Running head: ANALYSIS OF GLOBAL TEAMWORK
Analysis of Global Teamwork of Tesla Gigafactory 3
Diana Subhashini Kondeti
Tingyu Sandy Hsu Concordia University St. Paul
Instructor: Joel Schuessler, Ph.D.
Tesla is not alone in companies that have expanded their reach of consumers and workforce across different countries. Organizations that do so are looking to attract a new group of buyers to increase the profit of the company. However, one issue that the majority of companies run into with new groups of consumers and workforce is that this brings about new cultures, values, and differences. In order to see the desired results companies like Tesla must work through these differences and navigate the project teams and the organization to a successful outcome. Cultural lenses are not only applicable to workforces, but to social interactions individuals have with people from different cultures. Once these cultural lenses are understood, a new perspective on cultural differences will be had and will, hopefully, lead to increased collaboration and harmony for society at large.
Keywords: Tesla, Project Team, Collaboration, Cultural Lens
Analysis of Global Teamwork of Tesla Gigafactory 3
In October 2018, Tesla officially acquired an 864,885-square meter plot in the Lingang area of Shanghai for the electric car maker’s first factory outside of the United States. Tesla could significantly reduce costs by producing in China, the world’s largest market for electric vehicles
(Cheng, 2018). As the world’s second-largest economy and its top manufacturing power, China produces more of everything than anyone else, having blown past the output of the United States in 2010.
The Gigafactory in the Lingang Industrial Zone in Shanghai is the biggest foreign investment in manufacturing the city has ever seen. Furthermore, the government in Shanghai reiterated Tesla’s initial target to make 250,000 cars a year and would eventually ramp up to 500,000 cars in the future. That number is quite staggering as that figure would be roughly five times the number of vehicles the company currently produces in the United States (Wang, 2018).
The company has said it is operating at a 55-60% cost disadvantage versus their domestic counterparts due to ocean transport costs and tariffs. Tesla’s first factory outside of the United States will produce “affordable versions” of the Model 3 and its yet-to-be-unveiled Model Y crossover for customers throughout China.
Time is certainly of the essence for the California-based Tesla. Until the new factory opens its doors, Tesla will have to continue to rely on importing all of their vehicles from outside of the United States, which would extend its exposure to the risks associated with the U.S.-China trade war. However, if the issues found in the following case study between Tesla employees from America, China, and India are not resolved, Tesla may have additional problems besides time in achieving increased production of vehicles.
An American transplant has been relocated from California to China in order to ensure that production standards and throughput does not decline from those seen at the factory in the
United States to the new factory in Shanghai. Brian is the procurement manager of Tesla’s overseas Gigafactory located in Shanghai. Brian has been in the procurement industry for many years and through hard work and expertise, he has gained on the job he was promoted to look after the Chinese factory and recently located from California to Shanghai in January 2018. In addition to other responsibilities, his main role within the organization is that of purchasing machinery for the new factory.
Brian must be in constant communication with Ying Chen, the regional sales manager at Ali, Inc., a small China engineering company that designs and manufactures custom parts for the machine and supply worldwide. Ying does not share the same work experience that Brian has. Although Ying is well-educated and brings ideas to the table, this is her first position of leadership and she is over her head. Ying has gained her position because her father is close friends to the Chinese manager of Gigafactory.
For Tesla to continue to produce the numbers in the Shanghai-based factory that were forecasted, engineers from India are deployed from Mumbai to Shanghai to undergo training on the new machines and technology. The team of engineers is comprised of an all-male, Indian team that has worked together on numerous projects for a number of organizations together. For the duration of three months, each Indian engineer is assigned to work with one American guide who is their counterpart that has also been transplanted to China.
Unfortunately, the work being completed by the Chinese team in the new factory is not up to the standards that were agreed upon. Quality is suffering, deadlines are being missed, and the team from India are not receiving the amount of communication flow that is expected during a project. This angers Brian greatly as he lives by the motto that, “Time is money.” So, Brian to reach out to the team from India to discuss the issues before he contacts Ying to tell her like it is.
