
through one if their retail stores usually located in prominent shopping malls or order online
via Tesla’s website.
Musk is an inventor, celebrity businessman and industrialist, able to take big ideas and turn
them into big products. He’s employing thousands of people to forge metal in American
factories, along with global ones, at a time when manufacturing was thought to be a dying
sector.
Elon Musk: The New Industrialist
MGMT20001 Organisational Behaviour
4
Culture at Tesla and Space X: Trust me, it will be worth it
Elon Musk’s assistant, Mary-Beth Brown, was integral to the development of culture at
Space X. She chose key items, like red waste bins that looked like spaceships while
establishing the communication tone. Often heard to say “How are you dear?” to the largely
young male workforce ,she assumed a caring role. She collected the weird and wacky emails
that were sent to Musk, sending out a weekly ‘Kook of the Week’ missive to make people
laugh.
Most of SpaceX’s early employees were young, male over achievers personally recruited by
Musk. Competitive but extremely hard-working, there was an ‘all hands on deck’
philosophy. Musk was often in the middle of it, getting covered in epoxy or oil and he
physically engaged with designs in testing. SpaceX was a small, tight-knight family, that saw
themselves as up against the rest of the world. In 2002 it was one empty warehouse, but 12
months later it looked like a real rocket factory. Engines were being fed into an assembly
line where machinists connected them to the body of rockets. Cranes were on the floor to
move obstacles. It was as if Henry Ford met Star Wars. Preparing to film Marvel’s Iron Man
in 2007, actor Robert Downey Jr paid a visit to SpaceX. He thought it looked like a giant
hardware store, with enthusiastic employees zipping around, white collar and blue collar
workers sharing a genuine excitement for what they were doing.
Musk holds high expectations of himself and of those around him, including a strong vision
about how a company should operate. His emails have become famous, both within his
companies and in the broader media, as he sent off missive defining everything from dealing
with external parties to use of corporate jargon. In one famous example he wrote:
There is a creeping tendency to use made up acronyms at SpaceX. Excessive use
of made up acronyms is a significant impediment to communication and
keeping communication good as we grow is incredibly important.
Individually, a few acronyms here and there may not seem so bad, but if a
thousand people are making these up, over time the result will be a huge
glossary that we have to issue to new employees. No one can actually
remember all these acronyms and people don’t want to seem dumb in a
meeting, so they just sit there in ignorance. This is particularly tough on new
employees.
12-hour days, six day work weeks were the norm, with many working even longer than that.
Respites occasionally come after 8pm, when Musk allowed everyone to play first-person
shooter video games from their work computer. As the time approached the sound of
electronic gun cartridges could be heard across the factory floors, with Musk himself often
winning games. He was, according to some, “alarmingly good.”
He demanded that people work on Saturdays and Sundays and sleep under their desks till
tasks were completed. And when someone said that they needed to see their loved ones, he
would respond with, “I would tell those people they will get to see their families a lot when
we go bankrupt.” Musk’s belief as summed up in one of his tweets; “There are way easier
places to work, but nobody ever changed the world on 40 hours a week.” When an
employee missed a company event to be present for the birth of his child, Musk allegedly
Elon Musk: The New Industrialist
MGMT20001 Organisational Behaviour
5
notified him via email, “I am extremely disappointed. You need to figure out where your
priorities are. We’re changing the world and changing history, and you either commit or you
don’t.” Another employee, however, was overheard by Musk venting about how he had
lost his glasses and never had time to go collect a new pair. Two hours later, Mary-Beth
Brown appeared with an appointment card to see a Lasik eye surgeon. Musk had not only
booked him an appointment but paid for the surgery. “Elon can be very demanding, but
he’ll make sure all the obstacles in your way are removed.”
Most employees were thrilled to part of Musk’s multi-planetary, world-changing adventure.
But there were times he did push them too far. The engineers often fumed when Musk
claimed credit in the press for designing SpaceX or Tesla products almost singlehandedly.
Musk also hired a documentary crew to follow him around, grating on those who were hard
at work. Employees who sometimes made suggestions about potential design flaws were
ignored. Those who were not ‘management’ felt that they were not seen as assets to the
company, and if they spoke up were forced out or blamed for things they hadn’t done. It
was the ‘kiss of death’ to suggest Elon wasn’t 100% correct.
A former female executive described how Musk berated her before her peers. “He was
shouting that I didn’t know what I was doing, that I was an idiot, that he’s never worked
with someone so incompetent.” A senior engineering executive revealed that those close to
him “called it ‘the idiot bit.’” If you said something wrong or made one mistake or rubbed
him the wrong way, he would decide you’re an idiot and there was nothing that could
change his mind.” A former executive recounted, “If you told him that you made a particular
choice because ‘it was the standard way things had always been done,’ he’d kick you out of
the meeting fast. He’d say, ‘I never want to hear that phrase again. What we have to do is
f*ing hard and half-assing things won’t be tolerated.’” Musk’s managerial style did not suit
all employees. During the production of the Model 3 at Tesla, approximately 36 vice
presidents and other high-profile staff left the company. These included leaders from a
diverse range of departments – finance, engineering, manufacturing, human resources and
communications.
Others liked the camaraderie that this culture fostered. “The best part working for Tesla is
they hired really good people most of the time, and if you’re not really good, you get let go.
You have to believe in what you’re doing in those buildings or you’re not going to have a
spot tomorrow. I think that was the best part because it took me back to the camaraderie I
had in the military.” It wasn’t just the culture that had been cultivated which drew people
in. They also resonated with the vision of the company. "This is the future," said Branton
Phillips, a material handler at the Fremont facility in California. "I like the whole image, what
we're doing, the mission. We're making history."
Management and governance: Not all smooth sailing
Not all staff, particularly engineers, were on board with Musk’s ideas about manufacturing
everything in house. In meetings, if someone questioned the merits of Musk’s approach,
Musk would contact the person’s manager and ask for the individual to be re-assigned to
another project, terminated, or no longer be invited to the meetings. Some senior
executives went out of their way to exclude those who resisted Musk’s ideas. “If you were
the kind of person who was likely to push back, you got disinvited,” noted a former
Elon Musk: The New Industrialist
MGMT20001 Organisational Behaviour
6
executive, “because VPs [Vice-Presidents] didn’t want anyone pissing off Elon. People were
scared that someone would question something.”
Musk personally took to dealing with the challenges with production. He was the one who
favoured the manufacturing process and the idea autonomous technology over human
workers to produce cars and rockets. He spent all-nighters in the company’s Fremont,
California manufacturing plant looking to personally troubleshoot challenges arising on the
production lines. He took to sleeping on a small couch or under a desk, in the corner of a
little office in order to always stay close to the action.
People who work for Musk are often seen as ammunition; used for a specific purpose and
then discarded. The most prominent example occurred in 2014 when he fired his loyal
assistant of over a decade, Mary-Beth Brown. After acting as what was essentially his ‘right-
hand man’ Brown went to Musk to ask he be compensated on par with some of the more
senior executives in his companies. She argued she was scheduling, doing public relations
work and often making critical business decisions on his behalf. Musk suggested she should
take a couple of weeks off and he would take on her duties to see just how onerous they
were. When Brown returned, Musk claimed that he didn’t need her anymore and let her go.
Problems also arose within the Musk’s leadership teams. At Tesla, after consistent
challenges and delays with getting their first prototypes the relationship between Musk and
founder Martin Eberhard began to sour. While Musk and Eberhard had battled for years
over designs for the car, when the cost figures began to emerge it looked to Musk that
Eberhard had grossly mismanaged the company by allowing costs for parts to skyrocket.
Musk had invested $6.5 million in the company; he was the largest shareholder and
chairman and began to wield his considerable power.
