Sustainability Condition of Open Innovation: Dynamic Growth of Alibaba from SME to Large Enterprise

Abstract

Research Question: Open innovation and the open business model exaggerate complexity (a transaction cost) in addition to the realization of emergence and its lock-in. Within a short period, Alibaba has become one of the global top e-commerce companies with several open innovation business models. Our research question was: “How could Alibaba become a global top e-commerce company in China in such a short time?” Research Method: We chose a deep interview method, participatory observation, and meta-analysis to answer this research question. Research Result: Alibaba has applied global, creative e-commerce business models through open innovation in a short time. In addition, it has overcome complexity—i.e., the cost of open innovation and the force that breaks down a company—through an open innovation-friendly culture. This is a “Jack-Ma style consumer confidence and new Guanxi culture”, a new and strong Chinese corporate culture. Alibaba has also undergone the expansion of its open business model feedback loop platform. This study investigated the expanded open business model feedback loop platform, the continuously strengthened open-innovation-friendly culture, and complexity, with the latter being the cost of open innovation, which was controlled by an open-innovation-friendly culture and open business model feedback loop.