He lays all of the cards on the table and voices his frustration and concerns.
While speaking with the team from India, the senior member of the team, Rahul, has some very damaging remarks regarding Ying and that issues with the project stem from the fact that a woman is in charge. Moreover, the team from India resorts to helping each other out and learning as a group on how to move forward with their work. The Indian team, feeling that they are not getting the information necessary, engage in this frugal engineering where there is a general disregard for keeping rules in an attempt to just make things work.
After hearing the team from India’s displeasure with Ying, Brian responds by saying that, “Everyone must be treated fairly regardless of gender, race, or religion and that there are more pressing matters than the sex of those in charge.”
Brian then reached out to Ying and explained, “Our engineering team needs the requested changes to be integrated into production moving forward in order to accommodate a revised product design. If the requested changes are not implemented then any parts that are produced after the revised product design occurs will not fit on the updated system. Furthermore, the Indian team has some concerns about the communication between the Chinese factory and the team from India.”
This being Ying’s first leadership role she is really unsure of how to respond. She was giving this position based on the Chinese guanxi. Ying replied, “I am afraid we are unable to do that. We have already designed the part in question because it was previously approved by your team. In the event that we need to make changes to parts, the cost will increase substantially and the amount of time it takes to manufacture will increase as well. Moreover, this was not in the original agreement that both of our companies signed. I am unsure of how to bring this up to my boss as he is the one who negotiated the contract. As far as the team from India goes, I have reached out to them multiple times, but it seems as they do not listen to my ideas or respond to my attempts to contact them. It is almost impossible to speak with any of them because they all look out for each other and have a pack mentality and will not speak to me on a one-to-one basis.”
In the same time Ying’s unwillingness to bring this issue to light with her boss. Brian replied, “Ying, the change is necessary in order to satisfy the new design. I am very disappointed at your response. You have already charged us a great deal, and you agreed to provide the technology necessary to support our growth in the market. Since the original agreement was signed, the market itself has changed. If we stay with the original design and specifications, we will most definitely lose our competitive edge. The relationship between our companies spans many more projects than this specific agreement. We hope to work with you for many years to come and if this issue is not resolved it will certainly strain our relationship moving forward.”
The difficulties seen between the American, Chinese, and Indian teams comes down to issues not only with project management, but also cross-cultural differences as well. However, not only does the project team stretch across the globe, but so too does Tesla’s customer reach.
Industry Research around Case Study
Tesla was founded in 2003 by Silicon Valley engineers who wanted to prove that electric vehicles could be “awesome” to drive when compared to gasoline cars. The company’s head office is located in Palo Alto, California. Tesla’s vehicles are produced at its factory in Fremont,
California, where the vast majority of the vehicle’s components are also made (Tesla, 2019).
As Tesla continues to expand its product line, Tesla reports that every part of their Model 3 production process in Fremont has demonstrated the ability to reach a rate of 7,000 cars per week over a 24-hour basis. They target a sustained rate of 7,000 cars per week by the end of the year, which annualizes to a rate of 350,000 cars per year, but that’s just out of the Fremont factory.
Tesla also announced plans to start production on Model 3 at Gigafactory 3 located in
Shanghai. By the end of the year, they want production of Model 3’s to start in China with a goal of hitting 3,000 units per week, bringing the total up to 10,000 per week globally, or an annualized rate of 500,000 per year. Tesla also has worldwide branch offices, which gives support to its target market. Today, Tesla builds not only all-electric vehicles, but also some energy storage products. Tesla believes the faster the world stops relying on fossil fuels and moves towards a zero-emission future, the better.
