EXAMINATION

Code: 01 (Official Individual Big Assignment for Students)

Lecturer’s Signature & full name

Program: VNU
Course Code: INS30900
Course Title: Integrated Marketing and Branding
Communication
Date: ………………………………
Level: UG
Department’s Signature & full
Time allowed: 7 days name
Date: ……………………………………………………..
Time: …………………………………………………….

Date: ………………………………

Instructions to students:

1. Take-home/Opened book examination:

2. Students are NOT permitted to retain this examination paper

This exam paper contains pages, including the cover page.

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 Leadership Succession at Alibaba, China

©2020 Richard M. Steers. This case was developed and written with Subramaniam
Ananthram, published by Cambridge University Press, all rights reserved.
It is based on Michael Zakkour, “How Jack Ma’s crazy management style built a
technology empire,” Entrepreneur, September 30 2014; Charlie Rose, Interview with
Jack Ma. World Economic Forum, Davos, January 23, 2015; Mac Ryan, “The crocodile
and the shark: could Alibaba swallow eBay?” Forbes, September 30, 2014; Karen
Gilchrist, Jack Ma's succession plan offers an important lesson in leadership, CNBC,
September 10, 2018; and Katia Moskvitch, “Everything you need to know about Daniel
Zhang, Alibaba’s new king,” Wired, September 13, 2018.

Key concepts: executive succession, GLOBE leadership model, leadership, Pyramid

leadership model

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Alibaba is a Chinese multinational conglomerate specializing in e-commerce, retail,

Internet and technology. Founded in 1999, the company provides sales services via web
portals, as well as electronic payment services, shopping search engines and cloud
computing services. It owns and operates a diverse array of businesses around the world
in numerous sectors, and was named as one of the world's most admired companies by
Fortune. Alibaba was founded and led by Jack Ma, who became famous in the industry
for his eccentric, yet highly effective, leadership style.
When Ma retired in 2018, questions were logically raised about his successor, Daniel
Zhang. Could Zhang retain the company’s leadership position in the industry and, if so,
how?
Jack Ma, entrepreneur

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Jack Ma (Ma Yun) was born in Hangzhou to traditional musician-storyteller parents in
1964. From a young age, he had a penchant for studying English and after college taught
the language for several years. But soon, he and his friends became fascinated with the
Internet as it emerged across China. They started a website development company called
China Pages. As he and the industry developed, Ma used his knowledge of both IT and
English and launch Alibaba from his apartment with several of his friends in 1999. His
charismatic and visionary style quickly attracted millions of dollars in international
venture capitals, and he used this support to improve China’s domestic e-commerce
market and develop an e-commerce platform for small and medium-sized Chinese
enterprises.
Building on this initial success, Ma launched Taobao Marketplace, Aliplay, AliMama,
and Lynx. In 2013, Alibaba sought an initial public offering (IPO) in the US after Hong
Kong regulators blocked his efforts. Alibaba’s US launch was the largest in history,
raising US$25 billion. Taobao now features a billion products and is one of the 20 most
visited websites globally.
The company accounted for over 60 percent of parcels delivered in China by 2013 and 80
percent of online sales by 2014. Alipay accounts for 50 percent of all online payment
transactions within China. Today, Alibaba has a market value of US$231 billion.
So, how did this dramatic success occur? Observers give much of the credit, not so much
to his technical or sales ability which he acknowledges are limited, but to his unorthodox
leadership style and management philosophy. One Western associate observed that he did
it by blending the best of Western and Eastern technologies, operational practices, and
management styles. As Ma observed, “Successful entrepreneurs do not let setbacks get
them down and try and see both what is possible and what is impossible, but the
differences is that they focus only on the possible.”
Ma also understood that one need not reinvent the wheel. He realized that the best way to
compete with eBay was to add his own local knowledge to his Taobao platform. The
Chinese value relationships highly, and trust is of paramount importance. Fully aware of
Chinese culture and philosophy, Ma felt that the Taobao interface needed a personal
touch, which would allow the establishment of trust between buyers and sellers who did

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not know each other. So, he added a real-time chat function between buyers and sellers,
which allowed for transactions to become personal. He used the same approach in the
rollout of Alipay.

