Cultural Evaluation of the Alibaba Group

Introduction

In recent years, the Alibaba Group in China has attracted the attention of the world. The analysis target of part one is the Alibaba Group. First of all, it gives a brief overview of the Alibaba Group, including the company's revenue and profit, ethics, employee relationship policies, and product services. Next, it discusses Alibaba's organizational culture and social practice. The third part is used to discuss Alibaba's cultural impact on employees. Furthermore, it introduces any specific practices and plans Alibaba uses to promote socialization, productivity, team development, etc.  It discusses and comments on the organizational approach used to address any previous culture-related issues. Finally, it speaks to the diagnosis of current cultural problems and puts forward reference solutions.     

An Overview of the Organization

Alibaba Group, headed by Ma Yun, a former English teacher, was founded in 1999 in Hangzhou, China. As of June 30, 2019, Ali has 103,699 full-time employees. According to the financial report data released by Alibaba Group on May 15, 2019, Alibaba's revenue in the fourth quarter of the fiscal year 2019 was 93.498 billion yuan, up 51% year on year. The revenue in 2019 was 376.844 billion yuan, up 51% year on year. Alibaba said that in 2019, it brought 909.6 billion yuan of incremental business to merchants, 721 million mobile monthly active users and 104 million new users. Annual active consumers reached 654 million, up 102 million from the same period last year. In 2018, Alibaba paid 51.6 billion yuan of taxes, driving the tax payment to exceed 250 billion yuan. In 2018, the Alibaba platform created 40.82 million jobs (Alibaba, 2019.)

Alibaba Group is committed to following the highest standards of business conduct in its business relations with customers, business partners, shareholders, and other relevant parties. To keep these commitments, Alibaba complies with all relevant laws and regulations as well as the requirements of Alibaba group business code of conduct in its business activities. They require employees to show the value of integrity in their business dealings with external partners and never tolerate any unethical or illegal behavior.

Alibaba must establish a positive employee relationship. Good employee relationships can attract and retain excellent employees, improve employee productivity, increase employee loyalty to the enterprise, improve work morale, improve company performance, and reduce absenteeism rate.

Alibaba's founders established the company to support the interests of small businesses. They believe that the Internet can create a fair environment. Small enterprises can participate in domestic and international market competition more effectively through innovation and technology expansion. Alibaba Group's businesses include core business, cloud computing, digital media, and entertainment, as well as innovative businesses. Alibaba's products are known as "Ali zoo". These products include Tmall mall, Ant financial services, flying pig travel, Freshippo and so on. Each product uses a cute animal as its image.

Organization’s Culture and Socialization Practices

Values are an important part of organizational culture. Alibaba Group's values play an integral role in how the Group operates its business, recruits its talents, assesses employees and determines their remuneration. Customers first, employees second, shareholders third. This is Alibaba's choice. In other words, this is Alibaba's priority. Only by continuously creating value for customers can employees grow, and shareholders gain long-term benefits. Another point is valuing trust. The most precious thing in the world, as well as the most vulnerable, is trust. The history of Alibaba's growth is the history of both building and cherishing trust. All people are authentic and trust each other. At the point where there are not so many concerns and suspicions, the problem is simple, and things are efficient. Continuing on the important factors, valuing the only constant: changes are also essential. The world is changing, customers are changing, and the competitive environment is changing. Alibaba Group employees embrace change with awe and humility. An additional factor to value is the idea that the best performance today is the lowest requirement tomorrow. In Ali's most difficult time, it was this spirit that helped them survive. In adversity, they know how to motivate themselves. In good times, they dare to set transcendental goals. Facing the future, if they don't advance, they will retreat. Another example of the fundamentals of value would be to live seriously and work happily. Work is only a portion of your life; life is the entirety of it. Work as happily as one would enjoy life and live as seriously as one would work. Everyone has their work and life attitude. Alibaba Group respects everyone's choice. 

Additionally, there is another interesting phenomenon in Alibaba. Just like Ma Yun, Alibaba's employees will give themselves aliases. Most of them choose the characters in martial arts novels as their aliases, that is, their labels. For example, Zhang Yong, the current CEO of Alibaba, is nicknamed "xiaoyaozi". Zhang Jianfeng, the current CTO, is also known as "xingdian". These names usually refer to people with familiar images and characteristics. Alibaba employees use aliases at work and their names in life. Even the conference room in Alibaba building is named after the famous place in martial arts novels. This martial arts culture permeates the company's daily life and provides a fun and positive element for the company's culture.