Tesla may primarily be an electric vehicle company, but its journey from Roadster to the latest Model 3 has spun off many new technologies, some of which are state-of-threat and some are yet to be developed. The current vehicle line-up of Tesla includes a cavalcade of Model S, Model X, and latest Model 3. Tesla has discontinued production of its first model Roadster. All the Tesla cars are fully electric and use lithium-ion cells to power induction motors. Model 3 is the most economic model with a base price tag of $35,000. Model S is the luxury sedan with a base price starting from $74,500. Model X is the luxury SUV with falcon wing doors and may cost a base price of $79,500.
All the Tesla models are high performance vehicles with the induction motors producing instant torque, which may be an attractive feature to many car enthusiasts. Moreover, Tesla provides lifetime free charging facility through its green power superchargers that are available in selected regions of the US.
Increased pressure will continue coming from rival sellers as electric car firms are generally more aggressive in innovating and promoting their products when compared to normal gasoline vehicles. Furthermore, the competition from potential new entrants to the industry is weak which Tesla’s business is difficult to compete with, especially because of the high cost of R&D, along with the brand development cost. Concerning competition from producers of substitute products, Tesla will only experience a very low impact of substitutes on the automotive industry.
Gigafactory 3 is first plant outside the U.S. for the electric auto manufacturer, from Qiu
(2019) the new Shanghai factory is expected to begin production in the second half of 2019.
Shanghai is the epicenter of China’s auto industry, the Tesla brand is growing in popularity in China despite a rising rivalry from Nio – a local electric auto manufacturer (Cheng, 2019). Other electric vehicle manufacturers in China include BYD Auto, BAIC Group, and governmentowned Shanghai Automotive Industries Corp.
Tesla mainly focuses on investor interest for the expansion forecast in support of electric vehicles. Tesla has made numerous innovations with technology that is centered on the Model S that has drawn serious interest from consumers. These technologies have also influenced the quality of vehicles that Tesla produces. For instance, both the Model S and Model 3 have made serious improvements on current technologies related to electric cars. This has, therefore, contributed to the increased production of affordable electric cars, which are friendly to the environment and emit lower levels of energy (Hirsch, 2019).
Musk said that, “China is becoming the global leader in electric vehicle adoption, and it is a market that is critical to Tesla’s mission to accelerate the world’s transition to sustainable energy.” An automotive value chain study from Kuang et al.(2017) pointed out that the foreign innovation technology such as Tesla will have a great impact on traditional automotive companies throughout China. The Gigafactory in Shanghai will change the product forms and service patterns seen within the traditional automotive industry in the country, which will lead to profound transformation of value creation in each link of the automotive value-chain.
Elon Musk’s leadership at Tesla is grounded upon a holistic strategy that looks to address the issue of green energy with projects like Tesla Energy and Solar City that are expected to fuel
Tesla’s superchargers in the future. The above strategy sets Tesla far ahead of any other automobile giants.
Elon Musk, is a transformational leader. His leadership style makes managing changes pretty much very eminent if he wants to successfully lead. When Musk came onboard with Tesla Motors, the company was struggling with getting funded due to lack of confidence in electric cars in the market and a doubt about Tesla being able to withstand an enormous backlash from the industry giants. It was segregation of market, which segregated into fuel-driven car companies on one side and Tesla on another.
He has an incredible vision, is dedicated, and perseveres over all conditions as he strives to actualize his vision. Also, he is able to influence people to believe in his vision. He is said to be a leader who cannot conceive failing. His remarkable vision and drive makes his leadership style that much more meaningful and intoxicating to those who follow him. In all his innovations, Musk aims high on the target achievements of the industry.
As an example of transformational leaders, Musk conflicts with other leaders who resist change. One of the few quotes from Elon Musk’s biography that Vang (2016) managed to capture from Tesla’s leader was, “Constantly seek criticism. A well thought out critique of whatever you’re doing is as valuable as gold.” Concerning this, he has the ability to change the
minds of his employees by motivating them to work more positively in project development.
