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Alibaba Group:a Case Study of Alibaba's Outstanding Culture

Essay by   •  December 20, 2011  •  Case Study  •  4,833 Words (20 Pages)  •  3,138 Views

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Divine Sword of Six Vines" and "3% Attrition Rate"

Abstract: In this group report, we begin by introducing the two major differentiating characters of Alibaba: an unique culture and high commitment of employees and managers. Thus we are interested in if there is positive relationship between them. Next, we analyze the three components of Alibaba's culture in detail. Then, from both the theories and facts we demonstrate the positive relationship. The following comparison of EBAY and TaoBao further illustrates this point. At the end we figure out some major challenges Alibaba is facing in its internationalization process and give suggestions to better maintain its culture and thus strengthen the organizational commitment.

I. Introduction

1. Two major differentiating characters of Alibaba

1.1 A Unique Culture

 Brief description

 The organizational culture of Alibaba is quite different from normal IT companies;

 The management team really put a lot financial and managerial resources to reinforce Alibaba's culture and thus to really influence employees' behaviors rather than just let organizational culture be some mottos on the wall.

 Some interesting phenomenon

 Something really rare in companies in this industry: Lower pay with higher commitment; employees have a deep sense of happiness as well as the sense of cohesion and belonging; the corporate has high centripetal force.

 The company with the most smiling faces and the high execute power.

 A group of Internet sales staff stand for long periods every day in front of the cold phones and even dance and jump!

1.2 High commitment from employees and management team

 Brief description

 Alibaba has an scarcely low attrition rate compared to other companies' within IT industry:3% compared to 10%+.

 Jack Ma always proudly says that his team is the most stable team in the world!

 Some interesting phenomenon

 In 1999, Jack Ma decided to set up his own business "Alibaba", before leaving Being, he said to his fellows," I'll go back to Hangzhou to start my own business, if anyone wants to go with me, your salary is only 500 yuan; if you want to stay in Beijing, I can introduce you to Yahoo and Sina." However, all his fellows decided to go back to Hangzhou together with him.

 The management level of Alibaba Group is a gathering of website talents from almost 16 countries and regions. On the other hand, more and more graduates from Harvard University, Stanford University, Yale University are willing to join Alibaba. What's more, after so many years, all the 18 entrepreneurs who founded Alibaba with Jack Ma together still worked in the Alibaba Group even facing the attraction of three times salary offer from other companies. Jack Ma even joked about it, "If the company offers five times of the current salary, I think we should think about it."

2. Our Question

Can we find some relationship between these two major differentiating characters of Alibaba?

3. Our Analysis Logic

 Our assumption

Organizational culture of Alibaba is positively related with its organizational commitment.

 Analysis outline

II. The Organizational Culture of Alibaba

There are three major components to any organization's culture: observable artifacts, espoused values, and basic underlying assumptions. We can understand the differences among these three components if we view culture like a union. Figure 1 shows the three components of Alibaba' s organizational culture. We analyze each component individually in the following parts.

1. Basic underlying assumptions

Basic underlying assumptions are the taken-for-granted beliefs and philosophies that are ingrained that employees simply act on them rather than questioning the validity of their behavior in a given situation.

In Alibaba, these basic underlying assumptions are created by the leader Jack Ma and are presented through the statement of mission, vision and value of Alibaba. And now we are going to talk about the creation and the presentation of these basic underlying assumptions.

While all members of an organization can contribute to the development and maintenance of organizational culture, leaders play a particularly important part in influencing organizational culture, given their multiple and important roles.

And Jack Ma is with no doubt an extremely excellent example in setting and influencing his or her company's culture among Chinese entrepreneurs.

1.1 Jack Ma's role in creating Alibaba's Culture and Values

Jack Ma is the founder and chief executive officer of Alibaba.com, a pioneer in China's growing information-technology sector. He launched Alibaba.com in 1999 as an e-commerce site that facilitated business deals between small companies in China and the rest of the world. "Let the others go after the whales," says Ma. "We want to catch the shrimp." Four years later, he moved into consumer trading with Taobao.com, an auction site that quickly bested eBay as the homegrown favorite. Besides the e-commerce site, the technology channel provided by Alipay and Alibaba Cloud Computing play a supportive role, while Yahoo take advantage of its searching function to beat other sites like ebay. All these subsidiaries coordinate with each other to make a big success of Alibaba Group.

Usually, the company culture and the shared values are set by the founders. However, Alibaba‟s shared values are all raised by the members of Ministry of organization. Jack Ma asked the subordinates to brainstorm the characters of a manager after the CS Game. During the game and the debating process, the subordinates embody the company's culture successfully which increases the recognition of the organization. So the subordinates participated in the culture setting process which empowered the subordinates to take personal

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