Successful Entrepreneurship in China
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Network Intelligence Studies Volume VII, Issue 14 (2/2019) Sorin-George I. TOMA Faculty of Business and Administration, University of Bucharest, Bucharest, Romania Perspective, SUCCESSFUL opinion and ENTREPRENEURSHIP IN CHINA: commentary THE CASE OF JACK MA Keywords Entrepreneurship; Jack Ma; China; Alibaba JEL Classification L26, M10 Abstract In the last decades entrepreneurship has received substantial interest from both researchers and practitioners all over the world. The determinants of successful entrepreneurship are diverse and numerous, such as intelligence, innovation, economic context, entrepreneurial policy, education, experience, perseverance, and leadership. Today’s modern China provides many business opportunities, efficient financial markets and legal institutions, and entrepreneurial ecosystems for successful entrepreneurship. The goal of the paper is to present the case of Jack Ma, one of today’s Chinese successful entrepreneurs. The research is based on a case study. The paper demonstrates that Ma, the co-founder of Alibaba, has succeeded in achieving the status of a successful entrepreneur both in China and worldwide. 121 Network Intelligence Studies Volume VII, Issue 14 (2/2019) INTRODUCTION section presents the results of the research. The paper ends with conclusions. In the last decades entrepreneurship has received substantial interest from both researchers and practitioners all over the world. Entrepreneurship LITERATURE REVIEW provides jobs, creates entrepreneurial ecosystems, leads to firm formation, ensures economic There is a plethora of studies and researches dynamism, and contributes to economic growth and regarding the topic of entrepreneurship in China. development (Decker et al., 2014; Stam and Spigel, After the end of the Second World War, China 2016; Toma et al., 2014; Wennekers and Thurik, became a communist state. Under the rule of Mao 1999). The determinants of successful Zedong, the Chinese Communist Party was the most entrepreneurship are diverse and numerous, such as radical opponent of private businesses. intelligence, innovation, economic context, Paradoxically, the same party under the leadership entrepreneurship policies and programs, education, of Deng Xiaoping undertook fundamental reforms experience, perseverance, and leadership (Ács et al., towards the market economy in the late 1970s. 2016; Baum and Locke, 2004; de Bruin and Dupuis, A vast programme of modernization throughout the 2018; Dyke et al., 1989; Shah et al., 2015; Sorensen country- the so-called “four modernizations”- in and Chang, 2006). industry, agriculture, science and technology, and The People’s Republic of China (hereafter, China) national defence started. It was followed by the represents a challenging example related to the creation and development of the Special Economic theme of successful entrepreneurship. After the Zones (Shenzhen, Shantou, Zhuhai, Xiamen, and foundation of the Chinese communist state in 1949 Hainan Island) that offered a favourable business private businesses were eradicated but they regained environment. Also, China signed two important their legitimacy in 1978, following the Third Plenary agreements for business cooperation with the United Session of the 11th Central Committee of the States of America (USA): one allowed Coca Cola to Communist Party, when the socialist-market be bottled and sold in China, the other made possible oriented reforms were implemented (Li et al., 2009). the acquisition of three Boeing jumbo jets (Porter, Since the end of the 1970s, China has attracted an 2011). Moreover, the social institutions created by enormous influx of foreign investment and the Chinese communists, such as schools, hospitals, witnessed a significant know-how transfer that and houses, saved “the nascent capitalists the price fuelled China’s pragmatic and old entrepreneurial of developing a workforce” (Fishman, 2006, p. 52). spirit. China recognized entrepreneurship as „one of Thus, the roots of market economy emerged in the key driving forces of sustained economic communist China. As a consequence, more and development and is accordingly making many more entrepreneurial activities flourished across the efforts to encourage and facilitate entrepreneurial country and highly contributed to China’s rapid activity” (He et al., 2019, p. 563) and „made starting economic development (Yang and Li, 2008). From a business easier by launching online company a historical point of view, the development of registrations and by simplifying social security entrepreneurship in China covered three main registrations” (World Bank Group, 2019, p. 136). phases (Table 1). There are some specific features of This is why the expansion of