On July 19th 2006, Tesla hosted the ‘Signature 100’ launch event in an airport hangar in
Santa Monica, California. The name of the event itself reflected the first 100 limited edition
Roadsters to be sold to the first hundred buyers on the night. The event was attended by
350 highly influential and wealthy people – including the likes of former actor and then
governor of California, Arnold Schwarzenegger and former Chairman and CEO of The Walt
Disney Company, Michael Eisner.Error! Bookmark not defined. While both Musk and
Eberhard were invited to give speeches during the event, it was Eberhard who attracted the
attention of the press. Stephen Casner – a former colleague of Eberhard at Packet Design
and an electric car aficionado who was one of the Signature 100 buyers at the launch event
noted: “Elon's ability to speak in public and convey the sense of the company was not nearly
as good as what Martin had done. I don't know if it's a matter of what language is used or
colourful phrases. He just didn't seem to be nearly as effective in making people excited and
believe in this trend.” Eberhard, as a result of his influential speech, was the one sought
after for interviews from print, radio and TV. He was the voice of Tesla.
After the event, press coverage continued to focus on Eberhard. The New York Times (NYT)
overlooked Musk and incorrectly attributed the title of Chairman of Board of Tesla to
Eberhard. And in a follow-up opinion piece titled, ‘Go Speed Racer,’ the NYT singled
Elon Musk: The New Industrialist
MGMT20001 Organisational Behaviour
7
Eberhard out as the one leading the team at Tesla for “making their car [the Roadster] the
newest hot gadget, a status symbol.” This did not sit well with Musk, who felt that he was
not being given due recognition. He wrote, in an email to Mike Harrigan, then VP of
Customer Service and Support:
The way that my role as been portrayed to date, where I am referred to merely as
'an early investor' is outrageous. That would be like Martin [Eberhard] being
called an 'early employee.
Apart from me leading the Series A & B and co-leading the Series C, my influence
on the car itself runs from the headlights to the styling to the door sill to the
trunk, and my strong interest in electric transport predates Tesla by a decade.
Martin should certainly be the front and centre guy, but the portrayal of my role
to date has been incredibly insulting.
I'm not blaming you or others at Tesla — the media is difficult to control.
However, we need to make a serious effort to correct this perception.”
In August 2007, while on his way to give a speech at a conference organised by the Motor
Press Guild, Eberhard received a call from Musk. Eberhard was advised that the Board had
decided to replace him as the CEO with Michael Marks, former CEO of electronic goods
supplier, Flextronics. It was revealed that there had been a secret board of directors
meeting, including Musk as the chairman of the board, where they had decided that while
Eberhard was an important staff member at Tesla, he wasn’t the right person to lead Tesla
forwards as the CEO.
"There was no discussion," Eberhard later disclosed in an interview. "I didn't get to hear
what they said. I didn't get to defend myself. I felt totally stranded.” Mike Harrigan echoed
Eberhard’s view. “[Musk] is the kind of boss where day to day you don't know if you have a
job or not. Once he's convinced that you can't do the job, there's no way you can convince
him back again. That happened many times to many people, and that's what happened with
Martin [Eberhard]. Once he determined that Martin couldn't be the CEO of Tesla any longer,
that was it." Eberhard’s removal led to a period of leadership instability for Tesla as Marks
(Eberhard’s replacement as CEO) was shortly replaced by Ze'ev Drori, former CEO of car-
alarm maker Clifford Electronics, who was in turn replaced by Musk himself in October
2008. Musk, the largest shareholder, was then CEO and Chairman.Error! Bookmark not
defined. In November 2007, a few months after having been demoted and restricted to
focus only on product development, Eberhard resigned from the company.
Musk versus the US Securities and Exchange Commission (SEC)
On August 7th 2018, Musk claimed to have secured funding to take Tesla private [See Figure
1]. At $420 per share, the group of Middle Eastern investors financing the initiative would be
buying nearly $80 above the then market price (Tesla was trading at US$341.99).
Elon Musk: The New Industrialist
MGMT20001 Organisational Behaviour
8
Figure 2: Source twitter.com/elonmusk
The following month, the SEC charged Musk for securities fraud, arguing this tweet had no
basis in fact and thus was misleading for the market. As a result of the tweet, Tesla’s shares
had surged 13.3%. The SEC reported that Musk did not have any sources to finance this
acquisition nor had he looked at the background work required before making such an
announcement, such as identifying the regulatory approvals that were necessary.
The SEC proposed that Musk be barred from assuming the role of officer or director of a
public company, a settlement that Tesla rejected after Musk threatened to resign. The news
of the rejected deal caused Tesla’s stock to reduce in value by 14 per cent the following day,
causing the board and Musk to quickly accept a more onerous deal. The stricter terms
included Musk having to relinquish his title as the Chairman of Tesla for three years and pay
a personal US$20 million fine. He was permitted to remain as the company’s CEO but as part
of the settlement, Tesla was also required to have procedures in place to control Musk’s
communications. Along with Musk, Tesla was additionally charged US$20 million. In
December 2008 Musk was interviewed by US 60 Minutes and when asked about the lawsuit
“I want to be clear: I do not respect the SEC, I do not respect them.”
In 2019 Musk demonstrated that he had not necessarily learned from his previous rogue
tweeting experience. Musk tweeted on February 19th that Tesla would make around
500,000 cars in 2019, after Tesla said in its fourth-quarter earnings letter that it expected to
deliver between 360,000 and 400,000 vehicles in 2019. Four hours later, Musk corrected the
projection in a new tweet, saying Tesla would by the end of 2019 reach a rate of production
that would result in around 500,000 cars if maintained for a full year.
The SEC said in a court filing that Musk had violated the terms of his settlement with the
agency by not receiving approval from Tesla before publishing his tweet about vehicle
production. Musk’s settlement with the SEC requires Musk to receive approval from Tesla
before tweeting information about the company that could be relevant to shareholders.
Musk’s attorneys argued, however, the tweet about vehicle production did not meet that
criterion since it was close to projections that had already been made.
At a court hearing on April 4th 2019, a lawyer for the SEC said that if Musk were found in
contempt, the agency would ask the judge to require him to submit regular reports about
Elon Musk: The New Industrialist
MGMT20001 Organisational Behaviour
9
his Twitter use and to pay a series of progressively higher fines for any future violations.
Later that month Musk and the SEC reached a second agreement, under the terms Musk
agreed not to tweet or otherwise disseminate information about Tesla’s finances,
production numbers or certain other information without a lawyer’s approval.
2020 proved to be another year of ups and down for Elon Musk. In May he and his partner
welcomed a son, Musk’s seventh, named X Æ A-12. Musk then managed to get all the wrong
type of press attention during the Covid-19 pandemic when he firstly claimed on twitter that
children were immune, then arguing there would be “close to zero new cases in US by the
end of April.” More worryingly, Musk began a ‘feud’ with the Alameda Public Health
Officials, claiming essential lockdowns of Tesla plants were ‘fascist’ and reopening against
public health advise. President Donald Trump tweeted his support for reopening the
Fremont plant and Musk threatened to move all his manufacturing out of California,
jeopardising 10,000 jobs, as retaliation to the lockdown. Predictably, Tesla workers began
to contract the virus. Even die-hard Musk fans began to question Musk’s continued
insistence that he knows best, especially when his actions were jeopardising worker and
public health.
Where will the future lead?
Tesla has surprised many to be remarkably successful. Error! Bookmark not defined. Its
achievements in designing and selling electric vehicles have prompted other major car
manufacturers to take notice. Ford recently launched its version of a fully electric vehicle
the Mustang Mach-E and Porsche released the Taycan. General Motors plans to have
twenty models released worldwide by 2023. It even has plans to build a US$2.3 billion
battery factory in Lordstown, Ohio - much like a factory that Tesla has already in
construction. Tesla has begun to achieve its aims of transforming the automotive industry,
making it more sustainable while also demonstrating the renewed potential of
manufacturing in the USA.
SpaceX remains a private company. In March 2020 SpaceX launched its latest batch of 60
satellites for its Starlink constellation, aimed at beaming internet coverage down to Earth.
