Introduction
Alibaba is known as China’s biggest technology company specializing in online commerce and offering various products for its customers. Jack Ma, a former English teacher, established Alibaba Group along with other 17 people in 1999, with a strong belief in the power of technology and innovation (History and milestones, no date, para. 1). The company began in Jack Ma’s apartment in Hangzhou when its first website Alibaba.com was launched as a global wholesale marketplace to support small and medium-sized businesses in international sales.
Alibaba Group also started China’s marketplace for domestic wholesale trade in the same year, raising $5 million from investors (History and milestones, no date, para. 1). The company’s founders believed that the Internet would engage sellers in the domestic and global economies, helping them grow and compete effectively.
Ever since its launching, Alibaba Group has evolved into an e-commerce giant, making Jack Ma the richest man in China. His estimated net worth is $25 billion, while the company’s user reaches exceeded 1 billion globally as of 2020 (Srikanth, 2020, para. 3). Alibaba is currently a large digital ecosystem consisting of several businesses, such as “core commerce, cloud computing, digital media and entertainment, and innovation initiatives” (Company overview, no date, para. 2).
The success of Ma’s startup provides a basis for studying strategic leadership and the leader’s role in developing an efficient strategy. Alibaba has drastically transformed retail in China, and its contribution to the country’s economic restructuring explains the relevance of the leader chosen for this case study. This paper aims to discuss the theoretical perspectives of strategic leadership based on the example of Jack Ma and his contribution to the success of Alibaba.
Strategic Leadership
Theoretical Perspective
Strategic leadership refers to efficiently utilizing managerial practice to promote the company’s long-term success while sustaining its short-term financial stability. According to Thomas (2004, p. 125), strategic leadership involves “a whole business or organization, with overall accountability for the levels of leadership below” it. As the term suggests, the use of a strategy is incorporated into the decision-making of the company’s board. Furthermore, the strategy does not merely act as a means used by managers; instead, it is integrated with all processes within a company (Northouse, 2016). Creating a clear vision for an organization allows for aligning all its practices and concepts with the priorities and purposes defined by a strategy.
Research suggests that the approach of the company’s board directors and top managers has a significant impact on its efficiency. In particular, strategic thinking promotes the use of technology and innovation to benefit the organizational purposes and mobilize resources and innovation to achieve the set objectives (Hargreaves and Fink, 2006). Furthermore, a strategic approach allows for responding to change in a timely and effective manner and managing risks.
Strategic Leadership of Alibaba
Jack Ma’s leadership approach supports the idea of strategic leadership’s contribution to the company’s long-term success. He was not competent in technology; however, he saw the opportunity to use the Internet and innovation in the Chinese market and gathered a team of people who could help him accomplish his goals (Stone and D’Onfro, 2014). Doing a business online was innovative at the time, and a strategic approach and strong inspiration allowed Ma to initiate a company.
As a visionary and transformational leader, Ma shaped the history of Alibaba with his ample foresight that allowed him to overcome competition and anticipate the consequences of all the decisions made in a company. As Clark (2016, p. 11) claims, Ma’s vision and “philanthropic endeavors” resulted in Alibaba Group’s increased role not only in e-commerce but also in reforming education, health care, and environmental approaches. Risky but timely decisions, such as the establishment of Ant Group, a financial tech giant, showcase how the strategy process contributes to business success. Jack Ma is known to value the traits defined as critical for strategic leaders, such as effective communication, dedication, structural and innovation-driven approach, forward-thinking, and unity, which further highlights his influence on Alibaba Group.
Approaches to the Study of Leadership
The study of leadership implies three primary theories applied to the concept. In particular, as claimed by Aibieyi (2014, p. 55), they include the traits (psychological) approach, the situational (contingency) approach, and the behavioral approach. The traits theory suggests that leaders are born with specific qualities that define their distinguishment from others. In other words, certain traits affect people’s behaviors and form patterns.
