The Alibaba Group Business Ehincs - Essay Example

? Business Ethics The Alibaba Group overview Alibaba is an e-auction/e-commerce Hangzhou-based company, which specializes in global trading. It was established in 1999 by Jack Ma (Ma Yun). The company operates five e-commerce subordinate -companies which manage different aspects of business. The English-based site known as alibaba.com focuses on business-to-business kind of trading, especially for many international buyers who strive to contact sellers in China. The Chinese-based website known as china.com concentrates on business-to-business transactions within China, and finally, there is www.taobao.com, a consumer-to-consumer business site for Chinese clients. The Japanese-based website called Japan.alibaba.com mainly focuses on Japanese customers. At the moment, the Alibaba Group comprises the following subordinate-companies: Taobao.com, an online auction website for clients; Alipay, an online payments site, processing majorly payments emanating from China; Alisoft, a web services provider to China’s Small and Medium-sized ventures; Alimama, which is an online marketing exchange forum, that allows web publishers and advertisers to trade via online promotion inventory; China Yahoo!, which is a search engine; as well as Koubei.com, the largest communities in China for exchanging essential life information including as food, clothes, travel and housing (Bidwai 2010). Importance of business ethics and their impact on the organization Ethics means a collection of moral principles, a perception of right and wrong, goodness and badness of dealings as well as the motives and repercussions of these actions. When applied to business context, ethics refers to the study right and wrong, good and evil, and just and unjust dealings of businessmen. It refers to the study of business circumstances, decisions and activities where issues of what is right or otherwise are addressed. It addresses not only commercial enterprises, but also government entities, not-for-profit organizations (NGOs), charitable institutions among others (Crane & Matten 2010). At Alibaba.com, ethics is very important to the company in general and the HR department to be specific, for the following stated reasons: Ethics tally to essential human needs. All men naturally desire to be ethical; both in private life as well as in business where. By being a manager man knows that his judgment may influence a countless number of employees. Furthermore, most people desire to be part of a company that they can both respect and also be proud of, given that they perceive its purposed activities are honest and also beneficial to the whole society. The Group’s HR managers aspire to respond to the said needs of their employees. On the other hand, the managers feel an equal requirement to be proud of the company which they are directing. These basic ethical necessities force the organization to have an ethical orientation (Crane & Matten 2010). Values establish credibility with the larger public. A company that is perceived by the general public to be ethical as well as socially responsive gets to be honored as well as respected even by clients with no intimate acquaintance of its actual operations. There will always be automatic bias in favour of its services or products, given that people believe that the business offers value in exchange for their money. Its public concern will attract an instant response. Given Alibaba’s CSR (corporate social responsibility) comprehensive program, together with the existing code of business ethics, the company has been able to craft credibility with the general public it serves. Values confer upon the management integrity with its employees. Values are meant to be a mutual language to bring the company’s leadership as well as its people together. Company ethics whenever perceived by the employees as genuine enable the building of common goals, language and values. At Alibaba.com, the HR department has realized standing with its employees because it has been able to register credibility with the public. Neither a good business strategy, nor further-still, a generous reward policy and fringe benefits program can win employee trust, but seeming social and moral uprightness, that is depicted by the organization (Crane & Matten 2010). Values facilitate better decision making. Another point of great significance is that a moral attitude enables the management to make better decisions, meaning, decisions that are in the general interest of the public. This is so because value for ethics will compel the company’s management to take into consideration different factors including, social, economic, and ethical while making decisions. At Alibaba.com, the existence of a continuously improved upon code of business ethics has enabled both effective and efficient decision making by all the employees in the organization (Crane & Matten 2010). Ethics as well as profit go together. A company that is inspired by ethical behavior is also profitable. Alibaba.com is a value-driven organization and which is therefore mainly successful in the long term, although in the short term, it may initially seem to lose money (Crane & Matten 2010). The Law alone cannot protect the society, but ethics can. Ethics is vital because, the law and a lawyer cannot do all to look after the society. Technology is developing faster than the government can control it. People in a particular industry know the threat in that particular technology more than the existing regulatory agencies. In addition, the government cannot always control all the activities deemed harmful to the well-being of the society. Where the law fails, ethics will always succeed. An ethically- leaning management puts up measures to check pollution as well as protect employees health even before it is mended by law. An ethically good HR manager, that is the one who can reach out to disconcerted employees, will easily quell trouble quite effectively and efficiently than the police. At Alibaba.com the top management