entrepreneurship is entrepreneurship in China. It is said that: needed to “improve China’s long-term economic “its market condition allows for a relatively strong prosperity by building sustainable core non-market dimension of entrepreneurship; competencies” (Zhang et al., 2013, p. 3) and to its political environment created town-and-village remain „an important engine of growth of the enterprises (TVEs), which was an early form of Chinese economy” (Phan et al., 2010, p. 176). non-market entrepreneur-ship in modern China Today’s modern China provides many business from 1978 to 1992; opportunities, efficient financial markets and legal China’s high degree of institutional uncertainty institutions, and entrepreneurial ecosystems for resulted in the creation of entrepreneurs with a successful entrepreneurship, such as Alibaba or “red hat” (“red hat” enterprises allowed Huawei (Huang, 2008; Jia et al., 2019; Plafker, businesses to register as public-owned 2007). In this respect, more than 37,000 Chinese organizations, thus concealing their intrinsic companies are already operating around the world private ownership)”. (Zhang et al., 2013, pp. 5-6) (Woetzel et al., 2019). There are many success factors of the The goal of the paper is to present the case of Jack entrepreneurial activities in China as follows: Ma, one of today’s Chinese successful entrepreneurs reputation for honesty; and the co-founder of Alibaba. The paper is good customer service; structured as follows. The next section deals with the good general management skills; literature review. The research methodology is charisma; displayed in the third section of the paper. The fourth friendliness to customers; hard-work; 122 Network Intelligence Studies Volume VII, Issue 14 (2/2019) education; around the city and had the possibility to improve his access to capital; English knowledge. Also, he spent most of his free good product at a competitive price; time reading martial arts novels. previous business experience; In time, Jack met an Australian family and ability to manage personnel; developed a good relationship with their two kids. In satisfactory government support; 1985, they invited Jack to spent a summer vacation in Australia. Three years later, he graduated with a political nimbleness; bachelor degree in English the Hangzhou Teacher’s good location; Institute, after he failed the entrance exam three interpersonal harmony; times. Ma started to work as a lecturer with the personal networks relationships (guanxi); School of English and International Trade at the proactiveness; Hangzhou Dianzi University. support of family and friends, etc. (Ahlstrom and In 1994, Jack open his first venture: the Haibo Ding, 2014; Chu et al., 2011; Li and Matlay, 2006; Translation Agency (Gregersen, 2019). As he Liao and Sohmen, 2001; Tan, 2001). became known for his English skills and he always In 2018, young people aged 25-34 represented the thought to start a business, the idea to serve the most active group of entrepreneurs in China (Bosma increasing demand of local businesses acting in and Kelley, 2018). On this line, Jack Ma started his tourism and foreign trade was put into practice. first business in his 30s and constitutes a valuable In 1995, Ma travelled to the USA. There, some example of a highly successful Chinese American friends introduced him to the internet. entrepreneur. Sitting in front a personal computer for the first time in his life was a great challenge for him. He searched the word “China” and had the surprise to find no METHODOLOGY OF RESEARCH information about his country. This was a crucial moment in his life because “Ma realized that not In order to reach the aim of the paper the author used only did the internet have tons of information to a case study. A case study represents a form of offer it also held amazing potential for business” research that “endeavors to produce rich description (Clark, 2016, p. 13). He instantly thought “if we can about singular contemporary events or topics“ take companies in China and make a home page for (Lapan and Quartaroli, 2009, p. 166). It provides a them, this could be something big” (Erisman, 2015, detailed and intensive analysis of a single p. 11). organization, a single location, a person or a single When Jack returned home, he founded China event (Bryman and Bell, 2007). First, the author Yellow Pages, his first Internet company, that identified the libraries from Bucharest (British brought him almost $1 million. In 1999, Ma and his Council, the Central Academic Library “Carol I” 17 business partners launched Alibaba at a press Bucharest) where the data could be found. Second, conference in Hong Kong when he announced a $5 he explored several sources of secondary data such million investment led by Goldman Sachs. From the as journals, reports