Contemporary Business Environment

BUS4010

Contemporary Business Environment

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Introduction

This report examines the structures, operations, and challenges of two global organisations: Tesla and Unilever. The analysis begins by examining their legal structures, stakeholders, and how digitisation changes their functions and strategies. Based on this, leadership and management theories can then be applied to identify the leadership challenges that companies such as these face in today's changing business environment. The report explores the microeconomic and macroeconomic forces driving their organisational behaviour and the general national economy, reflecting how Tesla and Unilever deal with some of the global key issues of cultural diversity and ethical decision-making.

Task 1: Organisational Structures, Digitisation Impact, and Leadership Challenges

1.1 Types of organisational structures, and key stakeholders

Tesla: Public organisation

Tesla is a publicly traded company based on the NASDAQ stock exchange, this means that the company belongs to the shareholders and operates in line with the main objective of adding value for its owners. In its organisational structure, the organisation adopts a functional one where employees are gathered according to their job functions, such as engineering, sales, marketing, and customer services (Strauss and Smith, 2019).

Figure 1 Tesla's logo

Source: (tesla, 2023).

• Operations and Purpose: The main aim of Tesla is to accelerate the world's switch to sustainable energy via its electric cars and other solar energy-related products. Tesla conducts its operations through research and development, manufacturing, sales, and customer care.

• Vision/Mission: In describing its mission, Tesla says "accelerating the world's transition to sustainable energy." Therefore, its mission aligns well with what defines the company: innovation and ecologically friendly products (López Espinosa, 2019).

• Environmental Forces: Tesla is facing intense environmental pressures in the form of climate change regulations, competition from traditional automobile manufacturers as well as from new entrants in the form of electric vehicle manufacturers, and supply chain difficulties emanating from sourcing materials for its battery production.

• Post-COVID-19 Issues: The COVID-19 crisis disturbed the production as well as the supply chain businesses of Tesla. However, it responded with an increase in online sales, contactless delivery, and its website (Pató, Herczeg, and Csiszárik-Kocsir, 2022).

Unilever: Public Multinational Company

Unilever is a global multi-national company, also publicly listed, in the consumer goods sector. The company is structured as a matrix, which combines product divisions such as food and personal care with geographic regions that allow easy management of a portfolio of diverse products based on regional markets (Kpoku, 2021).

Figure 2 Unilever's logo

Source: (Unilever, 2023).

• Operations and Purpose: The operations of Unilever involve the manufacture and distribution of consumer goods that range from personal care products, food, and beverages to cleaning supplies. The purpose is to make sustainable living commonplace through its products.

• Vision/Mission: The mission/vision of Unilever is stated to "make sustainable living commonplace," which means embracing sustainability in every operation and product (Lohin, 2023).

• Environmental Pressure: The level of environmental pressure at Unilever noticed was sustainability, scarce resources, and the desire for a good conscience for consumers.

• Post-COVID Challenges: The business was adversely affected by its global supply chain disruptions and altered consumer choices to buy essentials. The firm responded through agile supply chain management, increased digital interaction, and emphasising e-commerce channels (Cheng, 2021).

1.2 Stakeholders: Tesla and Unilever

Tesla Stakeholders:

• Shareholders: Their interests rest with profitability and long-term growth anchored in innovation.

• Customers: They demand high-quality sustainable products-the advanced electric cars.

• Employees: Anticipate an innovative culture and reward for performance.

• Suppliers: Materials as crucial in batteries like lithium and cobalt must expect timely payments and long-term contracts.

• Governments/Regulators: Want to stick by the various regulatory milestones, especially, on emissions and renewable energy utilisation (Sharma, 2016).

Unilever Stakeholders:

• Shareholders: Desires for high-profit margin coupled with the ever-rising scope of sustainability for companies.

• Consumers: High-quality product, affordability, and sustainability

• Employees: A need for fair wages, opportunities for growth, and ethical business practices.

• NGOs and Local Communities: Expect Unilever to follow up on environmental and social responsibility in business practice.

• Suppliers: Relies on long-term relationships and fair-trade practices, particularly in developing economies where it conducts operations (Iglesias et al., 2023).

1.3 Digitisation and Structure, Operations and Strategies

Figure 3 Tesla's and Unilever’s digitisation

Source: (ARC, 2022).

Tesla: Impact of Digitisation

Tesla has placed digitisation at the centre of its business model. It utilises IoT in actual operating capacities. Software installed in Tesla's electric cars helps have over-the-air updates, remote diagnostics, and self-driving modes. In that sense, Tesla's products are nothing but connected devices making up a digital ecosystem that enhances user experience through software updates.

