Elon Musk faces scrutiny over his direct involvement in the hiring and firing processes at his companies, raising questions about the legality and efficiency of his management style.
What Happened: The management approach of Musk has come under fire, with his hands-on role in personnel decisions at companies like X and Tesla Inc. TSLA attracting criticism and legal challenges, Business Insider reported on Tuesday.
Alec Levenson, a senior research scientist, points out that while companies can be financially successful despite management flaws, better management could boost financial performance without hurting profits. He notes that Musk’s deep involvement in hiring and firing is seen as a potential legal issue and a sign of mistrust in his management teams.
“To have one of the most successful entrepreneurs and someone who’s running two very important organizations get down into the weeds like that is the worst use of his time,” Levenson said.
“What that says is that you don’t trust anybody that’s sitting in management — all the layers between you and them.”
Experts recommend fostering open communication within companies to address employee concerns and reduce the negative effects of direct intervention by executives like Musk in human resources matters.
“I guarantee you the results would be that much better if the management practice is improved and you can do it without hurting the bottom line,” Levenson suggested.
Why It Matters: Concerns about Musk’s leadership style have been mounting. A private investment firm CEO recently highlighted “cracks” in Musk’s leadership at Tesla, pointing to a “cultural immaturity” surrounding his behavior.
These concerns were exacerbated when Tesla reportedly laid off over 14,000 employees in April, a move that Musk lamented as something he hates. Despite this, Tesla saw an increase in job applications in 2023, even amid reports of poor working conditions and layoffs.
Shortly after the mass layoffs, Tesla appeared to shift gears, revving up its hiring engine with a focus on Autopilot and robotics. This move suggests a strategic pivot in Tesla’s workforce planning, aligning with the company’s long-term technological ambitions.
Photo via Shutterstock
This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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