Corporate Culture

HOW ORGANIZATIONAL CULTURE SHAPES COMPETITIVE STRATEGIES: A COMPARATIVE CASE STUDY OF TWO ECOMMERCE FIRMS IN CHINA
Qiang Ye, Harbin Institute of Technology, Harbin, P. R. China, [e-mail] Qing Hu, Florida Atlantic University, Boca Raton, Florida, USA, [e-mail] Yijun Li, Harbin Institute of Technology, Harbin, P. R. China, [e-mail]

Abstract
Many well-established multinational firms have been attracted to China by its tremendous market size and fast growing economy. While many have succeeded and enjoyed significant returns on their investments, some have failed and suffered significant financial losses. In the e-commerce market, failures seem to be more frequent than successes. In this study, we attempt to find some answers as to why e-commerce market is especially tough for foreign firms by using a comparative case study in which the epic battle of two giants in Chinese C2C market during 2004-2006 is analyzed. We argue that other things being equal, the local firms have an embedded competitive advantage if the management can transform a better understanding of the national culture into an organizational culture of innovativeness and market responsiveness. Such organizational culture, according to the resourced based view, could have significant impact on the competitive strategies and eventually determine the market performance of the firm. Keywords: e-commerce, China, organizational culture, national culture, performance, strategy.

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INTRODUCTION

In April 2003, a handful of top programmers and managers working for a start-up Internet B2B company called Alibaba in Southern China were summoned by the founder of the company and were given a secret mission: develop a C2C Internet auction site in three months or less to counter the much celebrated entry of eBay into the Chinese market. The new company was named Taobao, meaning “treasure hunting.” At that time, the mission was almost impossible: eBay is the Goliath of the e-commerce

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