• Impact on Structure: The functional structure of Tesla now has software engineering and AI development at its cores. Of itself, the digitisation thrust of the company has paved for the development of departments focused on software, data analytics, and autonomous driving.

• Impact on Operations: Tesla is completely dependent on automation in its digitised production process at its Gigafactories as it has robots and AI which implement the most efficient usage. The company has also utilised e-commerce, where it sells its cars directly to the final consumer with no dealership model.

• Impact on Strategy: The strategy of Tesla has now risen to be a continuous innovation effort in the software capabilities with digitisation playing an important role in the areas of autonomous driving as well as energy storage solutions. The firm applies big data analytics to developing product performance and customer satisfaction (Wynn and Felser, 2023).

Unilever: Impact of Digitisation

The company has followed the same trend as digitisation; primarily in its chain of supply management and marketing processes. The company has since infused e-commerce, social media marketing, and big data analytics to optimise performance and realise consumer tastes and preferences.

• Structure Impact: Unilever's matrix had evolved with digitisation: the data analytic and e-commerce teams that the company had kept divided from its digital marketing. The company uses collaborative digital tools to ensure effective communication among its product divisions and regional markets.

• Operations Impact: To Unilever, supply chain management takes the data quite seriously, where it has an opportunity to apply knowledge to the optimisation of its digital tools about inventory, distribution, and the production process. This has enabled the firm to cut costs and increase efficiency at a global level.

• Impact on Strategy: Being eBusiness and eCommerce-focused in its digital strategy, Unilever can reach its consumers directly through such multimedia platforms. Moreover, it uses social media technologies to engage with customers, pass sustainability messages, and change its products to fit changes in consumer preferences (Shaheen, 2020).

1.4 Leadership and Management Theories and Challenges

Tesla: Transnational Leadership and Scientific Management

Tesla's leadership style is heavily influenced by transnational leadership theory, this one espoused by Elon Musk. Transnational leadership has been said to inspire employees to accomplish more than they thought possible and to innovate because of excellence. The main characteristic that propels Tesla into the disposal of the status within the industry is Musk's much-cultivated futuristic vision of sustainability. Tesla's reliance on transformational leadership by Musk has its advantages and disadvantages. On the one hand, it has been driven by innovational vision, as embodied by Musk. However, the same style of leadership, characterised by high risks and mistakes, frequently compromises operational stability. The fast-paced growth into innovation would be very straining for workers and may lead to higher turnover and burnout rates. Regarding management theory, Tesla applies scientific management, particularly its manufacturing processes. The company puts automation and data-driven decision-making into the Gigafactories to realise maximum efficiency. Nevertheless, there is a balance between efficiency and quality, hard to maintain especially in an intricate supply chain due to electric vehicle production (Hashimy et al., 2023).

Unilever: Situational Leadership and Systems Theory

Figure 4 Unilever's leadership theory

Source: (Unilever, 2022).

Situation leadership theory is founded by the leadership approach of Unilever, where leaders' adaptability depends on the situation. Consequently, in this regard, Unilever's leaders must be adaptable and responsive to the different needs in the culture and markets that exist in all regions where it is operating. Managing an almost spread cross-national diversity of workforce across many countries with their specific cultural, legal, and economic conditions is a challenge for the leadership at Unilever. In addition, the leadership must deal with the conflicting demands of maximising profits and maintaining ethical sustainable practices. From the theory of management, Unilever has adopted the systems approach, which treats an organisation as a network of departments, regions, and products. The system approach is advantageous, as it keeps the operations of Unilever all over the world coordinated and efficient, but managing such a big, extensive organisation is hard in terms of consistency and balance among all the regions (Magagan and Ngugi, 2021).

Task 2: Microeconomics, Macroeconomics, and Global Issues

2.1 Microeconomics and its Impact on Organisational Behaviour

Microeconomics investigates the issues of decision-making at an individual and firm level, hence reflecting their impact on organisational behaviour. One of the main concepts used in microeconomic theory is supply and demand which acts as a high point for organisations seeking to operate in highly competitive markets.

Supply and Demand: Prices and the quantity of goods or services produced in the market depend on supply and demand. For example, Tesla is very sensitive to the forces of supply and demand in the electric vehicle or EV industry. The demand for electric cars has increased steeply due to environmental concerns and government incentives. Supply is also bound by raw materials for its batteries and capacity for production within the Gigafactories of Tesla (Kallitsis et al., 2024).