The Hersey-Blanchard situational approach to the study of leadership considers the social system where the interaction between a leader and a subordinate occurs and claims that the effective leadership style will vary based on the situation (Aibieyi, 2014). Finally, the behavioral theory believes that the leader’s success depends on their behavior rather than natural characteristics. It argues with the traits approach by claiming that leaders are not born but made.
The situational approach is relevant to the organization chosen since Jack Ma utilized situational leadership throughout the company’s history. For instance, in 2003, as the SARS outbreak occurred in China, Ma made sure that employees operated from home not to endanger their safety (Clark, 2016). Due to the unknown and frightening experience of the disease, he decided not to risk his employees’ health and life above profitability. It is worth noting that such an approach allowed Alibaba to operate at ease while many other businesses suffered from the consequences. This example highlights Jack Ma’s ability to adapt to change and make efficient and ethical decisions in a fast-paced environment.
Role of the Leader in Developing Strategy
Based on the above, one can hardly overestimate the role of the leader in developing strategy. Leadership is responsible for creating the organization’s vision and mission, as well as the further implementation of core values to achieve the set objectives (Thomas, 2004). Jack Ma developed a clear vision for Alibaba Group’s future considering the emerging e-commerce trends. Moreover, he learned from the experience of his western rivals, Amazon and eBay, suggesting the inefficiency of Amazon’s model of self-purchasing and selling (Stone and D’Onfro, 2014). Thus, Ma’s observations contributed to the creation of his strategy.
Strategic thinking suggests that the leader not only determines the company’s core values and mission but also ensures that the company executes effective approaches to achieve its objectives. In this regard, Jack Ma created comfortable and safe conditions for Alibaba’s employees and incorporated technology and artificial intelligence to benefit the company. He believes in the need to hire the right fit for the job as well as in the power of diversity. Thus, as a transformational leader, Jack Ma defined the strategy of Alibaba and led the company to success.
Leadership and Corporate Social Responsibility and Sustainability
Leadership plays a crucial role in driving corporate social responsibility and sustainability. A connection can be observed between the strategy of organizational leaders and corporate social responsibility (CSR) practices, which in turn influence the company’s reputation and society’s wellbeing. Socially responsible and sustainable practices are incorporated into Alibaba’s business processes. In particular, the company participates in charitable projects, supports rural development in China, initiates poverty relief programs, and contributes to environmental sustainability (Sustainability, no date).
Furthermore, as mentioned above, the leadership style of Jack Ma has defined the current conditions where Alibaba Group’s employees work. Mobilizing people for the proper purpose is one of Ma’s critical principles. In particular, Alifest, an annual conference, is held to promote problem-solving and unveil his employees’ talents (Clark, 2016). A broad “technology-driven charitable ecosystem” was created by Ma to utilize technology for the good of the community (Sustainability, no date, para. 1). In doing so, the company creates job opportunities for thousands of people in various sectors, such as logistics, consulting, marketing, operations, training, and others. Therefore, the leadership principles of Jack Ma contribute to corporate social responsibility and sustainability.
To summarize, strategic leadership comprises a broad range of activities aiming to improve the company’s efficiency in the long run while maintaining short-term profitability. The success story of Jack Ma provides a foundation for studying theoretical perspectives of strategic leadership supported by real-life examples. His strategic leadership traits and the ability to anticipate change and adapt allowed him to grow a company from scratch successfully. It can be concluded that the organizational method is largely defined by the leader whose purposes and priorities shape the company’s operations and, in turn, its efficiency and profitability.
Reference List
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Clark, D. (2016) Alibaba: The house that Jack Ma built. Sydney: HarperCollins Publishers Australia.
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Northouse, P. G. (2016) Leadership: Theory and practice. 7th edn. Thousand Oaks, CA: SAGE.
Srikanth, A. N. (2020) Jack Ma: The inspirational story of Alibaba founder. Web.
Stone, M. and D’Onfro J. (2014). The inspiring life story of Alibaba founder Jack Ma, now the richest man in China. Web.
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Thomas, N. (ed.) (2004). The John Adair handbook of management and leadership. London: Thorogood.