Business
2016-07-23
Introduction
This paper is devoted to the issue of the companies of Elon Musk and Tesla and their compliance with the Moral Compass (Elon Musk’s Empire, 2016). The chosen news is related to the personal and corporate integrity.
It should be noted that personal interests as well as professional interests can impact on the company. In this case, expression and defending each of own interests by the business entity can lead to a phenomenon that is called a conflict of interests. Entering into transactions with each other, every company seeks to realize selfish interests, which may not coincide with the business interests of other partners, and even directly contradict them. So companies are forced to defend their selfish interests, essentially forcing them to other partners or stakeholders.
Let’s analyze personal and corporate integrity in more detail and their possible impact on the companies (Tesla and SolarCity) and their shareholders.
Discussion
Management, as a very specific activity, requires managers and directors to take care of the limits and consequences of their actions. Ethical issues are complex and contradictory. It is not always that a person, whether he is the entrepreneur-owner, manager or employee, is able to independently solve ethical issues.
Corporate integrity and a commitment to responsible and ethical business practices are central elements of any business. The integrity and the truth are directly related to the ability to successfully apply the learned techniques. At the same time, the personal integrity assumes that the manager or director will use only honest approaches as well as principles of the business ethics in commercial activity.
Some of them, trying to make a reasonable “body” of the company and to civilize its spirit, build an integrated corporate system of the principles: they develop documents and related policies, programs, practices, implement a special infrastructure (positions, departments, lines of communication).
In this case, the decision of Elon Musk about purchasing SolarCity should describe the stakeholders the possible positive consequences for the company Tesla and that he does not question the corporate integrity and he is not driven by the personal interests (Levy, 2016). Otherwise, the investors will not vote for the purchasing and Elon Musk will lose his influence on them.
It should be noted that personal integrity is on the second flow in the pyramid of the building of the conscientious business or commerce. At the same time, personal integrity can be considered as the self- awareness and self-discipline in the performance the moral power. From the view of the personal integrity one can say that Elon Musk differs by greater self-awareness, because his funding of the company Tesla in 2008 has saved it from the crisis and bankruptcy. At the same time, Elon Musk can make decisions, which meet not only the corporate needs, but his personal ones too (as it can be with the company SolarCity).
In this case, the position of Elon Musk must be supported by the managers, who are responsible for corporate integrity and compliance with the ethical principles of the company Tesla (Tesla Team, 2016).
The corporate integrity can be presented as a set of ethical principles and norms that the company should guide in its activities. It usually covers the phenomena of different rules: the ethical assessment of both domestic and foreign policies of the organization as a whole, the moral principles of the members of the company; morale in the organization; moral behavior patterns; rules of business etiquette and others.
In general, public perception of corporate integrity and social responsibility over the last century has passed three main stages:
management aimed at maximizing revenues (it was popular to the second quarter of the twentieth century);
caregiver management (it has become popular from the 1930s): the company cares about its employees and their families, as it leads to higher productivity and profitability;
social management (it has arisen in the 1960-1970s.): the company is responsible to the society as a whole and the stakeholders (interest groups) in particular.
Thus, one can say that decision of Elon Musk does not comply with the views of all investors. In this case, the conflict of interests arises. The hardened in extremely aggressive environment moral traits of Elon Musk are significantly lower than in other professions, despite the fact that his actions and decisions can impact on the life of many people (Hawkins, 2016).
The interests of the company Tesla are meant as a conscious need for tangible and intangible benefits, as well as in ensuring the conservation and playback access. Business interests determine the goals set by the director or CEO, and the content of the business activity to achieve those goals. At the same time, defending the business interests of the company Tesla, Elon Musk mobilizes and develops his professional and personal traits.
The professional traits can be considered as a set of knowledge, skills and experience that is acquired in preparation for business activities (in the process of learning, training, re-training), as well as in the implementation of the business activity. The personal traits mean the totality of the intrinsic characteristics of the people that can be discovered and developed in the course of their business activities. It can be striving for the welfare of, the natural selfishness, the propensity to exchange, the spirit of competition, creative principle, the ability to make a choice, the tendency to copy, thirst for justice, a sense of ownership, commitment to improving the personal competitiveness, natural humanism.
