Alibaba’s management in the global environment. Management Research

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Alibaba’s management in the global environment
Introduction
Business organizations use various management structures to organize, plan, control, and direct their resources in order to achieve their goals. However, due to globalization, the external environment has become increasingly dynamic, forcing companies to re-think about their organizational structure. On the other hand, managers have to deal with numerous dynamics such as political/legal problems, business models, and employee diversification. Using Alibaba Group Holding Limited, which is a multinational company, this paper aims at describing the dynamics that managers deal with, in the global environment.
Overview of Alibaba
Alibaba is a multinational firm that focuses on retail, e-commerce, technology, and the internet. The company was established in 1999 in Zhejiang, China, and provides business-to-consumer (B2C), business-to-business (B2B), and consumer-to-consumer (C2C) services through cloud computing, web portals, electronic payment services, and shopping search engines. Currently, the company is headed by Jack Ma as chairman of the board of directors, Zhang as CEO, Tsai Joseph as executive vice chairman, and Evans as president. In 2015, Alibaba became the world’s largest offline and online shopping store, which saw its profit surpass those of eBay, Amazon, and Walmat. After its first initial public offering in 2014, the company’s value was US$25 billion, however, in 2017, the market value rose to US$352.28 billion (Chen, 2018).
Alibaba’s organizational structure
Alibaba has an unorthodox organizational structure that is unprecedented with regards to its size. Since its establishment in 1999, the company maintained a simple partnership structure that involved Jack Ma and the other 17 founders. However, after going international in 2010, the company formed the “Alibaba Partnership” which is a committee of 30 members who are managers at Alibaba and other subsidiaries (Wadhwani, 2014). In the global environment, this management structure allows all the managers to easily collaborate by eliminating hierarchy and bureaucracy problems. In its 2015 filings, Alibaba noted that its organizational structure is intended to reveal the vision of all its founders while recognizing the fact that those founders will eventually step away from the company through retirement.
A major disadvantage with Alibaba partnership structure is that it gives ultimate power to the management committee rather than the actual shareholders. It is more of a “dictatorship structure” since outside investors do not have a say in how the company operates. Therefore, in scenarios where the company attains huge profits, shareholders cannot benefit in terms of stock appreciation and cash dividends. This is because the company’s IPO indicates that each manager has 10 votes versus 1 for each shareholder (Wadhwani, 2014). Therefore, outside investors will never get enough representation on the board of directors regardless of how share possession changes with time. This may force foreign investors such as Yahoo and Softbank to sell their shares in Alibaba since they are just passive invest...