totally adheres to the established code of ethics and which has enabled the company to foster good working relations with its employees as well as the general society (Crane & Matten 2010). Alibaba.com environmental analysis Stakeholder identification. Stakeholders refer to any group of people or an individual, who can affect, or is actually affected by, the realization of the business’s objectives. They include employees, shareholders, customers, distributors, creditors and suppliers. The Alibaba Group: recognizes the relative significance of each stakeholder; their exact impact on the business; whether their influence is potentially positive or negative or either; the interests of every stakeholder group; the association with each category of stakeholders; the effect of the company’s actions on stakeholders; how the business and its marketing team should respond to the concerns of stakeholder. Stakeholders have diverse backgrounds that determine their functions. Literature based on stakeholder theory has acknowledged seven different types of publics including: community publics; the general public; government publics; pressure group publics; financial publics, media publics; and internal publics (Harrison 2010). Alibaba.com classifies customers in three main categories: internal, intermediate, as well as external. Internal customers are the ones who use the business’s services or products and are from within the firm. Intermediate customers are the ones who do not fit in the firm. Moreover, these are not end-users of the business’s products or services. External clients are the end-users of the services or products outside the firm. Stakeholder involvement in the company’s e-commerce system in which Alibaba operates, is not restricted to customers alone, but also to anybody who may affect the system (Harrison 2010). The software designing team at Alibaba has acknowledged three main categories of stakeholders whose needs and interests’ the company endeavors to address. Each one of these stakeholders has unique demands for services or products. The internal stakeholders include: shareholders, the expert group, and employees. Shareholders are holders of the e-commerce system. They hire experts and employees to develop the said system. These stakeholders may establish the development team as per the firm’s strategy. They facilitate the development from within. Intermediate stakeholders basically refer to suppliers and partners. Any firm which may not be in a position to perform all tasks alone may require assistance from other entities such as suppliers or partners, who provide these services from outside the company. However, because they strive to build the e-commerce system together with the firm, they may not be termed purely outsiders. They thus act as intermediary stakeholders (Harrison 2010). The Alibaba Group customers For Alibaba.com, customers are generally the SME firms which lack the ability or do not require building individual business websites. To negotiate with the prime business-2-business arena, these entities do not have many advantages to agitate for lower costs and just about all the standards are determined by the Alibaba.com. But with the enhancement of business-2-business sites, the clients may have that opportunity to select the other platform and that may also be their opportunity to bargain with Alibaba.com for extra rights. Alibaba.com works to enhance efficiency and effectiveness of their business in order to create loyal clients as well as attracting new ones (Bidwai 2010). The company appreciates that their clients have rights. According to the business, these rights are unchallengeable entitlements to fair handling when entering into relations with the business. The company deems that consumer self-esteem should be cherished, and that they have an obligation to treat clientele as ends in themselves, and not merely as means to the end of the enterprise. The company additionally observes the client’s right to fair pricing (Morrison 2011). The Alibaba Group suppliers Suppliers can profit from the success of the company by receiving orders for services and products and they can be harmed by failing to get orders. For Alibaba.com, there are few suppliers of raw materials. This is because the company is not a manufacturing entity but an e-service one. The largest cost for this business is thus the cost for selling. Therefore, the key suppliers are those businesses supplying advertisement for Alibaba.com, such as famous newspapers, magazines, and websites. At Alibaba.com suppliers get paid fairly as well as promptly for their supplies. Alibaba.com thus entirely recognizes supplier rights including the right to fair deals, contracts, or some level of loyalty. Some of the issues that suppliers have to contend with include: the loyalty questions, abuse of power; preferential treatment; bribes, gifts, and hospitality, as well as conflict of interest. To overcome the said challenges, Alibaba.com employs ethical sourcing and fair trade system to source for raw materials (Harrison 2010). The Alibaba Group employees Alibaba.com understands that their employees are entitled to certain rights that must always be considered during the time of their engagement with the business. The rights include: right to privacy, freedom from being discriminated against; right to participation, right to due process; right of association; right to a safe and healthy working environment; right to a fair wage; and the right to work. As a rule of thumb, labour movements tend to speak for hourly workers; while professional associations attend to the labour needs of salaried workers. Nevertheless, during many labour disputes, the salary-earning workers might picket in solidarity with their wage-earning counterparts. Recently, the percentage of the work force represented by labour unions has steadily deteriorated. Moreover, most union agendas have dramatically changed. Strikes occasioned with violence are gradually disappearing. Stock-ownership, benefits, and campaigns for living