Hosoo

2016/12/21

Alibaba Group Social Responsibilities

Alibaba is an e-commerce company from China that has garnered international

attention in recent times. The group was the largest online platform provider in China.

Alibaba as a corporate entity, was first engaged in corporate social responsibility in 2008,

when a terrible earthquake took place in Wenchuan, Sichuan Province. Alibaba provides

acces to do business anywhere around the world. Alibaba’s SD and CSR are growing in

importance with the main drivers of the change being, greater focus by shareholders on

issues, recent corporate scandals, greater pressure from governments or regulators, greater

focus by media on issues, evidence that it offers a competitive advantage, globalisation and

offshoring, increasing customer power allied to consumers’ concerns in this area, and more

effective action by non-governmental organisations and activists.The objective of these

regulations is to achieve triple bottom line based growth.

According to the Alibaba Group itself, the company was founded in 1999 by 18 people

led by Jack Ma, a former English teacher from Hangzhou, China. From the outset, the

company's founders shared a belief that the Internet would level the playing field by enabling

small enterprises to leverage innovation and technology to grow and compete more

effectively in the domestic and global economies. So, the primary purpose of the company

was to leverage the Internet as a medium for economic exchange in a way that had not yet

been achieved within the nation of China. In the West, this concept would likely be familiar

to most people through companies such as eBay and Amazon. In China, though, the endeavor

undertaken by Alibaba was unique at its time, and the founders of the company were self-

consciously attempting to fulfill what they perceived to be a relatively vacant economic

niche. The history of Alibaba, one gets the picture of a highly competent business whose 15

years of existence has been characterized by expansions in capital and strategic acquisitions
and partnerships. For example, in 2005, Alibaba entered into a partnership with Yahoo,

which included Alibaba taking over Yahoo's operations in China. The company has also

launched educational programs on e-commerce for both marketers and buyers. Essentially,

Alibaba has displayed a high level of awareness regarding the fact that in order to succeed

within China, it will have to ensure that the right kinds of infrastructure are in place for large

numbers of people to meaningfully begin engaging with the Internet as a medium of

commerce.

With climate change and technological advancements, companies were expected not

only to focus on profits, but to shoulder the responsibility for making a positive impact on the

wider society and environment. More and more companies around the world considered

social responsibility an absolute mandate. According to the Committee Encouraging

Corporate Philanthropy, most companies with strong business performance increased their

corporate contributions in 2014, most often in the form of non-cash gifts. CEOs considered

employees as the most influential stakeholder group, and encouraged employee volunteering

efforts.

Looking into the future, companies should be more creative and innovative to identify

and tackle the root causes of social and environmental problems. They should develop

innovative business models based on their core competences and values, and integrate CSR

activities into their daily operations and branding. Their compliance with CSR codes,

standards, and guidelines would be a must but not enough, because this checklist approach

could not cope with complex, intractable social and environmental problems. CSR projects

would follow the global trend and be sensitive to both local contexts and priorities.

Government policies and initiatives would lead to guilt-free shopping, forcing companies to

offer ethical product lines. Cross-sector CSR partnerships would be increasingly common,

and big data and efficient communication technologies would enable companies to solve
social and environmental problems at scale. In 2005, two charities opened online shops on

Taobao and became the first such charities to use the internet platform for fundraising,

promoting their projects and improving awareness of public welfare. In 2008, the Wenchuan

earthquake raised awareness of public welfare among many Chinese companies, including

internet firms. Since then, online philanthropy has grown very quickly. It not only attracted

more people to participate in charitable projects, but opened up new fundraising channels

such as crowdfunding.

One of the most important events in the recent history of Alibaba has been the

company's decision to make an initial public offering on the New York Stock Exchange. This

occurred on September 19th; and the act met with what could only be called magnificent

success. The stock began at $68.00 and ended at $93.89, causing Alibaba to set new records

within its category in the stock exchange; and as Jacobs and Gough have pointed out, the

reception suggested that Alibaba has convinced investors, in 100 meetings over two weeks,

tat it could give them exposure to the growth of Chinese consumption and internet use, while

assuaging their concerns about governance, corruption and state interference. The

performance of Alibaba led it to outrank several American giants, including Amazon and

Facebook. Clearly, this bodes well for Alibaba's future as a publicly traded company. It is

worth reflecting more closely on the implications of Alibaba's initial public offering for its

investors. As Jacobs and Gough have written: "Alibaba has followed the model of Microsoft,

Google and other American technology companies, generously handing out stock to all levels

of workers, from senior executives to receptionists. It has created a wealth diaspora rarely

seen in China" (paragraph 3). As the company grows, this "diaspora" can only be expected to

expand. More than promising prosperity for Alibaba as a whole, then, becoming a publicly

traded company will likely continue to expand the wealth of all shareholders of the company,

predominant among whom are the employees of the company itself. This is impressive in its
own right, within any context whatsoever, but it is especially impressive even revolutionary

within the Chinese context. At this point in the discussion, then, it may be appropriate for the

present essay to turn to a consideration of the special consideration of the significance of

Alibaba within the specifically Chinese context.

This case study investigates Alibaba’s strategic intention on sustainable

development and social responsibility. Current business performance has proven to succeed

in turbulent times, mainly due to management’s ability to instil cultural values that represent

stakeholder’s values. Overreliance on unstable economies and developing market trends does

show variance and volatility which requires consistent monitoring from management if it

intendeds on sustaining long-term profitability. Additionally, Alibaba’s orientation towards

helping SMEs has greatly contributed to increasing societal welfare and CSR community

image. As human capital is at centre of societies issues and linked to innovation, management

is looked upon to continue to inspire and incentivise employee contributions. Overcoming

management’s internal costs to provide external benefits will be a great achievement for

future gain. Sustainable communication for external and internal stakeholders that provides

industry knowledge surrounding financial stability and performance. Long-term growth rates

are suspected to grow from ALIBABA’s independency from advertising revenue and patent

application fillings which provide a progressive competitive advantage for long-term

financial performance. However, the manufacturing sector which dominates most of

Alibaba’s stakeholders is at a stage of industry maturity, which requires Alibaba to seek out

and retain the dominant India and China customer base. Competition for the growing middle-

class is fierce. Requiring them to compete with not only well established international e-

commerce organisations but help inspire competition on a local scale. With the termed coin

Chindia Alibaba expects to have such a joint cooperation rather than compete, it is expected

to provide double financial sustainability. Equally, the doubling social and environmental
responsibility presents ever changing challenges that Alibaba can use previous lessons to

adapt and overcome this instability. Where Alibaba will continue to manage cross-culturally.

Operating within a borderless ecosystem of mutually-advantageous exchange Alibaba has set

an example for SD and CSR for other organisations and community at large.

- Resources:

http://www.alibabagroup.com/en/about/history

http://www.forbes.com/sites/ceibs/2014/11/10/mobile-and-rural-dual-engines-for-alibabas-

future/

http://www.ibe.org.uk/userfiles/chinaop.pdf

https://www.nytimes.com/2014/11/12/technology/on-singles-day-in-china-a-push-to-

improve-online-shoppings-slow-delivery.html?_r=1