Jack Ma’s readiness to make fun of himself and speak his mind contrasts with the typical
strict conservative Chinese style leadership. He is energetic, approachable, and
outspoken, and has built a culture of loyalty, participation, and fun. He is often seen
singing karaoke with employees, addresses employees in outlandish suits and colorful
outfits, and holds weekend fun retreats for 15,000 employees to foster Alibaba’s cultural
values. Alibaba employees treat him like a combination of father-figure, inspirational
guru, and band leader, resulting in a super-loyal and hard-working group of executives,
managers, and employees.
None of this is by accident. Ma spent many years studying Western culture, management
concepts and successful businesses, took what he needed and ignored the rest. He
combined that with his love and understanding of China’s culture and consumption habits

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to create an allencompassing technology success that has quickly become China’s first
truly global brand.
Another example of how Ma challenged the traditional patriarchal management hierarchy
in China is by employing and empowering women in Alibaba. The company currently
employs 47 percent women and has 24 percent women in its senior management. This is
unusual not just in China but in many if not most parts of the world.
Jack Ma takes the maxim “the customer is always right” a step further and believes that
businesses should allow customers to succeed. This total customer focus in one of the key
underpinnings of the company’s philosophy. His leadership style has also been described
as crazy.
“When I first appeared in Time Magazine, they called me Crazy Jack,” Ma observed. “I
think crazy is good. We are crazy, but we are not stupid. We know what we are doing.”
Ma also has a reputation as a risk-taker. When he entered the e-business industry, eBay
controlled 80 percent of the market. But Ma had a strategy that was as risky as it was
smart. He later observed that “eBay is a shark in the ocean, while we are a crocodile in
the Yangtze River. If we fight in the ocean, we will lose, but if we fight in the river we
will win.” Ma slashed fees for local firms using the service, losing heavily in this trade-
off. People again said he was crazy, but for Ma this was a calculated risk. And it soon
paid off. Alibaba kept eating into eBay’s market share in China for three years, at which
eBay acknowledged defeat and left China.
Jack Ma is an enigma and beneath his extraordinary success lies the passion, hard work,
and resilience to realize his vision of taking on big challenges and seeing them through.
He believes in life-long learning and philanthropy, and from his early years as an English
teacher to becoming a beloved entrepreneur and management guru, he still remains true
to his values.
Leadership succession: Daniel Zhang
So, what happens when such a leader steps down? How can a successful company
replace him in a way that continues the successful trajectory of the company? Jack Ma
shared an important lesson in leadership when he decided to step down as chairman of
Alibaba. In late 2018, he stated that he has started the process of “passing the Alibaba

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torch” to Daniel Zhang. Ma said the handover, which coincides with Alibaba’s 20th
anniversary, had been a decade in the planning and has helped shape Alibaba into the
multibillion-dollar e-commerce giant it is today. “I have put a lot of thought and
preparation into this succession plan for ten years,” Ma wrote in a letter to Alibaba
customers and shareholders. “This transition demonstrates that Alibaba has stepped up to
the next level of corporate governance.” “When Alibaba was founded, our goal was to
build a company that could make China and the world proud and one that could cross
three centuries to last 102 years.
However, we all knew that no one could stay with the company for 102 years. A
sustainable Alibaba would have to be built on sound governance, culture-centric
philosophy, and consistency in developing talent. No company can rely solely on its
founders.”