The company used its’ Falcon 9 rocket for the job: a vehicle that’s been to space and back
four times before. This feat, a private space company that has built reusable rockets, was
unthinkable 15 years ago. May 2020 saw SpaceX launch the Crew Dragon, the first time a
commercial space company has carried humans into orbit around Earth.
No one can dispute the achievements of Elon Musk. Tesla and SpaceX have radically
reshaped their respective industries in under two decades. But SpaceX and Tesla are
expressions of Musk, their foibles originate from him, as do their successes. His manic
energy and hands-on approach mean that employees love him, fear him and give up their
lives for him (often simultaneously.) There are two Elon Musks: There is the entrepreneur
and the risk taker and the creator of things and the attention seeking bad boy who is willing
to sacrifice those around him to achieve his, albeit sometime altruistic, goals. Musk is
described as ‘religious’ – whether it be about space or cars or climate change. And the world
needs this type of evangelism to instigate real change.
Elon Musk: The New Industrialist
MGMT20001 Organisational Behaviour
10
Some, however, question the influence Musk with his vast wealth, connections and media
platform, and technology companies in general, have. Technology broadcaster Kara Swisher
says “If you live a life of extreme wealth—no one’s been this rich on the planet—there are
no consequences. Why would you change your behaviour until you’re made to, and then,
who is going to make you?”
The experience of those who work with and for Musk, employees, shareholders, the Boards
has rarely been smooth and without drama. What might be achieved if Musk manages to
control his more outlandish tendencies? He may one day be tweeting from Mars.
Elon Musk: The New Industrialist
MGMT20001 Organisational Behaviour
11
Source Material
Baer. D. (2014, November 11). The Making of Tesla: Invention, Betrayal, And The Birth Of The Roadster.
Business Insider. Retrieved from https://www.businessinsider.com
Bariso,J. (2017,August 30). This Email From Elon Musk To Tesla Employees Describes What Great
Communication Looks Like. Inc. Retrieved from www.inc.com
BBC News. (2020, May 6). X Æ A-12: Elon Musk and Grimes confirm baby name. Retrieved from
https://www.bbc.com/news/world-us-canada-52557291
Chatterjee, R., Pierson, B., Sage, A. (2019, April 26). Tesla’s Elon Musk, SEC Again Ask For More Time To Reach
Deal Over CEO’s Twitter Use. Reuters. Retrieved from https://www.reuters.com/article/us-tesla-musk-sec/
DeBord, M. (2019, December 8). Tesla Is Revamping Its Relationship With Owners Of The Original Roadster.
Here’s A Closer Look At Tesla’s First Car. Business Insider. Retrieved from amp.businessinsider.com
Draper, W. H. D., (2011). From International to Global. The StartUp Game: Inside the Partnership of Venture
Capitalists and Entrepreneurs (pp.163-165). New York, USA: Palgrave Macmillan.
Duhigg,C. (2018, December 13).Dr. Elon and Mr. Musk: Life Inside Tesla’s Production Hell. Wired. Retrieved
from www.wired.com
Eidelson, J., Hull, D., Lippert, J., Randall, T. (2018, July 13). Hell For Elon Musk Is A Mid-Sized Sedan. Bloomberg.
Retrieved from https://www.bloomberg.com/news/features/
Faux, Z., Robinson, M. (2019, March 13). When Elon Musk Tried To Destroy A Tesla Whistleblower. Bloomberg.
Retrieved from https://www.bloomberg.com
Ferenbacher, K. (2016, June 7). Tesla Quest To Build The Machine Behind The Machine. Fortune. Retrieved
from https://fortune.com/2016/06/06/teslas-the-machine-behind-the-machine/
Gregersen, E., Schreiber, B.A. (2018, October 4). Tesla, Inc. Britannica. Retrieved from
https://www.britannica.com/topic/Tesla-Motors
Gupta, P. & Spicer. J. (2010, June 29). Carmaker Tesla stock zooms 40% on first day. Reuters. Retrieved from
https://www.reuters.com
Hamilton, I.A. (2018, June 22). Tesla ‘Whistleblower’ Says Elon Musk Is Waging War On Him For Leaking
Information To Business Insider. Business Insider. Retrieved from www.businessinsider.com.au
Higgins. T (2020, January 22). Tesla Tops Volkswagen to Become Second-Most-Valuable Auto Maker. The Wall
Street Journal. Retrieved from www.wsj.com
Horowitz, J. (2018, September 28). SEC Sues Elon Musk For His Allegedly Misleading Tweets. CNN. Retrieved
from https://money.cnn.com/2018/09/27/technology/
Kharpal, A. (2018, October 1). Tesla Shares Surge 17 Percent After SEC Settlement. CNBC. Retrieved from
https://www.cnbc.com
Kolodny, L. (2018, May 3). Tesla Email Warns Employees: Stop Leaking. CNBC. Retrieved from www.cnbc.com
Lopez, L. (2018, September 5). Tesla employees describe what it's like to work in the gigantic Gigafactory.
Business Insider. Retrieved from https://www.businessinsider.fr/us/Lopez, L. (2018, June 4). Internal
Documents Reveal Tesla Is Blowing Through An Insane Amount of Raw Material And Cash to Make Model 3s,
And Production is Still A Nightmare. Bloomberg. Retrieved from https://www.businessinsider.com
Matousek, M. (2018, October 31). Tesla Is Experiencing A Painful Year – Here’s Everything That Has Gone On
So Far. Business Insider. Retrieved from www.businessinsider.com
Matousek, M. (2019, September 5). 9 Ex-Tesla Employees Reveal The Best Part of Working There. Business
Insider. Retrieved from www.businessinsider.com.au
Matousek, M. (2018, October 27). US Officials Are Investigating Whether Tesla Misled Investors About Model 3
Production: Report. Business Insider. Retrieved from https://www.businessinsider.com.au
Matousek, M. (2019, March 28). Elon Musk And The SEC Are In A Fierce Battle Over One Of Musk’s Tweets –
Here's What You Need To Know About Their Dispute. Business Insider. Retrieved from
https://www.businessinsider.com.au
Morse, J. (2020, July 1.) Elon Musk's coronavirus self-own to go down in the history of self-owns. Retrieved
from https://mashable.com/article/elon-must-coronavirus-self-own/
Muir, H. (2020, July 30). SpaceX: Crew Dragon is returning to Earth – here’s when to hold your breath.
Retrieved from
https://theconversation.com/spacex-crew-dragon-is-returning-to-earth-heres-when-to-hold-your-breath-
143500
Musk. E. (2018, August 24). Staying Public. Tesla. Retrieved from https://www.tesla.com
Elon Musk: The New Industrialist
MGMT20001 Organisational Behaviour
12
Musk, E [@elonmusk] (2018, November 26). There are way easier places to work, but nobody ever changed
the world on 40 hours a week [Tweet]. Retrieved from
https://twitter.com/elonmusk/status/1067173497909141504
Musk, E. [@elonmusk]. (2018, April 13). Yes. Excessive Automation At Tesla Was A Mistake. To Be Precise, My
Mistake. Humans Are Underrated [Tweet]. Retrieved from
https://twitter.com/elonmusk/status/984882630947753984
Naughton, K. (2020, January 24). Tesla’s Rivals Brace For Electric Armageddon. Australian Financial Review.
Retrieved from https://www.afr.com/policy/energy-and-climate
New York Times Go Speed Racer. (2006, July 23). The New York Times. Retrieved from
https://www.nytimes.com
O’Kane, S. (2019, March 13). Tesla Allegedly Hacked, Spied On, And Followed Gigafactory Whistleblower:
Report. The Verge. Retrieved from www.theverge.com
O’Leary, L. (2020, May 22). What Kara Swisher Thinks Is Going On in Elon Musk’s Brain. Retrieved from
https://slate.com/technology/2020/05/kara-swisher-elon-musk-interview.html
Popple, R. (2020). Linked in Profile. Retrieved January 4, 2020, from https://www.linkedin.com/in/rpopple
Randall, T. (2018, June 8). Inside Tesla’s Model 3 Factory. Bloomberg. Retrieved from
https://www.bloomberg.com/news/features
Rao. L (2010, January 30). Tesla $100M IPO: Losses Expected Until At Least 2012. Musk Taking $1 A Year.
