Alibaba’s top two salespeople made 60% of sales. They were fired for giving bribes

Jack Ma is the founder and chairman of Alibaba. Photo credit: Asia Society.

As the internet bubble burst in 2002, Alibaba faced a tough decision.

It set a goal of making US$1 in profit (yes, US$1. It had a net loss before that). It would die if the goal wasn’t achieved. At the time, in order to make money, it offered web design services to clients. And in order to snag clients, it would have to offer bribes.

Alibaba held an all-day meeting to discuss this. “We understood that if we offered bribes, we could survive. But if we didn’t, our company would likely die,” said Alibaba founder Jack Ma in a recorded speech to the Honour International Symposium in Singapore.

“We met until 4pm and finally decided: we will never offer bribes. We would rather close down the company than operate without integrity.”

It worked out nonetheless, and they made a profit that year.

However, by the end of 2002, they faced another big decision.

At the year-end review, they discovered that two employees accounted for over 60 percent of the entire group’s sales. It was too good to be true: they had achieved that by giving kickbacks.

Ma faced a dilemma. “If we fire them immediately, the company will not have profit. If we do not kick these two employees out, then what does this signify about us? It would imply that our words are empty.”

“So we finally decided to let these two employees go.”

Integrity leads to success

Integrity is embedded into Alibaba’s culture and everyday practices from day one. In fact, Ma argued this is critical to its success.

“When Alibaba was founded, we were in a very difficult situation. We had nothing. Nobody believed in what we did. Everyone said we were lunatics or cheats,” recalled Ma.

What grew the company was not money or talent but its values: customers-first, team spirit, and integrity. Being transparent with customers helped convert them into long-term clients.

Our employees are not allowed to accept free car rides or meals.

Enshrining integrity

Global values?