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Ma had been preparing his 46-year-old protege for several years. He said he had observed
Zhang demonstrate continued commitment to the company and prove his abilities by
managing 13 consecutive quarters of consistent and sustainable growth. “His analytical
mind is unparalleled, he holds dear our mission and vision, he embraces
responsibility with passion, and he has the guts to innovate and test creative business
models.”
Ma’s commitment to legacy planning likely stems from his early career as an English
teacher in his hometown of Hangzhou. “Teachers always want their students to exceed
them, so the responsible thing to do for me and the company to do is to let younger, more
talented people take over in leadership roles so that they inherit our mission “to make it
easy to do business anywhere,” he wrote. Ma was not explicit about his plans as he
announced he will step back from Alibaba, but he indicated his intentions to focus more
time on philanthropy in education and encouraging leadership among entrepreneurs,
young people and women.
Daniel Zhang has an impressive track record. He is the mastermind behind the biggest
sales bonanza on the planet – Single’s Day, held annually on November 11, or 11.11
(four ones to represent four single people). Launched almost a decade ago, Single’s Day
is now the world’s largest retail event, topping $25 billion in sales for Alibaba alone,
which makes it four times the size of Black Friday and Cyber Monday sales combined –
and that’s before Alibaba’s competitors get in on the action. For Alibaba, some 140,000
brands took part in the event, offering their products on Taobao and Tmall, the
company’s business-to-consumer platform, also created by Zhang.
Zhang is being watched with both curiosity and anticipation. He’s more pragmatic and
more reserved than Ma, but then most of China’s (and the world’s) business elites are
more reserved than Ma, who has a rather unique leadership style. Where Ma was the bold
visionary and organizational builder, Zhang is more of the shrewd strategist and operator.
“Climb into the ring with either and you will probably get knocked out,” says Jeffrey
Towson, a business professor at Beijing University. Alibaba, he adds, is the stomping
ground for some 66,000 of the smartest people in China. How smart do you have to be to

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be at the top of that pyramid? “Daniel is widely regarded as crazy smart and very tough,”
Towson says.
New leader, new plans
Jack Ma managed to take Alibaba to the very top of retail in Asia – will Zhang now take
it global?
Expanding the company’s global reach will be a priority. Alibaba is now aiming for half
of its revenue to be international. Alibaba wants to become the fifth largest corporate
economy – so it has to go global by default. And it’s already happening, in four main
ways: connecting foreign merchants with Chinese consumers, following Chinese
consumers as they go abroad, strategically expanding the platform across Asia, and being
smart and opportunistic everywhere else. All these approaches are consistent with
Alibaba's number one strategy, which is to build on its strengths.
Despite taking baby steps in all these directions, Zhang inherits Alibaba at a tricky time.
China’s trade war with the US isn’t helping the company in the slightest, impacting on its
aims to connect US merchants with customers back home in China. Then there is
Alibaba’s domestic rivalry with e-commerce giant Tencent, which shows no sign of
easing off. It forces the company to spend massively on both innovation and promotion,
to lure and keep shoppers and brands. And there are heavy costs springing from
Alibaba’s New Retail concept, which combines online shopping with bricks-and-mortar
supermarkets.
Right now, the UK is the third biggest market for Alibaba, and the company’s
Londonbased team is working hard to make shopping easier for Chinese consumers
abroad, part of the company’s expansion strategy. Eyeing Western consumers is also
plausible, but not part of the plan for the next couple of years, says the company’s
managing director in the UK, David Lloyd.
At the moment, Chinese as well as other Asian customers are a priority. And there are
many of them. Just two years ago, there were some 250 million buyers; today it’s 550
million – and Alibabsa has recently pledged to get to two billion consumers by 2036. It
will now be up to Zhang to deliver on this ambitious vision.