Techcrunch. Retrieved from https://techcrunch.com/
Rosenbaum, E. (2018, June 13). Tesla CFO Deepak Ahuja Has Been Through One Of The Worst Rounds Of Tesla
Layoffs Before. CNBC. Retrieved from https://www.cnbc.com
Reuters, (2019, April 27). Tesla's Elon Musk reaches deal with SEC over Twitter use. Retrieved from
https://www.theguardian.com/technology/2019/apr/26/tesla-elon-musk-sec-twitter-deal
Reynolds, K. (2008, January 23). 2008 Tesla Roadster First Drive. Motor Trend. Retrieved from
www.motortrend.com
Salinas, S., Wang, C. (2018, October 4). Elon Musk Mocks SEC As ’Shortseller Enrichment Commission’ Days
After Settling Fraud Charges. CNBC. Retrieved from https://www.cnbc.com
Shaban, H. (2018, September 17). Elon Musk: Tesla Has Moved From Production Hell to Delivery Logistics Hell.
The Washington Post. Retrieved from https://www.washingtonpost.com/technology/
Shephardson, D. (2020, January 18). US Will Look At Sudden Acceleration Involving 500,000 Tesla Vehicles.
Washington Post. Retrieved from www.washingtonpost.com
National Highway Traffic Safety Administration. (2020). About Us. Retrieved February 8, 2020, from
https://www.nhtsa.gov/about-nhtsa
SpaceX. https://www.spacex.com/about
Squatriglia, C. (2015, September 29).Tesla’s Model X Is Here, And It’s As Awesome As We Hoped. Wired.
Retrieved from www.wired.com/2015/09
Squatriglia. C. (2009, November 6). Tesla Founder Sues Tesla’s CEO. Wired. Retrieved from
https://www.wired.com
Squatriglia, C. (2009, March 26). First Look At Tesla’s Stunning Model S. Wired. Retrieved from
www.wired.com/2009/03
Squatriglia, C. (2015, September 29).Tesla’s Model X Is Here, And It’s As Awesome As We Hoped. Wired.
Retrieved from www.wired.com/2015/09
Stewart, J.B. (2018, October 2). Elon Musk’s Ultimatum To Tesla: Fight The S.E.C., Or I Quit. The New York
Times. Retrieved from https://www.nytimes.com
Tesla. (2019). About Us. Retrieved September 4, 2019, from https://www.tesla.com/about
Thornhill, J. (2020, February 28). Two Years On, Elon Musk’s Big Battery Bet Is Paying Off in Australia.
Bloomberg. Retrieved from https://www.bloomberg.com/news/articles/2020-02-28/two-years-on-musk-s-big-
battery-bet-is-paying-off-in-australia
Trudell, C., (2019, March 11). Ex-Tesla Worker Says Take Private Bid Was Known Pre-Tweets. Bloomberg.
Retrieved from https://www.bloomberg.com/news/articles/
Vance, Ashley (2015). Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future. New York, NY, USA:
HarperCollins.
Vincent, J. (2015, May 12). Elon Musk Denies Scolding Employee For Taking Time Off To Witness Childbirth.
The Verge. Retrieved from www.theverge.com
Wald. M. L. (2006, July 19). Zero to 60 in 4 Seconds, Totally From Revving Batteries. The New York Times.
Retrieved from www.nytimes.com
Elon Musk: The New Industrialist
MGMT20001 Organisational Behaviour
13
Wang, C. (2019, April 26th). Elon Musk makes deal with SEC not to discuss Tesla’s finances without a lawyer’s
approval. Retrieved from https://www.cnbc.com/2019/04/26/elon-musk-and-sec-reach-agreement-over-
tesla-ceos-use-of-twitter.html
Wasik. J.F. (2017, December 30). Tesla the Car Is a Household Name. Long Ago, So Was Nikola Tesla. The New
York Times. Retrieved from https://www.nytimes.com
MGMT20001 Organisational Behaviour
1
Elon Musk: The New Industrialist
On March 10th 2020 Elon Musk, the South African-born American entrepreneur tweeted to
his 32 million followers “Congratulations Tesla team on making our 1,000,000th car!!” The
tweet, including a picture of a team of workers surrounding a bright red car, celebrated the
company becoming the first manufacturer to pass this electric car manufacturing milestone.
It was a momentous moment for Musk and Tesla, the culmination of a 17-year journey and
part of a broader aim to revolutionise the world’s relationship with sustainable energy and
transport.
Figure 1: Source
twitter.com/elonmusk
Tesla is only one piece of 48-year-old Musk’s suite of companies aiming to radically reshape
global manufacturing. Making his fortune in his 20s developing and later selling online guide
Zip2, Musk went on to be one of the early creators of PayPal. An engineer, inventor,
technologist and social media provocateur, Musk’s life goal is to transform humanity into a
‘multi-planetary’ species. Bringing together sustainable approaches to energy production
(Solar City), automotive development and production (Tesla) and space transport (Space X)
Musk plans to turn humans into space colonisers. “I would like to die thinking that
humanity has a bright future” he has said, “If we can solve sustainable energy and be well
on our way to becoming a multi planetary species with a self-sustaining civilization on
another planet – to cope with a worst case scenario happening and extinguishing human
consciousness – then... I think that would be really good.”
Entrepreneurs with grand visions are not necessarily news. However, Musk’s overcoming
hurdles to achieve massive success, a propensity for bold goals, coupled with a radical
reshaping of manufacturing trends has captured the attention of the media, the public and
many world leaders. His audaciousness is illustrated by the 2017 bet he made with
Atlassian’s Mike Cannon-Brookes. Musk claimed he could install and have operational
100mega watts of battery storage in South Australia within 100 days, thus addressing major
power concerns that had caused significant outages in the state. Not only did Musk win this
bet, building world’s largest lithium-ion battery farm in 60 days as opposed to 100, but two
years later it has significantly increased the stability of the State power supply.
While Tesla and Space X have emerged onto the global stage, Musk himself has become a
public figure of renown, and his leadership style has sometimes been seen as controversial.
Musk has helped Tesla and Space X to become a major force to be reckoned with in the
automotive and space industries, while also embroiling them in lawsuits and a public
backlash over his polarising ways of conducting business.
Elon Musk: The New Industrialist
MGMT20001 Organisational Behaviour
2
Tesla and SpaceX: accelerating the world toward sustainable energy and new frontiers
Tesla
Tesla Motors Inc was incorporated on July 1st 2003, by two engineers, Martin Eberhard and
Marc Tarpenning (the name itself was inspired by inventor and electric motor pioneer
Nikola Tesla). Tesla began with the idea of developing a fully electric sports car, one that
was not only fast but was also aesthetically pleasing. The two engineers sought external
investors to turn their vision into reality. Well connected, and cashed-up with his recent
$180 million earned from the sale of PayPal, Musk became one of Tesla first investors,
contributing US$6.5 million. He then was appointed Chairman of the Board of Tesla in April
2004.
Tesla builds all-electric cars that not only push the limits of technology but are objects of
beauty. For Tesla, being a start-up full of Silicon Valley engineers predominantly experienced
in software rather than hardware design, it was important for the company to start small
and learn along the way. Eberhard described the thinking behind this strategy as follows:
“Cell-phones, refrigerators, colour TVs, they didn’t start off by making a low-end product for
the masses. They were relatively expensive, for people who could afford it.” Tesla entered
the market in 2008 with a high priced, low volume luxury product, the Roadster. Tesla
followed with a mid-priced sedan, the Model S (launched in 2009) and the lower-priced
vehicle, Model X (launched in 2015).
