Short-term and long-term strategic planning

Bryson (2018) has stated that planning before proceeding is the key to success and the case with organizations are no different. Hence, the organizations plan for every possible action and ongoing operations to sustain itself and in the process enhance its productivity. The deemed report is devised to offer an insight the management plans like strategic, program and others for the American sustainable energy car makers’ Tesla Motors. The deemed organization is known for its innovative approach towards its operations and products. The subjects’ plans have been evaluated and analyzed to earn a clarity over the management approaches. The report also suggests the approach that the organization should adopt towards conflict and change management. Finally, the report has been concluded with an evaluation over the resource utilization approach of the organization.

Strategic planning of the organization is its approach to defining resource allocation for operations to obtain the goals of the organization while maintaining its visions and organizational ethics (Cassidy, 2016). The deemed planning is of vital importance as it designs a guideline to keep the organization sustainable and achieve the defined goals. Tesla Motors is known for its different and innovative approach, and hence the same can be assumed about its strategic planning. The strategic planning of the organization has been in flux and unclear to most of the evaluators. However, after the launch of the Model 3, the ingenious plan of the deemed organization came to light.

The short-term strategic plan of the deemed organization at the initial stage was to bring innovative technology to attract the customers. The organization also kept its targeted audience only limited to the rich people.  Keeping the audience limited enabled the organization to create a brand name for itself. The resources allocation was also focused towards the quality production and not over the quantity. The above-stated statement can be verified by the fact that only six components of a Tesla car need replacement than other cars. However, the long-term strategy of the organization was to generate capital to fund the mass production of the plan.

Elon Musk CEO & Co-founder of Tesla motor in a statement on the company’s blog stated: “Our long-term plan is to build a wide range of models, including affordably priced family cars.” (Musk, 2006). The deemed plan remained unnoticed for long though with the introduction of Tesla Model 3, the same came back into the light. The long-term strategic plan of the organization took consideration of the broader target by introducing cheaper car. The stated fact is evident from the fact that yearly production target of the Tesla Motors has jumped up from 50,000 units per year in 2015 to 500,000 units per year in 2018 (Wolfram & Lutsey, 2016). The company had to compete with major firms like Ferrari and Porsche, and hence, it developed its strategy learning from their strategy and modified it to suit its own.

Strategic capacity planning and resource utilization

The plan to bring in the necessary change in the resources and hence production of the organization depending on the demand from the market is Strategic Capacity Planning. The deemed strategy is of great significance as it can be considered as the primary block of sustainable development of the firm (Koren, Wang & Gu, 2017). The resources mentioned in the first statement is not limited to the materials required for the production. It expands from the human resources to the financial and informational resources as well. Tesla has prepared its capacity planning along with its strategic plan which is visible from the latter. The reason for stating the same is the fact that Tesla developed its capacity to store resources and has jumped into mass production as per the market demand.

 Through, successful implementation of the strategic planning the deemed organization increased its capacity of the financial resources and hence material resources. However, in the concerning years, the organization has also been working towards developing its other resources. To increase the capacity of its human resources, the organization has been hiring different skills through advertising and other modes. It is evident from the fact that the organization has hired Peter Hochholdinger, former Audi executive to increase its capacity for human expertise (Boudette, 2018). The hiring of the Peter has also contributed to the informational resources of the organization as he will offer his experience from Audi to a more appropriate informational use.

Further, to enhance the financial capacity of the organization, Tesla has decided to sell the company’s share worth $ 1.4 billion (Boudette, 2018). The step is taken to meet the demand of Tesla Model 3 in the market. The deemed organization is also establishing Gigafactory, a lithium-ion battery manufacturing plant capable of producing 35GWh of batteries to meet the target of producing 1 million vehicles by 2020 (“Tesla Gigafactory | Tesla,” 2018). All these measures by Tesla are to ensure that it meets the strategic plan and it also cites a reference to the strategic capacity planning of the organization.