 Organization’s Cultural Impact

“For an organization, values, systems, culture and other things that can connect each member can help a huge enterprise go further.” (Kreitner, R & Kinicki, A, 2013) Alibaba encourages employees to become dream makers, not people inspired by dreams. Alibaba encourages its employees to be future creators, rather than self-cycling machines. At the same time, Alibaba encourages its employees to become better learners. Alibaba employees are under great business pressure. In this case, the salesperson has to face countless rejections and misunderstandings every day. As soon as employees enter the company, most of the training courses will focus on how to become a qualified Alibaba employee. In team gatherings, the supervisor will also weaken Alibaba's power level by telling jokes, performing shows, and other ways to create a time and space for employees to relax. Every year's annual meeting is a carnival of sorts, solely for Alibaba employees. This is not only a celebration but also a concentrated display of Ali culture. Many of the employees involved reportedly feel proud of taking part in it annually. It is worth mentioning that Alibaba firmly believes that social responsibility is not only for society but also for the enterprise. Only when enterprises take solving social and ecological problems as their mission, can they coexist with society. Alibaba proposes corporate public welfare culture. They don't think today's public welfare is for the recipients. The real beneficiaries of public welfare must be the employees themselves, which is the biggest return to the enterprise and every employee. With this culture, knowing how to be grateful to society will warm the hearts of employees and make the team warm. Because they know how to be grateful, the employees will think more about changing positions.

Specific Practices and Programs

Alibaba has been building its talent echelon and succession system based on the partnership mechanism for ten years. According to Ma Yun's open letter last year, Alibaba now has a talented team and a succession system of "good generals". A new group of leaders represented by Zhang Yong has become the mainstay of Ali. In his open letter, Ma Yun once described Zhang Yong as an "outstanding business leader" in the talent echelon under the "partnership system" (Ma, 2018.) At the same time, Alibaba has a diverse, young management and talent echelon. Among Ali's partners, there are two "post-80s." Among the core managers above Ali senior director, "post-80s" accounted for 14%. Among Ali's management cadres and technical backbones, 80% of the "post-80s" generation has already taken up. The number of post-90s managers has exceeded 1400, accounting for 5% of the total number of managers. Women make up a third of the 36 partners.

In the past few years, Alibaba has also completed several power transfers and accumulated experience from them. The partnership system is known as Ali's internal driving force mechanism by Ma Yun. Its composition is neither the founding team nor the major shareholders, but some employees who highly identify with the company's culture and make important contributions to its business. This kind of organizational structure is not formed or introduced in a day. Alibaba adjusts its organizational structure at an average rate of 2-3 times a year, accompanied by the rotation of Alibaba executives.

Peter Drucker, a renowned management consultant, educator, as well as author, once told enterprises that they need to open the skylight of enterprises every 6-12 months to see the outside world (1955.) It sounds easy, but it's hard to practice, especially for the platform and giant companies. This structural adjustment has brought a lot of discomfort to the Ali people. But in the end, Ali employees had to adapt.

Organizational Methods

For Alibaba, the starting point of all rules and regulations is to "mobilize everyone's enthusiasm and creativity, so that employees' energy can be maximized." However, problems always arise. Is the emancipation of employee’s contrary to management? Management cannot be imagined as a kind of control, which is the thinking of the industrial civilization era. Because in the case of standardized processes, management efficiency is emphasized. But in the Internet age, technological innovation is emerging in an endless stream. At this time, it is necessary to maximize the autonomy of employees. “In the current industrial environment, human management should completely change its thinking, to form the collective wisdom of all employees” (Lu, 2017.) Alibaba has fully satisfied the employees' space and innovation impulse. Horse racing is a good example. As long as employees have good and innovative ideas, they can submit them to Alibaba's project committee. After approval, employees can continue to run with those ideas boldly. The group will be staffed, funded and even have options. Many good projects of Alibaba are established through "horse racing". In Alibaba's history, projects submitted by employees who have just recently been hired stand out, and then expand to a team of fifty or sixty people, breaking into the first echelon of the country in this field.   