Tesla’s path was not always even, but in 2010 Tesla became the first US Auto car maker to
go public since Ford Motor Company in 1956. Then on January 22nd 2020, it became the
second most valuable automotive company in the world, reaching a market value of
USD$102.7 billion.
Space X
SpaceX designs manufactures and launches advanced rockets and spacecraft. Founded in
2002 to revolutionise space technology, with the ultimate goal of enabling people to live on
other planets. Musk formed SpaceX after immersing himself in the space aeronautics
industry in California. At first, the collection of ex-NASA and academics were just happy to
have a rich guy around who would give them money, but they soon realised that he not only
had the funds to pursue his goals, but he had the drive and the capacity to achieve them.
It began in a 75,000-foot factory in a suburb of Los Angeles. Musk soon transformed the
space into his signature factory aesthetic; gloss epoxy over the concrete floors, white colour
scheme designed to make the space seem clean and cheerful. Desks were interspersed with
machinery, so the ivy-league educated scientists and engineers were mixed in with the
welders and machinists building hardware.
SpaceX is the only private company capable of returning a spacecraft from low Earth orbit,
which it first accomplished in 2010. The company made history again in 2012 when its
Dragon spacecraft became the first commercial spacecraft to deliver cargo to and from the
International Space Station. As one of the world’s fastest-growing providers of launch
services, SpaceX has secured over $12 billion on contract with both commercial satellite
operators and US government missions. SpaceX is now working on a next generation of fully
Elon Musk: The New Industrialist
MGMT20001 Organisational Behaviour
3
reusable launch vehicles that will be the most powerful ever built, capable of carrying
humans to Mars.
Musk’s strategy: Build it and they will buy
Musk’s ‘Putting humans on Mars’ talk can sound to some as farfetched and slightly crazy,
but it is a unique rallying cry for all his businesses. This sweeping goal of interplanetary
transformation is a unifying principle for all his companies. Employees are aware that they
are trying to achieve the impossible all day every day. When things are tough, when Musk
pushes them to the limit, it is understood that this is all part of the ‘Mars Agenda’.
One element that sets Musk’s companies apart from others is its approach to
manufacturing. Musk has taken industries, like aerospace and automotive, that were once
seen as shining lights in the American economy, but have recently been thought of as old
fashioned or failing, and has recast them as something new and fantastic. Central to this is
the idea that Tesla and Space X are highly vertically integrated. Whenever possible, Musk’s
companies make things from scratch and try and rethink all that the aerospace, automotive
and solar industry accepted as convention. SpaceX aimed to build reusable rockets, carrying
supplies to the International Space Station. Perfecting this technology has the potential to
push some of the established players out of the market, while making the US the world
leader in taking humans and cargo into space. For Tesla, Musk revamps how cars are
manufactured and sold, simultaneously building a worldwide fuel distribution network.
When researching Musk found that most big automakers don’t even build their vehicles
anymore. The days of Henry Ford having materials shipped to his Michigan factory had long
passed. Where big companies only internally managed engine research, sales, marketing
and final assembly, Tesla aimed to keep all processes in house.
Musk had first shared his ideas on fully automating factories with Tesla staff in a meeting in
2016. He told them that he had recently had a dream where he had envisioned the factory
of the future; factory where machines built everything at superhuman speed, with parts
moving along on a series of conveyor belts, being delivered in just the right place at the
precisely the right time. He would soon come to define this concept as ‘the machine that
builds the machine.’
Tesla has also radically reshaped the sales approach. Instead of selling through dealerships,
they took the non-traditional route of selling directly to car dealerships would block the rich
feedback that would be gained from engaging directly with the end users. For a young start-
up like Tesla, whose sole strategy was based on constant improvement to make each
successive design better than the prior one, feedback was critical. Thus, Tesla decided to
embrace a direct-to-consumer model where customers could inspect and purchase cars
through one if their retail stores usually located in prominent shopping malls or order online
via Tesla’s website.
Musk is an inventor, celebrity businessman and industrialist, able to take big ideas and turn
them into big products. He’s employing thousands of people to forge metal in American
factories, along with global ones, at a time when manufacturing was thought to be a dying
sector.
Elon Musk: The New Industrialist
MGMT20001 Organisational Behaviour
4
Culture at Tesla and Space X: Trust me, it will be worth it
Elon Musk’s assistant, Mary-Beth Brown, was integral to the development of culture at
Space X. She chose key items, like red waste bins that looked like spaceships while
establishing the communication tone. Often heard to say “How are you dear?” to the largely
young male workforce ,she assumed a caring role. She collected the weird and wacky emails
that were sent to Musk, sending out a weekly ‘Kook of the Week’ missive to make people
laugh.
Most of SpaceX’s early employees were young, male over achievers personally recruited by
Musk. Competitive but extremely hard-working, there was an ‘all hands on deck’
philosophy. Musk was often in the middle of it, getting covered in epoxy or oil and he
physically engaged with designs in testing. SpaceX was a small, tight-knight family, that saw
themselves as up against the rest of the world. In 2002 it was one empty warehouse, but 12
months later it looked like a real rocket factory. Engines were being fed into an assembly
line where machinists connected them to the body of rockets. Cranes were on the floor to
move obstacles. It was as if Henry Ford met Star Wars. Preparing to film Marvel’s Iron Man
in 2007, actor Robert Downey Jr paid a visit to SpaceX. He thought it looked like a giant
hardware store, with enthusiastic employees zipping around, white collar and blue collar
workers sharing a genuine excitement for what they were doing.
Musk holds high expectations of himself and of those around him, including a strong vision
about how a company should operate. His emails have become famous, both within his
companies and in the broader media, as he sent off missive defining everything from dealing
with external parties to use of corporate jargon. In one famous example he wrote:
There is a creeping tendency to use made up acronyms at SpaceX. Excessive use
of made up acronyms is a significant impediment to communication and
keeping communication good as we grow is incredibly important.
Individually, a few acronyms here and there may not seem so bad, but if a
thousand people are making these up, over time the result will be a huge
glossary that we have to issue to new employees. No one can actually
remember all these acronyms and people don’t want to seem dumb in a
meeting, so they just sit there in ignorance. This is particularly tough on new
employees.
12-hour days, six day work weeks were the norm, with many working even longer than that.
Respites occasionally come after 8pm, when Musk allowed everyone to play first-person
shooter video games from their work computer. As the time approached the sound of
electronic gun cartridges could be heard across the factory floors, with Musk himself often
winning games. He was, according to some, “alarmingly good.”
He demanded that people work on Saturdays and Sundays and sleep under their desks till
tasks were completed. And when someone said that they needed to see their loved ones, he
would respond with, “I would tell those people they will get to see their families a lot when
we go bankrupt.” Musk’s belief as summed up in one of his tweets; “There are way easier
places to work, but nobody ever changed the world on 40 hours a week.” When an
employee missed a company event to be present for the birth of his child, Musk allegedly
Elon Musk: The New Industrialist
MGMT20001 Organisational Behaviour
5
notified him via email, “I am extremely disappointed. You need to figure out where your
priorities are. We’re changing the world and changing history, and you either commit or you
don’t.” Another employee, however, was overheard by Musk venting about how he had
lost his glasses and never had time to go collect a new pair. Two hours later, Mary-Beth
Brown appeared with an appointment card to see a Lasik eye surgeon. Musk had not only
booked him an appointment but paid for the surgery. “Elon can be very demanding, but
he’ll make sure all the obstacles in your way are removed.”
Most employees were thrilled to part of Musk’s multi-planetary, world-changing adventure.
But there were times he did push them too far. The engineers often fumed when Musk
claimed credit in the press for designing SpaceX or Tesla products almost singlehandedly.
Musk also hired a documentary crew to follow him around, grating on those who were hard
at work. Employees who sometimes made suggestions about potential design flaws were
ignored. Those who were not ‘management’ felt that they were not seen as assets to the
company, and if they spoke up were forced out or blamed for things they hadn’t done. It
was the ‘kiss of death’ to suggest Elon wasn’t 100% correct.