In our case, investors can suppose that Elon Musk guides only by personal interests (for example, striving for the welfare of, the natural selfishness, the saving the SolarCity from the possible bankruptcy) in the purchasing the company SolarCity. Such position can negatively influence on the investors and on the company Tesla as a whole.
Given the fact that each company must provide itself with the necessary benefits, it subjects own business activities by the selfish interests. Therefore, at first glance, the main target of the company Tesla should be the defending of the selfish interests, which are understood as a recognized need to provide relatively better conditions of access to tangible and intangible benefits and a relatively better position in the implementation of transactions.
Implementation of self-interest is always associated with the extraction of profit. Benefits drive director or manager, when they enter into a business relationship. Thus, selecting the transaction that Elon Musk wants to perform must be driven by profit. This benefit can be in the form of benefits or access to benefits. On the other hand, many experts consider purchasing of the SolarCity is a quite dangerous decision for the company Tesla (Fernholz, 2016).
The standard company and its CEO defend their interests. Their main goal is to guarantee the relatively better conditions of existence in comparison with the other business entities. As we know, the selfish interests compel every company to strive for continuous strengthening and reproduction of their economic situation in comparison with other economic subjects on the market. These interests are usually expressed in three main goals of the business activities:
preservation, consolidation and increasing own property;
reimbursement of costs and maximizing profits;
preserve and strengthen of own personal competitiveness as a participant in deals compared to the other participations of the transactions.
Sometimes only one purpose of the business activity is seen in the incomes of the company. This point of view is incorrect and significantly narrows the range of objectives that are inherent in different companies and their activities. At the same time, businesses are not only carriers of selfish interests, but also the public ones. Corporate integrity is expressed in that.
According to experts, one of the essential elements of the implementation of the corporate integrity and an important tool for internal control in the company is a feedback system or the so-called signaling within the company. This area is the most difficult to implement in the company organically (Fernholz, 2016). With this system Elon Musk could predict the outcome of his decisions and actions, because making the purchase of the company SolarCity, the majority of the investors is unsure of the integrity of decisions and in the further successful development of the company Tesla as well as SolarCity.
Conclusion
In conclusion one can say that decision of Elon Musk about purchasing the company SolarCity is quite contradictory. The majority of the investors is unsure in the positive results of such merger. Such news is related to the issue of the personal and corporate integrity. The view of Elon Musk does not comply with the corporate moral principles. In this case, the further depression of both companies will adversely impact directly on the person, Elon Musk.
References
Elon Musk’s Empire,. (2016). Tesla’s purchase of SolarCity is a bold bet, but a worrying one. The Economist. Retrieved 18 July 2016, from http://www.economist.com/news/business/21701181-teslas-purchase-solarcity-bold-bet-worrying-one-clouds-appear
Fernholz, T. (2016). The real reason Elon Musk is bringing Tesla and Solar City together. Quartz. Retrieved 18 July 2016, from http://qz.com/723125/the-real-reason-elon-musk-is-bringing-tesla-and-solar-city-together/
Hawkins, A. (2016). Tesla buying SolarCity is a dangerous risk that could totally pay off for Elon Musk. The Verge. Retrieved 18 July 2016, from http://www.theverge.com/2016/6/22/12003316/elon-musk-tesla-solar-city-deal-model-3-powerwall
Levy, A. (2016). Elon buying Elon: Sounds a lot like the premise of a video game. CNBC. Retrieved 18 July 2016, from http://www.cnbc.com/2016/06/21/elon-musks-tesla-buying-musks-solarcity-sounds-crazy.html
Tesla Team,. (2016). Tesla Makes Offer to Acquire SolarCity. Tesla.com. Retrieved 18 July 2016, from https://www.tesla.com/en_EU/blog/tesla-makes-offer-to-acquire-solarcity?redirect=no