Portfolio Management processes are the methods and techniques that the organization adopts to meet up with the investment goals (Killen et al., 2012). The process is not limited to the statement above; it also merges or parallelly operates the projects based on their compatibility to preserve the economic resources of the organization for future use. Popovi?, Stanujki? & Stojanovi?, (2012) has stated that to achieve the deemed objective, the organization needs to consider following three practices (i) Measure the ROI (return on investment) from the projects, (ii) Balancing the associated risk with projects and (iii) Selecting the plans that contribute to the strategic planning of the organization.

Portfolio management, project selection and investment evaluation

Tesla as part of the portfolio management processes evaluates its management processes related to the unwanted circumstances such as accidents, contract transfers, termination, life cycles of the project and others. The deemed organization also assures the success of the product before starting the operations to launch it in the commercial market. To establish the deemed objective, the organization analysis the market and the trends that are affecting it along with the pros and cons that are associated with the same.  The results from the evaluation of the market are then analyzed to reach a concluding decision related to the project and the investment.

Along with the above mentioned facts the deemed organization also considers finance related queries, lease issues, compliance and a check on money laundering as part of the deemed process. Other financial processes are also included in the process, however, the most significant of them all monitoring the flux in the investment requirement of the projects (Teller et al., 2012).

The criteria for project selection varies according to the environment and the resources of the organization (Wolf & Floyd, 2017). The deemed process is adopted to ensure the success of the project and in the process avoiding potential exploitation of the resources. However, some criteria are kept constant for all the organizations namely, ROI, Net Present Value (NPV), Internal Rate of Return (IRR) and others. Organisational goals and availability of the resources are the criteria that vary accordingly with the organization. Tesla Motors also follows the method and only initiates if the criteria for the project are met. Additionally, Tesla has also added another criterion in its project selection which has been discussed along with other criteria have been discussed as follows:

• ROI:It can be considered as the first factor that any organization witness before initiating any project (Silva et al., 2013). The organizations are producing goods to earn revenue from it, and hence it is evident that they will notice the same.
• NPV: The NPV of a project is a method of determining the ROI. It measures the ratio between the current investment and the return offered by it after completion based on the value of money at the time of completion (Wolf & Floyd, 2017).
• IRR:The deemed criteria is used to evaluate the attractiveness of the project in the commercial market (Wolf & Floyd, 2017).
• Organizational goal:The goal of Tesla is to provide innovatively, and quality product to the consumers and hence, compatibility with the organizational goal is a criterion for project selection.
• Resource availability:Availability of the resource is another criterion for the project selection which is evident from the delayed deployment of cost-efficient cars from Tesla.
• Tesla Secret criterion:Tesla’s secret criterion for project selection is the scope of innovation in the project. Tesla approaches the stakeholders as well as its sister firm SpaceX for possible innovative factors (Dyers, Gregersen & Furr, 2015).

The plan devised by the organization to govern over all the programs of an organization is known as program management plan. It consists of an outlined document that states the operational, execution and controlling of the program. The document also acts evidence to all the eventual approved variations of schedule, success criteria, scope, budget and the benefits at the instance of conclusion and assessment of the program (Kerzner, 2013). The plan is devised based on the input from the stakeholders, researches on the same, external subject matter expert, program governance, and others. Program management differs from project management as the former is focused on the benefit, governance, and relationship with the stakeholders. However, the latter concerns with scope, time and cost associated with the project. Tesla has a particular focus on the program management as they believe in quality rather than quantity which develops the need for quality assurance that is the part of deemed management planning.

Program management planning and quality assurance

Program management in Tesla Motors supervises over assessing of risks periodically, identification and execution of significant projects devised to manage the risk, improving compliance and processes along with reducing the operational cost (“Program Manager – Advisory and Assurance | Tesla | Tesla”, 2018). The evaluated outputs from the plan are then shared with senior officials along with recommendations for the change or sustaining the operational methods.

Conflicts in the organization are not just a threat to the productivity of the organization but the environment as well which will induce long-term adverse effects on the organization (Moore, 2014). Hence, it is necessary for the organization to resolve the conflict as soon as possible. To achieve the deemed objective, it is mandatory for the organization to devise a plan to resolve the conflict in the least possible time. The conflicts can arise from various factors. However, the most common factors are cost, schedule or quality of the product. Hence, the following section will offer a conflict management strategy for the same.