A former female executive described how Musk berated her before her peers. “He was
shouting that I didn’t know what I was doing, that I was an idiot, that he’s never worked
with someone so incompetent.” A senior engineering executive revealed that those close to
him “called it ‘the idiot bit.’” If you said something wrong or made one mistake or rubbed
him the wrong way, he would decide you’re an idiot and there was nothing that could
change his mind.” A former executive recounted, “If you told him that you made a particular
choice because ‘it was the standard way things had always been done,’ he’d kick you out of
the meeting fast. He’d say, ‘I never want to hear that phrase again. What we have to do is
f*ing hard and half-assing things won’t be tolerated.’” Musk’s managerial style did not suit
all employees. During the production of the Model 3 at Tesla, approximately 36 vice
presidents and other high-profile staff left the company. These included leaders from a
diverse range of departments – finance, engineering, manufacturing, human resources and
communications.
Others liked the camaraderie that this culture fostered. “The best part working for Tesla is
they hired really good people most of the time, and if you’re not really good, you get let go.
You have to believe in what you’re doing in those buildings or you’re not going to have a
spot tomorrow. I think that was the best part because it took me back to the camaraderie I
had in the military.” It wasn’t just the culture that had been cultivated which drew people
in. They also resonated with the vision of the company. "This is the future," said Branton
Phillips, a material handler at the Fremont facility in California. "I like the whole image, what
we're doing, the mission. We're making history."
Management and governance: Not all smooth sailing
Not all staff, particularly engineers, were on board with Musk’s ideas about manufacturing
everything in house. In meetings, if someone questioned the merits of Musk’s approach,
Musk would contact the person’s manager and ask for the individual to be re-assigned to
another project, terminated, or no longer be invited to the meetings. Some senior
executives went out of their way to exclude those who resisted Musk’s ideas. “If you were
the kind of person who was likely to push back, you got disinvited,” noted a former
Elon Musk: The New Industrialist
MGMT20001 Organisational Behaviour
6
executive, “because VPs [Vice-Presidents] didn’t want anyone pissing off Elon. People were
scared that someone would question something.”
Musk personally took to dealing with the challenges with production. He was the one who
favoured the manufacturing process and the idea autonomous technology over human
workers to produce cars and rockets. He spent all-nighters in the company’s Fremont,
California manufacturing plant looking to personally troubleshoot challenges arising on the
production lines. He took to sleeping on a small couch or under a desk, in the corner of a
little office in order to always stay close to the action.
People who work for Musk are often seen as ammunition; used for a specific purpose and
then discarded. The most prominent example occurred in 2014 when he fired his loyal
assistant of over a decade, Mary-Beth Brown. After acting as what was essentially his ‘right-
hand man’ Brown went to Musk to ask he be compensated on par with some of the more
senior executives in his companies. She argued she was scheduling, doing public relations
work and often making critical business decisions on his behalf. Musk suggested she should
take a couple of weeks off and he would take on her duties to see just how onerous they
were. When Brown returned, Musk claimed that he didn’t need her anymore and let her go.
Problems also arose within the Musk’s leadership teams. At Tesla, after consistent
challenges and delays with getting their first prototypes the relationship between Musk and
founder Martin Eberhard began to sour. While Musk and Eberhard had battled for years
over designs for the car, when the cost figures began to emerge it looked to Musk that
Eberhard had grossly mismanaged the company by allowing costs for parts to skyrocket.
Musk had invested $6.5 million in the company; he was the largest shareholder and
chairman and began to wield his considerable power.
On July 19th 2006, Tesla hosted the ‘Signature 100’ launch event in an airport hangar in
Santa Monica, California. The name of the event itself reflected the first 100 limited edition
Roadsters to be sold to the first hundred buyers on the night. The event was attended by
350 highly influential and wealthy people – including the likes of former actor and then
governor of California, Arnold Schwarzenegger and former Chairman and CEO of The Walt
Disney Company, Michael Eisner.Error! Bookmark not defined. While both Musk and
Eberhard were invited to give speeches during the event, it was Eberhard who attracted the
attention of the press. Stephen Casner – a former colleague of Eberhard at Packet Design
and an electric car aficionado who was one of the Signature 100 buyers at the launch event
noted: “Elon's ability to speak in public and convey the sense of the company was not nearly
as good as what Martin had done. I don't know if it's a matter of what language is used or
colourful phrases. He just didn't seem to be nearly as effective in making people excited and
believe in this trend.” Eberhard, as a result of his influential speech, was the one sought
after for interviews from print, radio and TV. He was the voice of Tesla.
After the event, press coverage continued to focus on Eberhard. The New York Times (NYT)
overlooked Musk and incorrectly attributed the title of Chairman of Board of Tesla to
Eberhard. And in a follow-up opinion piece titled, ‘Go Speed Racer,’ the NYT singled
Elon Musk: The New Industrialist
MGMT20001 Organisational Behaviour
7
Eberhard out as the one leading the team at Tesla for “making their car [the Roadster] the
newest hot gadget, a status symbol.” This did not sit well with Musk, who felt that he was
not being given due recognition. He wrote, in an email to Mike Harrigan, then VP of
Customer Service and Support:
The way that my role as been portrayed to date, where I am referred to merely as
'an early investor' is outrageous. That would be like Martin [Eberhard] being
called an 'early employee.
Apart from me leading the Series A & B and co-leading the Series C, my influence
on the car itself runs from the headlights to the styling to the door sill to the
trunk, and my strong interest in electric transport predates Tesla by a decade.
Martin should certainly be the front and centre guy, but the portrayal of my role
to date has been incredibly insulting.
I'm not blaming you or others at Tesla — the media is difficult to control.
However, we need to make a serious effort to correct this perception.”
In August 2007, while on his way to give a speech at a conference organised by the Motor
Press Guild, Eberhard received a call from Musk. Eberhard was advised that the Board had
decided to replace him as the CEO with Michael Marks, former CEO of electronic goods
supplier, Flextronics. It was revealed that there had been a secret board of directors
meeting, including Musk as the chairman of the board, where they had decided that while
Eberhard was an important staff member at Tesla, he wasn’t the right person to lead Tesla
forwards as the CEO.
"There was no discussion," Eberhard later disclosed in an interview. "I didn't get to hear
what they said. I didn't get to defend myself. I felt totally stranded.” Mike Harrigan echoed
Eberhard’s view. “[Musk] is the kind of boss where day to day you don't know if you have a
job or not. Once he's convinced that you can't do the job, there's no way you can convince
him back again. That happened many times to many people, and that's what happened with
Martin [Eberhard]. Once he determined that Martin couldn't be the CEO of Tesla any longer,
that was it." Eberhard’s removal led to a period of leadership instability for Tesla as Marks
(Eberhard’s replacement as CEO) was shortly replaced by Ze'ev Drori, former CEO of car-
alarm maker Clifford Electronics, who was in turn replaced by Musk himself in October
2008. Musk, the largest shareholder, was then CEO and Chairman.Error! Bookmark not
defined. In November 2007, a few months after having been demoted and restricted to
focus only on product development, Eberhard resigned from the company.
Musk versus the US Securities and Exchange Commission (SEC)
On August 7th 2018, Musk claimed to have secured funding to take Tesla private [See Figure
1]. At $420 per share, the group of Middle Eastern investors financing the initiative would be
buying nearly $80 above the then market price (Tesla was trading at US$341.99).
Elon Musk: The New Industrialist
MGMT20001 Organisational Behaviour
8
Figure 2: Source twitter.com/elonmusk
The following month, the SEC charged Musk for securities fraud, arguing this tweet had no
basis in fact and thus was misleading for the market. As a result of the tweet, Tesla’s shares
had surged 13.3%. The SEC reported that Musk did not have any sources to finance this
acquisition nor had he looked at the background work required before making such an
announcement, such as identifying the regulatory approvals that were necessary.