From the perspective of Glen and McManus (2014) they point out one method for motivating geeks is to create a compelling problem statement for them to solve. Due to the fact that geeks are motivated more on the types of projects they get to work on than when compared to non-geeks, it is essential to have the interest of the geek team members and this can be achieved by defining what it means to win this “game.” As a result, productivity is improved and commitment of the employees to their duties, which is for quality within production, has increased as well.
Elon Musk, compared to other leaders, is also able to effortlessly spot problems and parts that are not functioning. For example, he was able to realize issues with the California HighSpeed Rail system that has plagued the state of California for decades. Musk helped devise a plan and proposed the Hyperloop with the assistance of engineers from SpaceX and Tesla. Together, they developed a standard system, which is faster and allows commuters to travel on trips that have shorter duration than a flight on an airplane. Due to all of this, his leadership style and qualities have assisted in the growth of the company. Furthermore, he has lead his company into battle to face competition from other development manufacturers. This has enabled the Tesla to corner the market and have a bright outlook for the future with increased profits and worldwide recognition.
Culture Research around Case Study
Tesla is an international company that most definitely contains a wide variety of cultural variations. Likewise, global virtual teams share the same characteristics, which also leads to a wide variety of perceptions as well. Members from different cultures will describe a team’s objectives, membership criteria, and activities in very different terms (Gibson & Zellmer Bruhn, 2001). As Walumbwa et al. (2007) research implies, individual natures and group norms may be contingently related to one another. Teams that pay attention to social processes tend to be more successful and more satisfied with their work together (Shachaf, 2008). Thus, information and communication technology should allow teammates to learn something about each other’s personal and professional backgrounds, their expectations and their goals, and should also support a variety of culturally different work-styles.
With the increasing internationalization and globalization of business, business has significantly increased the movement of human resources to different parts of the world. At the International Astronautical Congress in Mexico, Musk stated he supports cultural variation in order to represent the company at a global level. The company supports and encourages each other to share their ideas and values so that it is beneficial for the company in many ways (Quora, 2017). There are various group of people who constantly work on innovative ideas and the teams are very supportive no matter the cultural background of the employee.
Cultural context of USA
Tesla focuses on providing opportunities for people coming from different cultures. The company believes in innovation and provides opportunities for each individual. Constant innovation and productive thinkers who think out of the box are what drives the organizational culture at Tesla. There are equal opportunities for people working within Tesla and everyone looks to work collaboratively. However, in the above case study, cultural values has impacted the work and the project team.
Within the above case study, the cultural lens from Cultural Detective website, uncovers the cultural lens of the United States in the following ways:
- Level the playing field/equality: People are equal and in relationships, one should be straightforward and not be bound by formalities.
- After hearing the team from India’s displeasure with Ying, Brian responds by saying that, “Everyone must be treated fairly regardless of gender, race, or
religion and that there are more pressing matters than the sex of those in charge.”
- Take charge/control: There is a correct method, a procedure to follow, and one should take charge and do things “properly.”
- Brian, using his cultural lenses of taking charge, telling it like it is, and “time is money,” agrees to step in and work directly with the team from India and more closely with Ying to ensure that proper communication flow is had and that production is ramped back up to the appropriate levels.
○ “Time is money.” Looking at the US American value lenses, Americans typically
identify tasks, set milestones, and follow a strict schedule.
Within China, Tesla has achieved success when compared to the number of Tesla’s per population than in the USA. Tesla has more buyers of electric cars in China and the number looks to only grow. The country is very much interested as they want to reduce the pollution and save energy in China. Tesla’s production and development teams are really good and they manufactures more of electric cars.
Fan (2000) highlights that Chinese culture is unique and distinguishes itself not only from Western cultures, but also from other Asian cultures. A cultural study from Tse et al. (1989) analyses the culture content from Hong Kong, Mainland China, and Taiwan found that although there exists great differences in terms of political, social, and economic dimensions between the nation, but the core Chinese value still exist the same and still possible to identify.