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Zhang is a known quantity not just at Alibaba, but in the global business world. He’s
been with the company for 11 years – and the past three years as CEO, effectively
managing the firm, with Ma acting more and more as its figurehead. Under Zhang,
Alibaba has switched from PCbased transactions to mobile, which now accounts for
about 80 per cent of entire gross merchandise volume.
Just like many Alibaba employees, Zhang sports a nickname inside the company –
Xiaoyaozi, the name of a character in a Chinese martial arts novel. It literally means the
“free and unfettered one”’ – possibly a reference to the character who stays out of battles,
but is great at training others. He reportedly has even used this nickname on his business
cards. With a diploma in accounting from Shanghai University of Finance and
Economics, Zhang first worked as a senior manager at global auditor
PriceWaterhouseCoopers and then chief financial officer at Shanda Interactive
Entertainment, a leading Chinese developer of online games. He joined Taobao, the
Alibaba-owned e-commerce site, as chief financial officer in 2007. He stayed, climbing
the ladder – becoming chief operating officer before taking over the chief executive role
from Jonathan Lu in 2015. Zhang has also been seen a lot in the West, frequently
appearing at the World Economic Forum in Davos and other high-profile events.
Gaining more and more hands-on experience running various subsidiaries of Alibaba has
certainly been the perfect training ground for the chairman role. “In the world of
business, the excitement never ends; the competition never ends. You must keep awake
every minute, keep your eyes open in your sleep. You must keep learning and
innovating,” Zhang said in a recent, and he is already doing just that.
After nineteen years at the helm, Ma’s decision to stand down wasn’t sudden, even if it
seemed so from the outside, says Matthew Wong, managing intelligence analyst at CB
Insights.
“It shouldn't cause any major unexpected shifts within the company as the narrative
around his retirement has been building for a long time,” he adds. After all, Ma is
handing over a hugely successful company with great prospects to someone he trusts and
has personally trained for the job for years – and someone who’s been doing the day-to-
day management since 2015. But Ma isn’t disappearing completely; he will remain a

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director on Alibaba's board and a permanent member of the Alibaba leadership team, still
working with Zhang. They should complement each other well. While Ma can come
across as more visionary and “passionate to influence the world at a higher level,” Zhang
is likely seen as more rational and strategically-minded.
Continuing to provide a premium shopping experience for millions of people a day is not
an easy task though, and despite the tangible success of the past few years, Zhang does
have pretty large shoes to fill. Connecting brands and consumers anywhere in the world
is another priority for Alibaba in the near future with the aim of delivering any product
from anywhere in the world to anyone within 72 hours. Will that happen during Zhang’s
time as chairman? At Alibaba, it seems, anything is possible. What does the future hold
for Daniel Zhang and Alibaba? We shall see.

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Case questions: (10 marks)

Introductory note: Cases by their very nature are static at a particular point in time. As
you prepare for the questions below, it might be helpful to update yourself about recent
activities of Alibaba’s new CEO, Daniel Zhang. Is he off to a good start?
1. In your view, is Jack Ma a Chinese leader or a global leader? Explain. (1 mark)
2. If you were Jack Ma, write your own definition of leadership. (1 mark)
3. What situational factors contributed to Jack Ma’s success at Alibaba? Explain. (1
mark)
4. Apply the GLOBE leadership dimensions to Jack Ma and explain his leadership style.
What can we learn? (1 mark)
5. Can you find evidence in the case that Ma exemplifies the application of the Pyramid
model of leadership? Explain. (1 mark)
6. How would you compare the leadership style of Jack Ma and Daniel Zhang? What are
the relative advantages and drawback of each style for a company like Alibaba? (1 mark)
7. Alibaba has been in the forefront in China in hiring and developing women managers.
How is this consistent with Alibaba’s corporate philosophy? (1 mark)

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8. Based on what you have learned, how would you describe the corporate culture at
Alibaba under Ma? Will this likely change under Zhang? Why? (1 mark)
9. What can global managers learn from the example of Alibaba under both Ma and
Zhang that can help them with their own leadership challenges in the field? Explain. (1
mark)
10. If there is one principal lesson from this case about global leadership, what would it
be? (1 mark)

Notes:
 This is an individual Big Assignment.
 The length of each answer should be approximately 300 words.
 Students should search for more academic materials (journal articles, conference
papers, books, etc.) about the case study to update and response the questions
successfully.
 Students must provide full quotations and references where possible in the answer
sheets.
 Any student plagiarism or using ChatGPT to respond the exam questions will be
considered as academic misconduct and incurred heavy penalties, from receiving a
zero grade for the assignment to being excluded from the University.
 The answer sheets should be bounded with the cover sheet. Student’s full name,
ID number and the program’s name should be available on the cover sheet.
 Students have 7 days to complete the Big Assignment.

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