Leadership has a pivotal role in enhancing the company’s performance and leading it to success. Alibaba Group, China’s most prominent e-commerce giant, presents an example of an influential corporation with a strong corporate culture created by its co-founder Jack Ma. According to Clark (2016, p. 4), the company’s IPO raised $25 billion on the New York Stock Exchange in 2014, making it “the largest stock market flotation in the history.” Furthermore, Zeng (2018, para. 8) refers to Alibaba Group as a “smart business,” highlighting its use of machine-learning technology to gain a competitive advantage and adapt to changing market environments.
Hence, the extraordinary story of Alibaba and its influence on the Chinese economy constitute the basis for exploring the impact of a business leader on the company’s performance. In this regard, it is essential to analyze the leader’s role in driving organizational performance, explore leadership power and influence along with management development for competitive advantage, and discuss the organization’s strategic effectiveness from a leadership perspective. This paper aims to evaluate the impact of Jack Ma as a strategic leader on Alibaba’s performance.
Role of the Business Leader in Driving Organizational Performance
Organizational performance refers to measuring the firm’s actual output and results against its objectives. As can be seen, strategic planning and leadership are closely related to this concept since they help align all processes, resources, and systems within a company with its strategic goals (Hargreaves and Fink, 2006). Leaders shape the effectiveness and execution of organizational strategies by defining the company’s values, culture, and ethics (Northouse, 2016). In turn, these factors impact employee motivation and organizational performance, including such aspects as financial performance, social responsibility, product market performance, customer service, and shareholder return.
The business leader stands at the forefront of the formation of organizational culture. For Alibaba Group, it is based on the vision, mission, and values shared by all employees and the company’s subsidiaries. Alibaba aims to help businesses transform through technology, with its mission being “to make it easy to do business anywhere” (Company overview, no date, para. 1). Furthermore, the organization’s vision is “to be a good company that will last for 102 years,” which is a symbolic milestone meaning that Alibaba’s existence will have covered three centuries (Company overview, no date, para. 4).
The values lying at the center of all the processes within Alibaba Group include customer value, trust, change as the only constant, innovation, and striving for enhanced performance (Culture and Values, no date). Many of the characteristics found in Jack Ma are reflected in the company’s organizational culture, such as dedication, innovation-driven approach, forward-thinking, and teamwork, highlighting the importance of the business leader in driving organizational performance.
A creative and innovative culture implemented by Jack Ma has established a healthy working environment for staff, allowing them to grow as professionals while contributing to the corporation’s performance. For instance, Aliway, an internal communication platform, was created where all employees can express their concerns and criticize work-related issues in a respectful and solution-oriented manner (Shao, 2014).
Besides, a system of incentives and appraisals from the leaders are used to show appreciation and gratitude to Alibaba’s employees (Clark, 2016). Social interaction, company gatherings, and retreats also take roots in the business leader’s approach to management. Ma’s leadership style contributes to driving organizational performance and executing the vision of Alibaba Group by providing sustained customer value and building an extensive ecosystem for businesses to operate effectively.
The Exercise of Leadership Power and Influence
Leadership power refers to the ability to adjust the behavior of employees and make them accomplish tasks through the use of various tactics. Influence is a similar concept, but it focuses on explaining why the tasks set are necessary to complete. According to Northouse (2016, p. 10), six “bases of power” can be defined, including referent, expert, legitimate (positional), reward, coercive, and informational power. Furthermore, these types of power can be divided into two major groups: position power derived from the specific rank or office held by the leader, and personal power, which occurs when an individual becomes a role model for others and is viewed as likable by followers. Furthermore, leadership theories describe business leaders depending on their traits.
Northouse (2016, p. 440) highlights the following trait-based leadership behaviors: “charismatic/value based, team oriented, participative, humane oriented, autonomous, and self-protective.” Moreover, leaders can be classified as transactional, transformational, and situational. Leadership power and influence are exercised through the use of behavioral, rational, and structural tactics (Northouse, 2016). Regardless of the technique chosen, leadership should encourage the team to complete the work.
It is common for leaders to combine approaches to influence employees based on the objectives. Jack Ma is known for his unique management style, adaptability to changes, and reliance on teamwork, which could not but influence his execution of power. As Ee and Yazdanifard (2015, p. 53) claim, Ma incorporated “a mix of democracy and power” in Alibaba to achieve impressive results. He began as an autocratic leader when Alibaba was launched by experimented with tactics to use the right approach at the appropriate time.
Ma primarily executed a persuasive management style throughout his career. Even though such an approach implies a similarity to autocratic leadership, the primary difference lies in being more aware of the employees. A persuasive leader focuses on explaining the decisions’ benefits to subordinates (Ee and Yazdanifard, 2015). As can be seen, Alibaba appreciates motivation and teamwork, which are important characteristics reflected in its value statement.
Jack Ma is a charismatic leader since he aims to create a friendly and supportive environment for his employees. In particular, Alibaba is known for not firing personnel for unintentional mistakes (Clark, 2016). Instead, efforts are put to improve the staff’s expertise and help them avoid future errors, thus, enhancing the company’s performance and contributing to its social responsibility. Moreover, Ma is a transformational leader since he acknowledges the need for change, depicted in the company’s values statement as the only constant. He has a strong vision, communicates it clearly, and builds trust and positive self-regard in tandem with the team. Overall, Jack Ma effectively exercises power and influence to achieve the organization’s objectives.
Leadership Development for Competitive Advantage
Leadership development is essential for any business since it allows for competing in a fast-paced and harsh environment. The main feature of leadership development is increasing the capabilities and expertise of leadership within a company, which has the potential to become its competitive advantage. A business leader needs certain skills and knowledge to succeed in a rapidly changing economy, such as ample foresight and the ability to adapt to change (Thomas, 2004). Moreover, strategic planning plays a pivotal role in establishing a vision and direction for the company to grow and overcome competition. A sharp focus is needed for aligning leadership development with the core values and objectives.
The primary requirements of leadership development for competitive advantage include defining the crucial skills and abilities needed in leaders to execute the company’s vision in an efficient and timely manner. For instance, Alibaba Group offers initiatives and programs that promote leadership development and enhance the competence of its employees, such as Alibaba Global Leadership Academy (Alibaba Global Leadership Academy, no date). Furthermore, Jack Ma acts as a role model and promotes such skills as adaptability, creativity, collaboration, change management, innovation, and effective decision making.
Criteria for Measuring an Organization’s Strategic Effectiveness from a Leadership Perspective
Strategic management highlights measuring and assessing organizational performance as an essential aspect of any business. A leadership perspective is needed to identify the key criteria for such an evaluation. In this regard, such measures can be based on Elkington’s Triple Bottom Line model of “People, Planet and Profit” (Kraaijenbrink, 2019, para. 1). This approach allows for evaluating the financial, social, and environmental strategic effectiveness of the company, thus, promoting its corporate social responsibility. More specific criteria can be set based on the company’s objectives, vision, and mission.
To summarize, strategic leadership is critical to organizational performance as it shapes the firm’s vision, mission, values, and overall culture. A business leader is responsible for executing power and influence in an efficient way that promotes customer value and creates a positive working environment for employees. In this regard, Jack Ma has significantly influenced Alibaba’s performance as a strategic leader. His focus on clients’ and employees’ needs, innovation, teamwork, and change has contributed to the development of an extensive ecosystem built on the values shared among all shareholders.
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