wage decrees are in. Alibaba.com, acts ethically by crafting an occupational structure which fairly and equitably compensates employees for their input (Harrison 2010). The Alibaba Group shareholders The common design in large businesses is a division of management and ownership function. This separation is at the center of present day capitalism. Owners do not any more have a personal connection to their corporation; instead they buy stock in the company, and expect the employees and the managers of the company to operate it in their concern. Stockholders have certain rights including: to sell their shares; the right to vote in the annual general meetings; the right to access some information about the business; the right to sue managers for cases of misconduct; and some residual rights in the event of the corporation undergoing liquidation. At Alibaba.com, the top level management work is to ensure that they act on behalf of the company shareholders skillfully and diligently (Blowfield & Murray 2008, pp.396). Government regulations Unlike other stakeholders, the government in theory represents an entire community given that it is elected by the citizens of a town, a certain region, a country or sometimes a continent. In its role as the elected envoy of the interests of its citizenry, it defines the terms for the license to run any business by either enabling business and or restricting business. The management of Alibaba.com believes that the company can wield substantial sway during the execution of governmental policies. This, the company believes can be realized through approaches such as lobbying. Given that organizations are still located within nation states they are in effect still subject to law of the land, otherwise known as imperative regulation (Morrison 2011). Competition For many industries, this is the main determinant of the extent of competitiveness in that industry. Sometimes business rivals compete insistently and in other times rivals compete in non-price strategies such as marketing, innovation, etc. The most competitive businesses of Alibaba.com are search websites such as Google.com and Baidu.com. The potential clients may search the outcomes just through these free as well as simpler sites but not via the business-2-business e-platform, an action that may lead Alibaba.com to lose lots of revenue (Griffiths & Wall 2011). The Alibaba Group CSR initiatives Alibaba.com strongly believes that corporate social responsibility must be an integral part of the organization’s business model. This has made the company’s CSR efforts to mature together with the firm in pursuit of crafting a better society. In addition to encompassing social aspects into the operational and business model to foster a more enduring future for its clients, employees and together with the rest of the world, the organization has also sown seeds of public welfare as well as environmental protection in employee/customer minds. This aims at diffusing the company’s spirit of caring and giving beyond the boundaries of the organization (Blowfield & Murray 2008). Alibaba.com has contributed to the rebuilding efforts in China’s province of Sichuan since the devastating 5.12 earthquake which struck in 2008. In addition to coordinating a variety of charity initiatives to help those who were adversely affected switch back to their routine lives, with the company has introduced different programs that focus on helping the residents of the County of Qingchuan, one of the areas that experienced the most devastation from that particular disaster. In 2010, Alibaba.com offered more than 200 computers to the schools in Qingchuan County, in order to help them upgrade their educational facilities. The company’s staff also formed a team of volunteers called ‘happy orange’ to visit various schools in the affected region at least once a month. The team participated in games with the students and hosted more fun activities for them in order to promote their social and psychological wellbeing (Blowfield & Murray 2008). Free e-commerce training from Alibaba.com was offered to a number of business vendors in the County of Qingchuan to help them revitalize their businesses by strapping up the potential of the Internet. 1n 2010, the Alibaba.com organized about 14 training conferences for about 600 small business vendor in the affected areas. Alibaba.com also refurbished and enhanced the e-commerce instruction center in that County, which was set up and sponsored by the company in The company has also dedicated to continue with their relief efforts in Province of Sichuan for at least six additional years to support individuals who were affected by the disaster as they struggle to reconstruct their lives (Bidwai 2010). Animal welfare. Further, to the organization’s ban on cat, shark fin, and dog fur as well as meat products, the company has also set off a ban on the trade of bear bile products on their sites in 2010. The restriction pertains to all the business online marketplaces together with the business’ sister firm Taobao, which is the largest online retail website in China. The company has been working with an organization called Animals Asia, which is a Hong Kong-based welfare group that deals with animals. This initiative has led to saving of about 330 bears in Vietnam and China. The company was also involved in rescuing an adult bear from farm in Sichuan Province (Bidwai 2010). Environmental protection. In 2010, the Alibaba.com did organize the ‘Green Mobilization’ project to encourage its entire employee to help preserve the globe by developing an eco-friendly day-to-day habits like reducing the use of throwaway boxes, chopsticks, and paper cups; restricting the use of billboards wherever possible; embracing double-sided mode of printing papers; switching off monitors of computer while off-duty, etc (Bidwai 2010). Every year, Alibaba arranges for tree planting activities where more than a thousand employees participate in. Since the initiation of the program’s approximately 25000 trees have already been