The Leadership Strategies of Jack Ma and the Success of Alibaba

Introduction

The modern business management requires leadership skills as a clear-cut necessity for the sustainable growth of any business. The strategies of a leader are not only referenced to certain economic setting but across the general economic dynamics. Successful and profitable companies must have a competent leadership that can drive it towards its desired vision. This paper seeks to assess the significance of leadership in company success and growth with reference to the founder and the chair of Alibaba, Jack Ma.

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Leadership is the act of giving guidance or directing a group or organization. It is also the ability of a person to influence or guide a group or members of an organization. Leadership entails sound decision-making in difficult situations and creating and enunciating a clear vision with achievable goals that enable the followers to achieve such goals. Leaders exist in various aspects of the society, ranging from politics to business to community-based organizations. Some of the effective leadership characteristics are self-confidence, creativity, strong communication skills, innovative skills, management skills, willingness to take risks, reactiveness in moments of crisis, and openness to change. A leader can influence the attitudes, behaviors, and thoughts of others by setting path and direction that help the followers in visualizing what needs to be achieved ahead of them. Leaders can harness the various abilities of people jointly to achieve something significant. People who can influence the behaviors of others in a substantial way can easily rise to leadership positions like CIO and CEO.

Leadership should influence people towards success or towards achieving certain goals in life, either individually or as a group. According to the Oxford Dictionary, Success refers to time-bound accomplishments of the set objectives. It means achieving certain objectives either individually or as a group in the specified period of time. Success in business aspect refers to the ability of a company to provide value to the owners, customers, shareholders, employees, society, and all its stakeholders. The measure of this value might vary from one business to the other, but it should be ethical, legal, and sustainable, independent of the owner's effort.

One great business entrepreneur and successful leader in business is the self-made billionaire, founder, and chair of Alibaba, Jack Ma. He is currently a 53 years old man who turned into a business guru. He was formerly a Chinese English teacher before he began the tech world investments. The unique story of Ma started in 1995 when he visited the U.S for the first time, and started a translation company that aimed at capitalizing on the increasing boom of the Chinese product exports. It was during this period that he learned about the internet and so an opportunity to introduce a representation of China on an online platform. He began China-page to facilitate SMEs in China, but the business lagged and he decided to establish Alibaba. This potential business opportunity facilitated small and medium business enterprises in China and allowed business engagement with the rest of the world. Ma got rejected on several occasions and even failed, but he never gave up. He tried out all the means until he finally achieved what he desired of China businesses. His career success began in 1999 when he was in his 30s, and today, Ma's real-time net worth is about $42 billion while Alibaba is valued at about $519 billion (Forbes, 2018, p.1).

Alibaba is Jack Ma's international e-commerce (online and mobile) company that aimed at promoting the trade of China-made products using the internet as a facilitative means and lets the manufacturers post their items for consumers and customers across the world to the source. It offers mobile and online marketplaces in wholesale and retail trade, and cloud computing services among others. The Headquarter of Alibaba is in Hangzhou, China, and it has about 36,500 employees. As the year 1999 ended, Alibaba had successfully raised $5 billion from the Goldman Sachs and $20 billion from the Japanese telecommunication giant, Softbank according to Forbes Report (2016, p.5). In the year ending in March 2017, Alibaba's revenue increased by 56% to $23 billion. Also, the Alibaba's 2014 IPO in New York recorded the world's biggest public stock offering of $25 billion (George, 2014, p.4).

The content of this essay is about the real world of management as well as the theories and facts involved. It illustrates the leadership strategies of Jack Ma and uses interviews and questionnaires to assess the management level of Alibaba. The paper links the success of Alibaba with the leadership methods and seeks to perform the company's quantitative analyses by the assessing the market share, increase in sales volume, return on equity (ROE), Net Present Value (NPV), and price to earnings (P/E) ratio.

The Theories of Management and Leadership

The main reason for the success of Alibaba is due to the execution of good management skills. Management style is a key factor for a company's failure or success. The thinkers like Fayol, Sisk, and Taylor define management as the process of planning, organizing, leading, controlling and staffing in the organization with the aim of achieving the set objectives. Leadership, on the other hand, is the process of influencing followers towards attaining a common goal. Both the management and the leadership endeavor to accomplish the organization's goals and vision and motivate members as well as organize the resources.