Current Cultural Problems

Alibaba is currently facing the biggest controversy over its "996" working system. What is "996?" "996" refers to the working system of going to work at 9 a.m. and 9 p.m., working six days a week. "996" represents the overtime culture prevailing in Chinese Internet enterprises. The employees protested resulting in quite an important list of factors, worthy of note. To start with, 996 employees have no personal spare time in their life. They are all dominated by work and lose the meaning of life. Another factor is that if any job is not completed in time within the working hours and needs to work overtime, then there is a problem with workability or task allocation. Continuing with the next factor, the significance of work is to improve the quality of life. If work affects the quality of life, this kind of work cannot be done for a long time. A good company will train and improve its employees according to their abilities, instead of working overtime every day to create the greatest business benefits. In the short term, young people may not have much problem. Evidently, it's hard for anyone to stick with it for a long time. Companies should not force employees to 996. Enterprises should make employees feel like working for themselves rather than for the boss. They should make employees feel that they are doing great meaningful business. In this way, it can greatly improve employees' sense of achievement.  

Additional Issues

In the past, Alibaba employees have been used to face-to-face, zero distance communication with CEO Jack Ma. However, with the development of the company, although the company's executives are still striving for this kind of communication opportunity, it is not the same now after all. The first challenge faced by the company's communication system is the surge in the number of employees. Another big challenge comes from the diversity of employees' backgrounds. Employees from all over the world bring Alibaba a new atmosphere. How can these employees with different growth backgrounds and working styles be organically combined to finally identify with Alibaba's values? The key factor is communication. In order to alleviate the pressure of communication demand, Alibaba has created a series of all-round and three-dimensional communication networks to keep communication smooth, such as BBS, open mailbox, round table talks, lunch talks and so on.

Conclusion

To sum up, the Alibaba group is an enterprise that attaches great importance to the development of organizational culture. Its famous representative culture includes smiling face culture, martial arts culture and so on. Alibaba's management is also fully aware of the importance of organizational culture in employee management and enterprise stability. The strong organizational culture makes Alibaba group have extraordinary cohesion. This is also reflected in the efficiency of enterprises. Alibaba's organizational culture is not superficial. It is remembered by every Alibaba employee.     

PART 2

Change Implementation Analysis

Introduction

According to the analysis in the first part, Alibaba group is a large-scale company in China. Therefore, this part chooses Amazon as the acquirer. The second part discusses the organizational culture problems that may arise in the process of Amazon's acquisition of Alibaba. At the same time, the corresponding solutions are proposed for reference. This part mainly discusses from the perspective of the acquired, Alibaba. The purpose is to solve the problems that employees and managers may face in the process of enterprise change.

Current Culture of Each Company

Alibaba provides platform services, builds a bridge between users and merchants, and collects intermediary fees. It is a platform organization. Amazon's business model is to realize the sale of its products by combining its brand with its e-commerce and inventory. The commodity price difference is the source of e-commerce income.

It stands to reason that Alibaba adopts a flat organizational structure. Amazon, however, uses a hierarchical MBA style of management. Compared with other technology giants, Amazon's welfare for talents is not superior. It doesn't have Google's superior office environment or Microsoft's lavish incentives. On the contrary, frugality has become a motto. Amazon has even removed the built-in lights from all of its vending machines in its restaurants, saving tens of thousands of dollars a year. Even Amazon has set up an award to reward employees who save costs for the company. In terms of management mechanisms, although Amazon has 150000 employees, it has persistently adhered to the small team system. Only seven or fewer team members are working on a huge business project. For customers to make more and faster choices, Amazon needs an efficient and fast decision-making mechanism and a short and tough team to work quickly. Amazon calls it "two pizza theory" internally, which means that no team can eat more than two pizzas. To be faster, Amazon encourages innovation and adheres to high-stress levels. Provide more opportunities for people who want to do things and expect the creativity of employees to invent new things to meet the expectations of customers.