The above case study, the cultural lens from Cultural Detective website, uncovers the cultural lens of China in the following ways:
- Guan Xi: Relationship is important at work and business because, people trust it more than the institutions and the laws.
○ Ying was given this position based on the Chinese cultural lens of guanxi/relationships. This lens is based upon the fact that Chinese rely heavily on relationships with family, friends, alum, colleagues to secure key opportunities and roles.
- Saving Face: One of the worst things that can happen to someone in Chinese culture is to “lose” face. At all costs, Chinese look to avoid incurring or inflicting disgrace.
○ Ying’s unwillingness to bring this issue to light with her boss is certainly due to the cultural lens of face, and saving face for her boss. Chinese almost always attempt to avoid coming off as inappropriate shamed, or in the wrong. In the event that Ying brings this news to her boss, it will appear as he was in the wrong for negotiating the contract the way he did and he will most certainly lose face to all working on the project.
In India, although the population is higher, the usage of Tesla vehicles is extremely lower due to environmental factors and the wealth of the population. Therefore, Tesla has not made its mark in this country. There are also governmental rules and regulations that Tesla must abide by that has led Tesla to question whether to expand its reach into India. Throughout India the majority of the population works on coal-based energy and there are still some communities that struggle with lack of electricity. This would make it difficult for some communities to install chargers in designated parking areas.
Some previous research involving India cross culture studies stress that India tends to be a “cultural island”, which is very unique and independent (Sparrow and Budhwar, 1997). Pawan et al. (2008) examined cultural dimensions between Indian migrants and Indian natives and found that Indian migrants may have divergent behavior, but they are still culturally the similar.
The above case study, the cultural lens from Cultural Detective website, uncovers the cultural lens of India in the following ways:
- Status: Expertise and authority is valued.
- Woman is in charge. This identifies with the Indian cultural value lens of status where women are still seen as the weaker sex even if they have the same background, experience, and qualifications as a male counterpart.
- Personal networks and connections: In a relationship, people should be friendly and help and accommodate each other.
- Indian engineers resorts to helping each other out and learning as a group on how to move forward with their work. This relates to the cultural lens of those from
India of jugaad.
Conclusion & Suggestion
Many aspects found in global teamwork and virtual project management are also evident in face-to-face teamwork and management. However, information and communication technology and project leadership can actively support a distributed team’s work and interactions in such a way that cultural differences can be bridged and differences can be made to complement each other.
From research conducted by Oertig and Buergi (2006), they discovered that the virtual team environment was more problematic due to lack of face-to-face contact and the office atmosphere. To avoid potential conflicts in a cross-cultural working environment at a distance and to help teams realize synergy from their cultural differences, virtual teams must be able to communicate about both tasks and social issues. Kratzer et al (2006) indicated that in virtual environments the important points should be highlighted and discussed while closing the meeting.
From research of Zakaria, Amelinckx, & Wilemon (2004), they concluded that teams must create a knowledge-sharing culture and capabilities to understand human challenges of virtual team is extremely vital for multinational corporations. In addition, team members must develop habits that will enhance the experience of project group work, including prompt responses to each other’s messages (Duus & Cooray, 2014). If the members from America, China, and India are able to follow these findings there will be a successful ending for Tesla and their continued growth will remain and their bright outlook for the future will only shine brighter.
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Keywords searched: Global virtual teams, information and communication technology, cultural diversity
The article examines how information and technology (ICT) used by teams within a virtual environment has a positive effect on the work and collaboration they are engaged in. The research team interviewed and analyzed 41 team members from nine different countries who were all employed by Fortune 500 corporations. The experiment that was carried out concluded that cultural diversity had a positive influence on decision-making and a negative influence on communication. Furthermore, ICT mitigated the negative impact on intercultural communication and supported the positive impact on decision-making. This was done with the creation of team rooms that lowered the issues with communication while at the same time enhancing overall team cohesiveness, the inclusion of all members and ideas, and a common ground for the group. Not surprisingly, the study concluded that multinational corporations rely most heavily on email for intercultural communication, with teleconferencing coming in second. Unfortunately, the study was limited to only one corporation, and inferring that these results are common across all multinational organizations may not be correct.
