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Product cover image for Tesla at a Crossroad: Leadership, Politics, and Reputational Risk

Tesla at a Crossroad: Leadership, Politics, and Reputational Risk

Pitabas Mohanty, Arpita Srivastava

Product #:W44676
Supplier:Ivey
Discipline:Organizational Behaviour/Leadership, Strategy
Setting:United States, 2025
Details:Case (PDF) • 13 pages • 2025-07-07

Subjects:

Organizational cultureOrganizational behaviorStrategy

Industries:

Fabrication and manufacturing

Geography:

United StatesNorth America
Your Price:$10.54

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In March 2025, Elon Musk, the chief executive officer of Tesla faced public criticism due to his political involvement, particularly in the position of head of the Department of Government Efficiency within the newly elected administration of US President Donald Trump. Protests and concerns about the company’s brand created a complex situation that placed Tesla’s board of directors under pressure to act. Board members had to decide how to address these issues, considering Musk’s foundational contributions to Tesla’s innovation and market position. The board had three potential paths to pursue: maintain the status quo, impose new governance conditions, or initiate CEO succession planning.

Learning Objectives

This case is ideal for a corporate governance or strategic leadership course at the senior undergraduate or MBA levels, after students have been introduced to foundational concepts such as board responsibilities and stakeholder theory. It can also serve as a capstone case for discussions on leader control and reputational risk. The case facilitates discussion on the governance risks of charismatic leaders, the strategic implications of CEO overreach, and the fiduciary tensions faced by boards managing reputational risk, offering students an applied analysis of several key business concepts. Ultimately, the case asks students to develop and justify a recommendation for the board, balancing the need to mitigate risk with the goal of securing the company’s long-term interests.

After completions of this case, students will be able to
  • evaluate the concept of “key person risk” and potential mitigation strategies in the context of a leader or CEO (pertaining to strategic leadership);
  • develop and justify strategic recommendations for a board facing complex leadership and governance challenges (pertaining to strategic leadership);
  • assess the fiduciary responsibilities and ethical dilemmas faced by a corporate board overseeing a controversial CEO (pertaining to board governance);
  • analyze how governance issues and reputational risk can impact investor sentiment and market valuation (pertaining to board governance); and
  • analyze the impact of a high-profile CEO’s actions—political involvement in particular—on corporate reputation, brand image, and stakeholder relations (pertaining to stakeholder management).
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Case Study: Tesla at a Crossroad: Leadership, Politics, and Reputational Risk (English version) | Ivey Publishing