The first step in resolving a conflict is to identify and understand the cause of conflict (Al Ramiah & Hewstone, 2014). For identification of the conflict, the management should get involved with the stakeholders and the one(s) responsible for the conflict. After the identification, the next step would be to evaluate the base of the conflict and whether it violates the organizational vision and professional ethics or not. In case, the organizational vision may get compromise due to the demands of the malefactor than strict actions should be taken against the same.

On the contrary, if the demand of the conflict is genuine and none of the sides are at wrong than the management should equip negotiation technique (Moore, 2014). An unbiased official should be given the authority to crack a deal between both the parties. The official will also have to keep in mind that both the parties if not entirely but to a percentage should be happy with the outcomes. The reason for stating the same is that one of either party will have to compromise more than the other. Conflicts can also arise between the ethical factors and organization’s product. In that case, an interactive way should be determined to resolve the conflict.

Changes , if not applied appropriately can result in conflicts or other undesired situations for the organization (Kerzner & Kerzner, 2017). Hence, it is mandatory for the organization to plan before bringing in any change in the organization. Change management plan of the organization is devised for the same. The most significant reason, why the changes can result in chaos or conflict is the insecurity among the employees. The insecurities are related to the loss of job or respect. The reason for stating the above-made statement is the fact that if the change is related to new technological adaptation, it will demand skills which the employees do not have, and hence they fear the loss of job or designation.

Conflict management strategies

Tackling the chaos aroused due to the technical changes are the most complex and costly though it is worth the same. The management needs to approach to the lowest possible level and explain the need and how they are planning to develop the skill required for the same in the employees with the training and workshops (Hornstein, 2015). The change in the organization if related to the change in management also raises the concern between the employees. In the deemed situation the organization should reach out to the stakeholders and convey them, the need of change and how the change is going to influence the organization positively. Other changes also need planning, and for the same different available model for change, management planning can be adopted.

The McKinsey 7-S change management is one of those models. The 7-S of the deemed model stands for strategy, structure, system, shared values, style, staff, and skills (Van den Berg & Pietersma, 2015). These seven factors are analyzed to devise the plan accordingly for the firm. The reason for stating it to be the most suitable model for the Tesla Motors is the fact that the deemed organization believes in innovation and is ready to adopt innovative ideas in the project at any moment in the project. Additionally, the deemed model is also suitable for the organizations who know how to change for better and hence the recommendation.

 Resources are the basic block of any organization, and hence they should be utilized with appropriate care and responsibility (Pasquale et al., 2012). Organizations for the deemed purpose devise resource utilization plan. The plan enables them to utilize their resources to their full potentiality and hence increasing the productivity. The image  below shows the process to utilize the resources to their full extent:

The steps above represent the stage associated with the deemed plan. In the first step, the organization needs to identify its resources and their role accordingly followed by the second stage which weighs their usage in the project that is being planned. The third stage measures the limitation of the resources with accordance to the project which is then analyzed to minimize the limitation and enhance the productivity of the resources, in the fourth stage of the process. The final stage prepares the concluding draft for the utilization of the same.

The plan is divided into different categories accordingly with the resources (human, materialistic, financial or informational resources). The table shown below shows the resources and their utilization plan.

Change management planning and implementation

Table1: Evaluation of Resources and its Utilization

(Source: Created by Author)

Conclusion:

The devised report has offered an insight on the innovative method that one of the most revolutionary organizations of the century, Tesla Motors have adopted to enhance and sustain its business. After the evaluation of the strategic planning of the organization, the master planning of the organization is evident. Managing of the resources and project selection criteria of the organization also demands appreciation. The author of the report has also offered a suitable approach to manage conflicts and change in the organizations. Approaches for utilization of the resources to their full extent to garner increased efficiency has also been recommended in the resources. Hence, in conclusion, it can be stated that the deemed organization follows an innovatively strategic approach towards its operation and stakeholders. The same reason can be cited as the reason for them being one of the most successful enterprises in today’s commercial market.  

References:

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