Corporate culture is of positive significance to standardize the behavior of employees in the enterprise. In many cases, the influence of corporate culture and values on employee behavior is more binding than rules and regulations. On a deeper level, corporate culture helps to form relatively consistent behaviors. It can reduce the difference between employees and reduce the friction between employees. It can be seen that a good corporate culture helps to enhance corporate cohesion. At the same time, it has a considerable attraction for external talents, which also reversely promotes the recognition of organizational culture by enterprise employees. As Amazon's founder, Bezos said, "people who love to compete upstream and innovate will choose to invest in a culture."

Case Diagnosis

Given the above, Amazon has a tradition of working in small teams. After the acquisition, it will inevitably face the problem of layoff. According to the data mentioned in the first part, Alibaba has a large staff team. For some technical posts, such as the construction of software platforms, key technology research, etc., some appropriate consolidation will be required. Naturally, there will be a series of new jobs brought about by the acquisition, such as human resources. Alibaba has been established for 20 years. And the company has always attached great importance to the development of corporate culture. Therefore, it is not easy to develop a new culture in such a company. There is no one best way to manage across cultures. Management theories and practices need to be adapted to the local culture. In the period of enterprise reform, the organizational capacity of an enterprise must be adjusted accordingly. Correspondingly, the behavior of employees is required to change more or less. At this time, some employees will show resistance to change to varying degrees. This is not uncommon in management. They worry about losing their power in the organization. Power in an organization is acquired by people through hard work. Employees who satisfy their current rights will not advocate change. Because they are not sure how much power they will gain in the new organization. They don't know how difficult it will be to regain power, and whether or not they can even do so. These anxieties will bring great insecurity to employees. 

Amazon is an American company, while Alibaba is a Chinese company. It is relatively easy for multinational companies to form their cultural values in the home country environment. Because national culture, business culture, corporate culture and individual culture of employees are all compatible or consistent. However, to establish a new culture in a different cultural environment, no matter what kind of model is adopted, it will face the re-adaptation or change in value concept, thinking mode, behavior mode, communication mode, etc. Cultural conflicts will lead to mistrust and uncertainty about the future of cooperation between the two sides. This will lead to a great increase in employees' attention to personal affairs, thus reducing work efficiency and even working in competitive enterprises. Furthermore, cultural conflicts will directly lead to a lack of recognition and professionalism of employees. This makes the enterprises after the implementation of overseas acquisition must be in a state of multi-cultural coexistence, which increases the difficulty of cultural integration. Especially, in this case, Amazon has a Western cultural background while Alibaba has a strong Eastern cultural background, it is believed to be difficult to integrate well. Fortunately, Alibaba and Amazon are both companies with more experience in globalization. Whether in e-commerce or other businesses, both companies have a certain foundation in globalization. This kind of background is helpful to solve the globalization problem after the acquisition. Discuss in 3-4 sentences about diversity issues, stress, dissatisfaction, motivation issues, socialization issues/problems, decreased performance, increased turnover and absenteeism, increased counterproductive work behaviors, application of textbook terminology/information/jargon, etc.

Proposed Solutions

Managing organizational culture is one of the most important functions of leadership. The process of culture change begins by targeting one of the three layers of organizational culture. It is important to consider the extent to which the current culture is aligned with the organization’s vision and strategic plans before attempting to change any aspect of organizational culture. It is important to use a structured approach when implementing culture change. Resistance to the power of organizational change is inevitable. However, if properly managed, resistance to change can always be eliminated to ensure the success of the change. Alibaba should let its employees fully understand the purpose and significance of the change. Some enterprise managers are always willing to think that change is the business of managers. As long as the management is clear about the purpose and significance of the change, it is enough to assign tasks to subordinates to complete. If employees do not know the purpose and significance of the change, they will soon lose their enthusiasm to participate in the change. In the process of enterprise reform, the implementer should give full play to the role of enterprise culture. In the process of change, if the management pays attention to the reconstruction of corporate culture, the resistance to change will be much less. However, resistance is not useless. Resisting change can lead managers to find the best balance between change and stability. Alibaba can try to create an atmosphere of impending reform. Through various means to tell employees that reform is imminent so that they have a full psychological preparation. At the same time, Alibaba needs to explain why it needs change. Enterprises should let employees know the importance of reform, what kind of impact it will have on individuals and organizations, tell them the benefits it can bring to them, and what ways it can take to make up for its losses. Regardless of when management should actively ask employees to participate in the reform. As a result, employees will have a sense of ownership and control over the change, and they will be more active in the change. Enterprises should attach great importance to training and communication. Through training and communication, let relevant personnel fully understand the purpose, content, implementation mode and possible results of the reform, eliminate unnecessary misunderstandings as much as possible, and reduce employees' resistance to the change.

