Succession, a headache at Alibaba Group

Jack Ma, chairman and chief executive officer of Chinese e-commerce giant Alibaba Group, a few years ago joked he couldn't find a rival even with a telescope. It is the second-largest Internet company by sales in China, the world's second-largest economy.

However, growing pains always go together with glory. As Alibaba becomes bigger, Ma may have to eat his words now as the company faces an important rival: itself.

In June, as Alibaba expanded, he told The Wall Street Journal: "We don't have any experience and don't know how to organize."

What followed was the company's structural reorganization last month, in which its six subsidiaries were transformed into seven business groups, as a way of maintaining its overall control over its various business arms.

But there are more challenges the company is faced with, including preparing the next generation of management, the dilution of corporate culture and a change of management mindset.

Ma, 47, who used to have a very high public profile, giving passionate speeches, is seldom seen out and about now. So how engaged is he with the company?

"He has been gradually stepping back from the daily management," said Zeng Ming, Alibaba's chief strategy officer. "But he is still involved in the most important issues of the company's development."

In 2010, Ma said he was already "old" and hoped a younger generation would inherit the management of Alibaba, which he said he wants to last 102 years. Ma, who hopes to spend half his time basking in the sun and half thinking about how to use money 10 years ahead, has been pushing this project forward by preparing future leaders of the company.

He set up a "class" in June that includes some 30 people who are possible future leaders, said David Chang, vice-president of Alibaba's human resources department, in an interview with China Daily.

Three classes have been held so far. Ma taught them himself, expounding on real-life business projects, giving lectures and recommending books, among other subjects.

A broader preparation of future leaders is going on that targets executives above the senior director level. Alibaba had earlier set up an organization department, or Zuzhibu, borrowing a frequently used department name in the Party organizations that are responsible for developing the nation's leadership pool.

One of the main tasks of the 200 members of Alibaba's organization department is job rotation across different businesses. While it breaks the orderliness in the original business operation, it's a way of making executives familiar with Alibaba's numerous interests.

"Outsiders may find Alibaba a bit messy," said Zeng. "It seems that we are making trouble for ourselves but the fact is, if we don't do this, the market will make trouble for us in the future."

Alibaba, founded 13 years ago, has been growing at a pace that sometimes overwhelms itself. Its online shopping websites, which together account for more than 70 percent of China's online retail market, are expected to handle transaction volumes of more than 1 trillion yuan ($157 billion) this year, up 150 percent from 2010.

However, "a company with considerable scale should introduce professional management from outside but Alibaba just doesn't like this idea," said Hong Bo, a Chinese IT critic, adding that this will be a long-time problem for Alibaba's management.