Kratzer, J., Leenders, R. T. A., & Van Engelen, J. M. (2006). Managing creative team performance in virtual environments: an empirical study in 44 R&D teams. Technovation, 26(1),
Keywords searched: Global virtual teams, information and communication
Managing a proper virtual team is also talks about the team performances. In any organization there are certain measures that need to be followed for an virtual team. Sometimes communicating virtually is based on the external environment. Due virtual teams it is necessary to check the audio/ video and that they is not disturbances in the surrounding. The communication should be clear and understandable.The important points should be highlighted and discussed while closing the meeting. As, Tesla is a globally known organization and has its branches all across the world, virtual communication helps the organization to process further and connect and discuss. When virtual people are connected then, it is important to be present at the time appointed to start the meeting and be prepared in before the meeting starts. The below mindmap shows more on virtual communication.
Five ways Tesla Motors pushes technology change in auto industry. (2014, March 21). Retrieved from: https://www.latimes.com/business/autos/la-fi-hy-how-tesla-pushes-autotechnology-20140321-story.html
This article talks about the technological integration in Tesla . It highlights ways in which Tesla motors is transforming automotive design in preparation to compete with other motor industries across the world. Tesla mainly focuses on investor interest on the expansion forecast in support of electric vehicles. It has innovated some technologies intended for model S that is worth investor’s concentration. These technologies have influenced the quality of vehicles built in the company. For instance, Model S and Model 3 have been improvised with current technology. This has, therefore, contributed to the production of affordable cars which are friendly to the environment and emit lesser energy.
In terms of management, technology has boosted the open access to information. In this regard, the company is able to study what other competitors are doing and how customers react to their products. However, Tesla still lacks behind in technology as compared to other companies. For example, Delphi Automotive and Harman International Industries. It is, therefore, evidenced that the integration of technologies by the company has impacted positively.
More implementation and installments of such technologies would further result in greater innovations and quality management.
Mainwaring, S. (2016, April 07). The Elon Musk Leadership Model: 3 Key Steps To Building
Radical Brand Evangelism.
This article talks about leadership style Musk adopts while running the business activities of Tesla. It explains how musk is dedicated to achieving the target goals of the company. Musk is explained as a transformational leader. He has an incredible vision, dedicated, and perseveres all conditions as he strives to actualize his vision. Also, he is able to influence people to believe in his vision. He is said to be a leader who cannot conceive failing.
His remarkable vision and drive make his leadership style more meaningful. Concerning this, he can change the minds of his employees to work more positively in project development. As a result, productivity is improved and commitment of the employees to their duties promotes quality production.
In all his innovations, Musk aims high on the target achievements of the industry. Solar City, developed to aid battle global warming, has been ranked as the second position among other solar suppliers in the US. With Tesla, he developed inexpensive electric vehicles which shifted them to three times above supercharger centers. He allows other fellow manufacturers to utilize Tesla’s technology patents to expand electric cars industry. As an example of transformational leaders, Musk conflicts with other leaders who resist change[SJ4] . He is also able to spot problems and parts that are not functioning effortlessly more than his fellow leaders. For example, he was able to realize the problem causing disapproval of California High-Speed Rail system. Musk helped plan and proposed owned Hyperloop with the assistance of engineers from Space X and Tesla. They developed a standard system which is faster and allows commuters to travel and this takes shorter time than an airplane.
Thus, his leadership style and qualities have assisted in the growth of the company. Furthermore, he has leaded his company to face competition from other developed manufacturers. This has enabled the company to get a large share of the market. As a result, more profits are generated to the company which stimulates its growth internationally.