New Culture Creation

“Four functions of organizational culture are organizational identity, collective commitment, social system stability, and sense-making device” (Kreitner. R & Kinicki. A, 2013.) The establishment of a new culture includes four levels: material culture integration, behavior culture integration, system culture integration, and spiritual culture integration. The first is to integrate material culture. The content involves the trademark of the enterprise, the products (including packaging) and services produced, the construction of the working environment, and clothing. The integration of this level is based on material form. It is the external expression of core values and is easy to implement. Next is the integration of behavior culture. The integration of behavior culture is the absorption of the unique cultural phenomenon in the production and operation activities, interpersonal relationship coordination activities, corporate social activities and so on. Then it comes to integrate institutional culture. It includes three aspects of the decision-making system, organization, and management system of the enterprise after merger and acquisition, which are specifically embodied in the production process, operation mechanism, management process, and the responsibilities/rights/ obligations of personnel, etc. The purpose is to form a unified enterprise system, to restrict the behavior of enterprises and employees, and to achieve enterprise goals. Finally, the integration of spiritual culture. The spiritual culture of an enterprise includes the spirit of the enterprise, the purpose of operation, the values, the ideas, the ethical standards and so on. Through the integration of these aspects, a unique enterprise value system will be formed, and the norms of enterprise production and operation activities will make the enterprise management and employees form a consistent ideology. Managers should be good at finding common ground between the two companies and strive to seek common ground while reserving differences to the greatest extent. For example, Alibaba Group's representative color is orange. Orange symbolizes vitality. Every Alibaba employee is very kind to orange. Fortunately, there is also an orange element in Amazon's logo. Then the color symbol can be preserved. There are customer-oriented values that Alibaba and Amazon have in common. Alibaba's logo is a smiling face designed with the small letter an as the prototype. Coincidentally, Amazon also starts with A. The new logo cannot be changed too much. It only needs to add some Amazon elements, such as fonts, to have a good effect. It is effective to create a new culture based on retaining the existing culture.

Conclusion

Amazon's acquisition of Alibaba is a cross-border acquisition. There are still many risks in this kind of company acquisition cases. There are decision-making risks for the leadership before the acquisition. There are also operational risks in the re-implementation process. After the successful acquisition, we must do a good job of integration. Therefore, when a company wants to make an acquisition, it must be fully prepared to face these risks. For Alibaba Group, to do a good job of organizational culture before and after the enterprise reform is conducive to the long-term development of the enterprise. The managers of Alibaba Group shall make a plan in advance and fully consider all aspects of the change. Only in this way can they achieve a win-win situation.

Work Cited Part One

• Alibaba.(2019) Alibaba Group's upgraded values: an in-depth analysis of the struggle history of "new six pulse sword". https://www.alibabanews.com /阿里巴巴集團升級價值觀_深入剖析「新六脈神劍」/
• Alibaba.(2019) Culture and Value. https://www.alibabagroup.com/en/about/culture
• Alibaba.(2019) Performance Report.  https://www.alibabagroup.com/en/ir/earnings
• Drucker,P. (1955) The Practice of Management. Heinemann, London. pp. 114-116.
• Kreitner, R. & Kinicki, A. (2013). Organizational Behavior 10th edition. McGraw-Hill Irwin, United States of America. pp. 63-84.
• Lu,Y. (2017, February 22) Alibaba Corporate Culture Management. China Business Daily (Beijing) . p. 4.
• Ma, J. (2018). Alibaba will fulfill its mission. http://www.ebrun.com/20181030/304169.shtml
• Ma, J. (2019). Innovation dominates the global economy.https://www.alibabanews.com /創新主導環球經濟-馬雲：應擔心企業巨頭不創新/

Work Cited Part Two

• Kreitner, R. & Kinicki, A. (2013). Organizational Behavior 10th edition. McGraw-Hill Irwin, United States of America. p. 73& 94& 175.