The SEC proposed that Musk be barred from assuming the role of officer or director of a
public company, a settlement that Tesla rejected after Musk threatened to resign. The news
of the rejected deal caused Tesla’s stock to reduce in value by 14 per cent the following day,
causing the board and Musk to quickly accept a more onerous deal. The stricter terms
included Musk having to relinquish his title as the Chairman of Tesla for three years and pay
a personal US$20 million fine. He was permitted to remain as the company’s CEO but as part
of the settlement, Tesla was also required to have procedures in place to control Musk’s
communications. Along with Musk, Tesla was additionally charged US$20 million. In
December 2008 Musk was interviewed by US 60 Minutes and when asked about the lawsuit
“I want to be clear: I do not respect the SEC, I do not respect them.”
In 2019 Musk demonstrated that he had not necessarily learned from his previous rogue
tweeting experience. Musk tweeted on February 19th that Tesla would make around
500,000 cars in 2019, after Tesla said in its fourth-quarter earnings letter that it expected to
deliver between 360,000 and 400,000 vehicles in 2019. Four hours later, Musk corrected the
projection in a new tweet, saying Tesla would by the end of 2019 reach a rate of production
that would result in around 500,000 cars if maintained for a full year.
The SEC said in a court filing that Musk had violated the terms of his settlement with the
agency by not receiving approval from Tesla before publishing his tweet about vehicle
production. Musk’s settlement with the SEC requires Musk to receive approval from Tesla
before tweeting information about the company that could be relevant to shareholders.
Musk’s attorneys argued, however, the tweet about vehicle production did not meet that
criterion since it was close to projections that had already been made.
At a court hearing on April 4th 2019, a lawyer for the SEC said that if Musk were found in
contempt, the agency would ask the judge to require him to submit regular reports about
Elon Musk: The New Industrialist
MGMT20001 Organisational Behaviour
9
his Twitter use and to pay a series of progressively higher fines for any future violations.
Later that month Musk and the SEC reached a second agreement, under the terms Musk
agreed not to tweet or otherwise disseminate information about Tesla’s finances,
production numbers or certain other information without a lawyer’s approval.
2020 proved to be another year of ups and down for Elon Musk. In May he and his partner
welcomed a son, Musk’s seventh, named X Æ A-12. Musk then managed to get all the wrong
type of press attention during the Covid-19 pandemic when he firstly claimed on twitter that
children were immune, then arguing there would be “close to zero new cases in US by the
end of April.” More worryingly, Musk began a ‘feud’ with the Alameda Public Health
Officials, claiming essential lockdowns of Tesla plants were ‘fascist’ and reopening against
public health advise. President Donald Trump tweeted his support for reopening the
Fremont plant and Musk threatened to move all his manufacturing out of California,
jeopardising 10,000 jobs, as retaliation to the lockdown. Predictably, Tesla workers began
to contract the virus. Even die-hard Musk fans began to question Musk’s continued
insistence that he knows best, especially when his actions were jeopardising worker and
public health.
Where will the future lead?
Tesla has surprised many to be remarkably successful. Error! Bookmark not defined. Its
achievements in designing and selling electric vehicles have prompted other major car
manufacturers to take notice. Ford recently launched its version of a fully electric vehicle
the Mustang Mach-E and Porsche released the Taycan. General Motors plans to have
twenty models released worldwide by 2023. It even has plans to build a US$2.3 billion
battery factory in Lordstown, Ohio - much like a factory that Tesla has already in
construction. Tesla has begun to achieve its aims of transforming the automotive industry,
making it more sustainable while also demonstrating the renewed potential of
manufacturing in the USA.
SpaceX remains a private company. In March 2020 SpaceX launched its latest batch of 60
satellites for its Starlink constellation, aimed at beaming internet coverage down to Earth.
The company used its’ Falcon 9 rocket for the job: a vehicle that’s been to space and back
four times before. This feat, a private space company that has built reusable rockets, was
unthinkable 15 years ago. May 2020 saw SpaceX launch the Crew Dragon, the first time a
commercial space company has carried humans into orbit around Earth.
No one can dispute the achievements of Elon Musk. Tesla and SpaceX have radically
reshaped their respective industries in under two decades. But SpaceX and Tesla are
expressions of Musk, their foibles originate from him, as do their successes. His manic
energy and hands-on approach mean that employees love him, fear him and give up their
lives for him (often simultaneously.) There are two Elon Musks: There is the entrepreneur
and the risk taker and the creator of things and the attention seeking bad boy who is willing
to sacrifice those around him to achieve his, albeit sometime altruistic, goals. Musk is
described as ‘religious’ – whether it be about space or cars or climate change. And the world
needs this type of evangelism to instigate real change.
Elon Musk: The New Industrialist
MGMT20001 Organisational Behaviour
10
Some, however, question the influence Musk with his vast wealth, connections and media
platform, and technology companies in general, have. Technology broadcaster Kara Swisher
says “If you live a life of extreme wealth—no one’s been this rich on the planet—there are
no consequences. Why would you change your behaviour until you’re made to, and then,
who is going to make you?”
The experience of those who work with and for Musk, employees, shareholders, the Boards
has rarely been smooth and without drama. What might be achieved if Musk manages to
control his more outlandish tendencies? He may one day be tweeting from Mars.
Elon Musk: The New Industrialist
MGMT20001 Organisational Behaviour
11
Source Material
Baer. D. (2014, November 11). The Making of Tesla: Invention, Betrayal, And The Birth Of The Roadster.
Business Insider. Retrieved from https://www.businessinsider.com
Bariso,J. (2017,August 30). This Email From Elon Musk To Tesla Employees Describes What Great
Communication Looks Like. Inc. Retrieved from www.inc.com
BBC News. (2020, May 6). X Æ A-12: Elon Musk and Grimes confirm baby name. Retrieved from
https://www.bbc.com/news/world-us-canada-52557291
Chatterjee, R., Pierson, B., Sage, A. (2019, April 26). Tesla’s Elon Musk, SEC Again Ask For More Time To Reach
Deal Over CEO’s Twitter Use. Reuters. Retrieved from https://www.reuters.com/article/us-tesla-musk-sec/
DeBord, M. (2019, December 8). Tesla Is Revamping Its Relationship With Owners Of The Original Roadster.
Here’s A Closer Look At Tesla’s First Car. Business Insider. Retrieved from amp.businessinsider.com
Draper, W. H. D., (2011). From International to Global. The StartUp Game: Inside the Partnership of Venture
Capitalists and Entrepreneurs (pp.163-165). New York, USA: Palgrave Macmillan.
Duhigg,C. (2018, December 13).Dr. Elon and Mr. Musk: Life Inside Tesla’s Production Hell. Wired. Retrieved
from www.wired.com
Eidelson, J., Hull, D., Lippert, J., Randall, T. (2018, July 13). Hell For Elon Musk Is A Mid-Sized Sedan. Bloomberg.
Retrieved from https://www.bloomberg.com/news/features/
Faux, Z., Robinson, M. (2019, March 13). When Elon Musk Tried To Destroy A Tesla Whistleblower. Bloomberg.
Retrieved from https://www.bloomberg.com
Ferenbacher, K. (2016, June 7). Tesla Quest To Build The Machine Behind The Machine. Fortune. Retrieved
from https://fortune.com/2016/06/06/teslas-the-machine-behind-the-machine/
Gregersen, E., Schreiber, B.A. (2018, October 4). Tesla, Inc. Britannica. Retrieved from
https://www.britannica.com/topic/Tesla-Motors
Gupta, P. & Spicer. J. (2010, June 29). Carmaker Tesla stock zooms 40% on first day. Reuters. Retrieved from
https://www.reuters.com
Hamilton, I.A. (2018, June 22). Tesla ‘Whistleblower’ Says Elon Musk Is Waging War On Him For Leaking
Information To Business Insider. Business Insider. Retrieved from www.businessinsider.com.au
Higgins. T (2020, January 22). Tesla Tops Volkswagen to Become Second-Most-Valuable Auto Maker. The Wall
Street Journal. Retrieved from www.wsj.com
Horowitz, J. (2018, September 28). SEC Sues Elon Musk For His Allegedly Misleading Tweets. CNN. Retrieved
from https://money.cnn.com/2018/09/27/technology/
Kharpal, A. (2018, October 1). Tesla Shares Surge 17 Percent After SEC Settlement. CNBC. Retrieved from
https://www.cnbc.com
Kolodny, L. (2018, May 3). Tesla Email Warns Employees: Stop Leaking. CNBC. Retrieved from www.cnbc.com
Lopez, L. (2018, September 5). Tesla employees describe what it's like to work in the gigantic Gigafactory.