Management styles can be defined by various theories; theory X, Y, and Z. Theory X managers believe that people dislike work and must be coerced to work. It also assumes that workers prefer safety and physiological needs as in the Maslow's theory/Hierarchy of needs. Theory Y managers that people love work and can find solutions to problems as long as the work enabled them to achieve the company's goals and their individual goals. Lastly, theory Z managers believe that workers/employees are participative and can perform varied duties as long as they are continuously trained. The company must support the workers' wellbeing for an assurance that the workers work to their utmost abilities. In this case, the workers have a sense of order, discipline, and cohesion with the colleagues.

Apart from the management theories, there are the leadership theories that variety of leaders possess. The Great Man Theories depict leaders as exception people, raised up with innate leadership qualities. Trait Theories of leadership suggest that a leader has positive traits that are usually progressive, and they strive to deliver in life. Behaviorist theories are those that define leaders by what they do rather than their traits, and only the observed behaviors identify their styles of leadership. Situational leadership theory sees a leader particularly due to the situations they handle. Contingency theory refines the situational theory and identifies varieties of effective leadership styles that suit a circumstance. Another theory is transactional, that focuses on mutual benefits between a leader and a follower. This aspect is whereby a leader rewards a follower who afterward returns loyalty and commitment. Transformational leadership theory is whereby a leader envisions the future and establishes organizational approaches and performances for change. Lastly, there is inspirational leadership theory, which is dependent on a leader's charisma to boost the leadership influence.

The Management styles of Alibaba are usually dynamic and change depending on the suitable situation and the sustainability approaches. The success of Alibaba is pegged on its successful leadership and management styles since its launch in 1999. At first, the founder, Jack Ma tested various techniques before settling on the one that worked best for him. The management was autocratic with a single leader, Ma. He is known for his autocratic management tactics and flexibility as a leader in leadership. The leadership style during this time reflected Ma's individual opinion and personality, which in turn projected the image of a well-managed company, Alibaba. He had to be the sole executive and a decision maker in all the business matters related to the website www.alibaba.com.

As Alibaba grew, the management style changed to be conductive, with co-managers. The management began to share responsibilities but still with the downward nature of company communication. The workers were allowed to send forth feedback and the management emphasized the morale and social needs of the employees. Ma made changes to the Alibaba management to best suit the workers as he introduced the Asian Paternalistic style of management as he still worked with close friends and some family members. In this style, he had to understand and implement what was best for the staff, managers, and consumers, able to promote organizational growth and harmony.

A management style of Ma until 2008 was persuasive. He used manipulative tactics to give prominent positions to the investors and outsourced those who were familiar with the markets outside China. This style was best as the company had expanded to foreign nations. The style engages employees and customers a lot to understand them better and make beneficial decisions. By 2012, Alibaba allowed a democratic management style, enabling decision-making from clients. In this case, there is increased job satisfaction, participation, contributions, and high work quality. In this case, however, the decision-making process could severely slow down. However, Ma bends this aspect with every style to improve the business performance of Alibaba. At the start of 2013, Ma introduced another management style known as the Walking Around management style. In this case, the managers usually gather a lot of information regarding the challenging situations, listen to employees concerns, and enable the company to evade the likely threats. Jack Ma will often second guess the workers' decisions and maintain his role as a counselor or a coach, to guide the various decisions.

The Structure of Alibaba

The company has an unorthodox manner to governing itself. It has various partners since its foundation. In 1999, the meetings were among the founders at Ma's apartment. In 2010 until to date, there are about 30 members of the steering committee after the establishment of Alibaba partnership. This organization/structure enables the company to have a long-term focus and collaboration that overrides hierarchy and bureaucratic leadership. This culture is the solution for maintaining the original company culture set by the founders, some of which have retired.

The Culture of Alibaba

The main culture of Alibaba is to offer a platform or create jobs for the entrepreneurs. Alibaba believes that the customers must win before they gather profits. It is only after the users make money would the Alibaba make money. The major ambition of Ma was to help others to chase their goals, and not to please the company. Ma believes in hiring the smart people, able to work well as a team. The management believes in work and performance but not the smart resumes. The theory that the Alibaba management uses is where the management hires people who are goal-oriented and less on themselves. The core value of Alibaba is to embrace change. Mah believes that it is better to do something and fail rather than do nothing.

Leadership and Motivation

There are several theories that allow a clear understanding of leadership and motivation. Motivation is the level of inspiration one find to achieve a set goal. Humans have needs and rewarding them will motivate them to work. According to Maslow's theory, worke...