planted. About 446 tons of the gas carbon dioxide is expected to get absorbed when these trees are completely grown (Bidwai 2010). To highlight the significance of committing a green working environment across the company, Alibaba has instigated the ‘Green Commitment’ crusade and called on its staff to declare their dedication to a greener environment. The crusade has received a lot of support for top management of the organization down to the lowest managerial cadre. The ‘Green Gurus’, the biggest environmental group within Alibaba.com that has over 1000 members was also established during the year with an assignment of creating a more greener working surrounding/environment for all their fellow colleagues. The Green Gurus advocates the belief of initiating the green scheme at the grass-roots points, and formed their own team to design company-wide initiatives for the environment (Bidwai 2010). Challenges posed by business ethics to the organization and its stakeholders According to Bidwai (2010) Alibaba is a Chinese company whose business ethics are affected by a number of factors including the following: The importance context. The Chinese Confucius history has crafted a different approach and ways of conduct in Chinese business. In order to conduct business in china, it is a must to respect and comprehend these differences. Confucian schooling contributes positively to the concept business ethics, for instance through the emphasis on trustworthiness. There are some comparisons between Chinese and Western cultures which require to be considered; for instance rule of law is quite vital in China and yet this supersedes the Confucian training of relationships and task shaping behaviour. This is why in some cases, respecting a structured relationship for example not reporting your parent to the authorities like the police if he happens to steals, given that he commands the child’s respect, can result to corruption. A key message is thus to be aware of and strive to understand the differences in values between Chinese and Western culture, but also reflect on the existence of several universal values (Bidwai 2010). There is therefore that need to stress the case for business ethics in China, and craft the point that there are payback. The consumer movement is a very powerful incentive to business ethics in the country. Consumers are eager to take action hostile to any business that fails to tore the line. Brand Development requires constructing a reputation that is based on reliability as well as trust. Safe conditions of working. New generations are particularly aware of the standards of living regarding their equals in the Western world and hence, are increasingly less ready than their forerunners to accept poor conditions at the workplace. To inspire trustworthiness there is necessity for transparency in doing transactions. There also needs to be effective education of business ethics, incorporated into courses, as well as in business life. Businesses ought to contribute positively to the existing social system. The gap between the rich and the poor is a key concern for the government. Two-thirds of the country’s populace lives in the rural areas where there is high demand for education and development. This offers businesses with a key opening. Confronting discrimination. Gender discrimination is reduced in China compared to Japan. In Taiwan and Hong-Kong for instance, women have a high chance of occupying responsible leadership ranks. The media has a commanding influence in China and is thus largely accountable for the awakening of the civil society as well as consumer awareness regarding business ethics. Businesses therefore, need to be conscious of this kind of danger that it can create as per their reputation. There is a growing alarm in China about money lost via corruption deals. Whereas in India the levels of corruption are low, in China, the opposite is the case. Since the Bhopal occurrence which contaminated the Songhua River in the year 2005, there currently exists a large interest for the environment in China. Strategies for improving business ethics practices at Alibaba Group Support by Alibaba.com top level managers for a strong ethical conditions. In order to reinstate and sustain a culture that espouses ethical and honest behaviours, managers must verbally encourage ethical environment and persistently make ethical behaviour part of the organization’s program (Fisher & Lovell 2008). Ethics codes and instruction programs. A code of morals consists of a formally written collection of ethical values that guide an organization’s activities. Most regulations offer guidance on ways of treating suppliers, customers, competitors and other stakeholders. The company therefore needs to set up code of business demeanor to guide staff behaviours. There is need for the institution of an annual business ethics instruction for the staff. Since job pressure has been acknowledged as one the as a main cause of immoral behaviour, in order to lessen the pressure, commitment and communications by top level managers are suggested (Fisher & Lovell 2008). Rewarding just behavior: for example through the protection of whistleblowers. It is not adequate to simply punish unethical behaviour; Alibaba.com managers must also reward good ethical behaviour, for instance by encouraging whistleblowers (Fisher & Lovell 2008). References Blowfield, M & Murray, A 2008, Corporate Responsibility – a critical introduction. Oxford: Oxford Univeristy Press. Bidwai, SV 2010, Alibaba competing in china and beyond: case study analysis, viewed on 14 May 2013, Crane, A & Matten, D 2010, Business Ethics, 3rd Ed, Oxford, Oxford Univeristy Press. Fisher, C & Lovell, A 2008, Business ethics and values, Prentice Hill, London. Griffiths, A & Wall, S 2011, Applied economics, 12th Ed, Prentice Hill, London. Harrison, A 2010, Business environment in a global context, Oxford University Press, London. Morrison, J 2011, The global business environment: meeting the challenges, 3rd Ed, Palgrave, Australia. Read More