Business Insider. Retrieved from https://www.businessinsider.fr/us/Lopez, L. (2018, June 4). Internal
Documents Reveal Tesla Is Blowing Through An Insane Amount of Raw Material And Cash to Make Model 3s,
And Production is Still A Nightmare. Bloomberg. Retrieved from https://www.businessinsider.com
Matousek, M. (2018, October 31). Tesla Is Experiencing A Painful Year – Here’s Everything That Has Gone On
So Far. Business Insider. Retrieved from www.businessinsider.com
Matousek, M. (2019, September 5). 9 Ex-Tesla Employees Reveal The Best Part of Working There. Business
Insider. Retrieved from www.businessinsider.com.au
Matousek, M. (2018, October 27). US Officials Are Investigating Whether Tesla Misled Investors About Model 3
Production: Report. Business Insider. Retrieved from https://www.businessinsider.com.au
Matousek, M. (2019, March 28). Elon Musk And The SEC Are In A Fierce Battle Over One Of Musk’s Tweets –
Here's What You Need To Know About Their Dispute. Business Insider. Retrieved from
https://www.businessinsider.com.au
Morse, J. (2020, July 1.) Elon Musk's coronavirus self-own to go down in the history of self-owns. Retrieved
from https://mashable.com/article/elon-must-coronavirus-self-own/
Muir, H. (2020, July 30). SpaceX: Crew Dragon is returning to Earth – here’s when to hold your breath.
Retrieved from
https://theconversation.com/spacex-crew-dragon-is-returning-to-earth-heres-when-to-hold-your-breath-
143500
Musk. E. (2018, August 24). Staying Public. Tesla. Retrieved from https://www.tesla.com
Elon Musk: The New Industrialist
MGMT20001 Organisational Behaviour
12
Musk, E [@elonmusk] (2018, November 26). There are way easier places to work, but nobody ever changed
the world on 40 hours a week [Tweet]. Retrieved from
https://twitter.com/elonmusk/status/1067173497909141504
Musk, E. [@elonmusk]. (2018, April 13). Yes. Excessive Automation At Tesla Was A Mistake. To Be Precise, My
Mistake. Humans Are Underrated [Tweet]. Retrieved from
https://twitter.com/elonmusk/status/984882630947753984
Naughton, K. (2020, January 24). Tesla’s Rivals Brace For Electric Armageddon. Australian Financial Review.
Retrieved from https://www.afr.com/policy/energy-and-climate
New York Times Go Speed Racer. (2006, July 23). The New York Times. Retrieved from
https://www.nytimes.com
O’Kane, S. (2019, March 13). Tesla Allegedly Hacked, Spied On, And Followed Gigafactory Whistleblower:
Report. The Verge. Retrieved from www.theverge.com
O’Leary, L. (2020, May 22). What Kara Swisher Thinks Is Going On in Elon Musk’s Brain. Retrieved from
https://slate.com/technology/2020/05/kara-swisher-elon-musk-interview.html
Popple, R. (2020). Linked in Profile. Retrieved January 4, 2020, from https://www.linkedin.com/in/rpopple
Randall, T. (2018, June 8). Inside Tesla’s Model 3 Factory. Bloomberg. Retrieved from
https://www.bloomberg.com/news/features
Rao. L (2010, January 30). Tesla $100M IPO: Losses Expected Until At Least 2012. Musk Taking $1 A Year.
Techcrunch. Retrieved from https://techcrunch.com/
Rosenbaum, E. (2018, June 13). Tesla CFO Deepak Ahuja Has Been Through One Of The Worst Rounds Of Tesla
Layoffs Before. CNBC. Retrieved from https://www.cnbc.com
Reuters, (2019, April 27). Tesla's Elon Musk reaches deal with SEC over Twitter use. Retrieved from
https://www.theguardian.com/technology/2019/apr/26/tesla-elon-musk-sec-twitter-deal
Reynolds, K. (2008, January 23). 2008 Tesla Roadster First Drive. Motor Trend. Retrieved from
www.motortrend.com
Salinas, S., Wang, C. (2018, October 4). Elon Musk Mocks SEC As ’Shortseller Enrichment Commission’ Days
After Settling Fraud Charges. CNBC. Retrieved from https://www.cnbc.com
Shaban, H. (2018, September 17). Elon Musk: Tesla Has Moved From Production Hell to Delivery Logistics Hell.
The Washington Post. Retrieved from https://www.washingtonpost.com/technology/
Shephardson, D. (2020, January 18). US Will Look At Sudden Acceleration Involving 500,000 Tesla Vehicles.
Washington Post. Retrieved from www.washingtonpost.com
National Highway Traffic Safety Administration. (2020). About Us. Retrieved February 8, 2020, from
https://www.nhtsa.gov/about-nhtsa
SpaceX. https://www.spacex.com/about
Squatriglia, C. (2015, September 29).Tesla’s Model X Is Here, And It’s As Awesome As We Hoped. Wired.
Retrieved from www.wired.com/2015/09
Squatriglia. C. (2009, November 6). Tesla Founder Sues Tesla’s CEO. Wired. Retrieved from
https://www.wired.com
Squatriglia, C. (2009, March 26). First Look At Tesla’s Stunning Model S. Wired. Retrieved from
www.wired.com/2009/03
Squatriglia, C. (2015, September 29).Tesla’s Model X Is Here, And It’s As Awesome As We Hoped. Wired.
Retrieved from www.wired.com/2015/09
Stewart, J.B. (2018, October 2). Elon Musk’s Ultimatum To Tesla: Fight The S.E.C., Or I Quit. The New York
Times. Retrieved from https://www.nytimes.com
Tesla. (2019). About Us. Retrieved September 4, 2019, from https://www.tesla.com/about
Thornhill, J. (2020, February 28). Two Years On, Elon Musk’s Big Battery Bet Is Paying Off in Australia.
Bloomberg. Retrieved from https://www.bloomberg.com/news/articles/2020-02-28/two-years-on-musk-s-big-
battery-bet-is-paying-off-in-australia
Trudell, C., (2019, March 11). Ex-Tesla Worker Says Take Private Bid Was Known Pre-Tweets. Bloomberg.
Retrieved from https://www.bloomberg.com/news/articles/
Vance, Ashley (2015). Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future. New York, NY, USA:
HarperCollins.
Vincent, J. (2015, May 12). Elon Musk Denies Scolding Employee For Taking Time Off To Witness Childbirth.
The Verge. Retrieved from www.theverge.com
Wald. M. L. (2006, July 19). Zero to 60 in 4 Seconds, Totally From Revving Batteries. The New York Times.
Retrieved from www.nytimes.com
Elon Musk: The New Industrialist
MGMT20001 Organisational Behaviour
13
Wang, C. (2019, April 26th). Elon Musk makes deal with SEC not to discuss Tesla’s finances without a lawyer’s
approval. Retrieved from https://www.cnbc.com/2019/04/26/elon-musk-and-sec-reach-agreement-over-
tesla-ceos-use-of-twitter.html
Wasik. J.F. (2017, December 30). Tesla the Car Is a Household Name. Long Ago, So Was Nikola Tesla. The New
York Times. Retrieved from https://www.nytimes.com