Figure 5 Supply and demand at Tesla

Source: (Statista, 2019).

Organisational Behaviour Impact: Tesla needs to change its production volume and pricing to accommodate the growing demand for EVs. Moreover, Tesla also competes with other EV manufacturers and, therefore, needs innovation and streamlined production to sustain its competitive advantage. At the firm's organisational levels, Tesla needs to efficiently utilise its resources by relating its costs of producing to growing market demands, which influence organisational behaviour and decision-making activities (Totlani, 2023).

2.2 Macroeconomics and its Impact on Organisational Behaviour and the National Economy

Macroeconomics is defined as the study of general factors that affect the national and global economy. Fiscal and monetary policy can be named as one of the several important elements that have an impact on organisational behaviour and economics.

Fiscal and Monetary Policy: This implies that fiscal policy, which involves the spending and taxes controlled by the government, affects the overall economy, just like monetary policy, which involves the rates of interest and money supply controlled by the central banks. For instance, tax breaks bestowed upon electric vehicles do a lot directly to incentivise Tesla and boost demand for its products, unlike the interest rate policies of the central banks, which directly impact lending rates at Tesla and consumer finance to buy EVs.

Effects on Organisational Behaviour and National Economy: Tesla benefits from favourable fiscal policies in terms of tax credits for electric vehicles, increasing demand and, hence, production. The risk of high inflation or soaring interest rates means that increases the cost of borrowing, and, hence, would impact the expansion. On a macroeconomic level, these pressures on the organisation would create flows for the organisation in terms of investment and consumption - having a hand in shaping the national economy. For example, a monetary tight policy influences consumer expenditures on luxury or discretionary goods like electric cars and in this respect; it will influence sales by Tesla (Graham, 2021).

2.3 Global Issues and Their Impact on Organisations

Cultural diversity and ethical decision-making are one of the global issues that most organisations in today's interdependent world are anxious about. These issues determine what organisational strategies are, stakeholder relationships, and the ability to conduct business in other markets.

Global Issue 1: Cultural Diversity

People like the organisational environment when their organisation presents them with a cultural identity that counts in this globalisation era. Organisations, such as Tesla and Unilever, are going across the globe. Both organisations have already spread and are operating in different regions with different cultural values, languages, and ways of doing business. This heterogeneity must be managed so that clear communication, innovation, and employee satisfaction are enhanced.

Tesla's Approach towards Cultural Diversity: Tesla has taken a huge step forward in the line of diversity, particularly in its offices and manufacturing industries across different countries. The company considers diversity as something that will promote innovation and even informed decision-making. Tesla has embraced diversity initiatives and taken inclusion hiring practices on board to attract and retain people (Turner et al., 2020).

Unilever's Diversity Strategy: It is indeed a multicultural workforce at the global front of Unilever. The corporate responsibility of Unilever includes diversity and inclusion in its "Unilever Sustainable Living Plan." A worldwide unification of people from various cultures is developed at work so that it may support the vision of Unilever in delivering sustainable products across the globe (Kusuma, Barus, and Pranawukir, 2024).

Global Issue 2: Ethical Decision Making

Ethical decision-making is regarded as the most vital element in maintaining trust and accountability in the global business environment. Tesla and Unilever face ethical challenges regarding sustainability and transparency, among other issues.

The ethical decision-making of Tesla: Tesla has been confronted with constant criticism regarding its ethical practices due to cobalt-sourced batteries, where cobalt sourcing is linked with child labour problematically. A remedial effort in its supply chain and transparency that characterises Tesla in sourcing practices have counterbalanced such criticism. Sustainability also aims to reduce carbon footprints through the usage of renewable energy and electric vehicles (Etienne, 2021).

The Unilever Group has a long history of commitment: To their business ethics, especially about sustainability and fair trade; The group has instituted different programs focused on responsibly sourced ingredients, reducing plastic waste, and ensuring proper practices about labour in supply chains. Emphasis on ethical decision-making improves the brand image of Unilever and fosters sustainable growth (Priyana and Jasuni, 2022).

Conclusion

Tesla and Unilever show how organisations adapt to the changing challenges of the business environment through digitisation, strategic leadership, and management. For example, it undertakes various microeconomic and macroeconomic forces in operations and the national economy, from supply and demand dynamics to fiscal policies. On top of that, the global issues encompassing cultural diversity and ethical decision-making have importantly influenced their success on a global level. Hence, through the coordination of their operations with such forces and issues, Tesla and Unilever will continue to experience competitive advantage and contribute to sustainable responsible business practices in the global market.

References

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