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Google in China: Kirsten E. Martin, “Google, Inc., in China,” Business Roundtable Institute for Corporate Ethics, Case BRI-1004. Abby Salisu Daniel Pedreira Heather Gray PUBP 502, Section 001 with Professor Audrey Kurth Cronin April 29, 2013. Google in China. Google in China.

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Google in China:Kirsten E. Martin, “Google, Inc., in China,” Business Roundtable Institute for Corporate Ethics, Case BRI-1004

Abby Salisu

Daniel Pedreira

Heather Gray

PUBP 502, Section 001 with Professor Audrey Kurth Cronin

April 29, 2013

google in china1
Google in China
  • Presentation Agenda
    • History and Case Overview
      • About Google and its Corporate Ethos
      • China – Human Rights and Censorship
      • Decision to Pursue Chinese Market
    • Google’s Conundrum and Decision
      • Options
      • Outcome
    • Analysis and Relevance
      • Corporate Ethics, Public Policy and Decision-making
      • Globalization, Nation-State and the Market State
      • State Sovereignty
      • Cyber and Other Issues
    • Wrap Up

“There is not a moral vice which cannot be made into relative good by context. There is not a moral virtue which cannot in peculiar circumstances have patently evil results.”—Stephen Bailey

google and its corporate ethos
Google and Its Corporate Ethos
  • “Google is not a conventional company, we do not intend to become one.”
  • Google’s mission is to organize the world’s information and make it universally accessible and useful.
  • Google’s History and Shift from Private to Public
  • Ten Things We Know To Be True*

* http://www.google.com/about/company

google and its corporate ethos1
Google and Its Corporate Ethos

Revenue

  • In 2005 – cash flow of $3.45 billion
  • In 2006 – generated more than $1 billion every quarter
  • Revenue of $6.14 billion and a net profit margin of 25.18%
  • In 2012 – revenue hits $50 billion*

Google’s Global and Expanding Presence

  • United States, Europe, Canada, Latin America, Asia Pacific, Middle East, Africa

* http://dawn.com/2013/01/23/google-2012-revenue-hits-50-billion-profits-up/

google and its corporate ethos2
Google and Its Corporate Ethos
  • Google’s Global and Expanding Presence*

* http://www.google.com/about/company/facts/locations/

china human rights state censorship of internet
China – Human Rights & State Censorship of Internet
  • Tom MacLean
  • History of Human Rights Abuses in China
  • Chinese Monitoring and Enforcement
    • Restrictions
    • Chinese internet was controlled by governmental censorship and self-censorship
    • Monitored foreign internet traffic
    • Government law enforcement by

employing internet police

  • State Department
chinese market
Chinese Market

Why pursue?

  • Emerging Market
  • China Committed to Economic Reform and Interest in World Market
  • Strong Economy, Great for Business
  • Competition (Baidu, Yahoo!, Microsoft, etc.)
  • Google.cn and Disclaimer
  • Congressional Testimony
    • Hearing before the House Committee on International Relations Subcommittee on Asia and the Pacific (Elliott Schrage)
google s options
Google’s Options
  • Option #1 – Enter China
  • Pros: 457 million Internet users* = an open and growing market for increased revenue
  • Internet usage can assist in curtailing gov’t control on media  democratization?
  • Improve access to information (health, science, research, education, etc.)
  • Cons: Critics could criticize perceived complicity with Chinese gov’t + its anti-democratic + repressive activities

*Source: China Internet Watch. 2011. http://www.chinainternetwatch.com/whitepaper/china-internet-statistics/

google s options1
Google’s Options
  • Option #2 – Forgo China
  • Pros: Many in the west would be pleased that Google chose principle over profit
  • Addresses cyber issues and hacking (2010)
  • Cons: China’s internet market would be dominated by Chinese companies with a pro-govt/censorship stance.
  • Economic impact on Google
  • Doubt may exist regarding Google’s motives for exiting China
  • “The danger for the Chinese internet scene is that it becomes a less competitive place.“- Jeremy Goldkorn, founder of Danwei.org

*Image Source: Boozom. http://www.buzzom.com/2010/03/google-china-conflict-what-the-world-says/

google s options2
Google’s Options
  • Option #3 – Relocate to Hong Kong
  • Pros: Google will be able to profit from the HK market
  • Censorship-free
  • Cons: H.K. market is not as large as P.R.C.’s. Economic gain will be less
  • May be seen as a reaction to mounting external pressure, not a sincere move

*Source: China Internet W. http://www.chinainternetwatch.com/whitepaper/china-internet-statistics/

outcome
Outcome
  • Today, Google has three offices in China and one in Hong Kong
  • Google is #2 search engine in the P.R.C.
  • Google search sites were moved to H.K.
  • Solution was a combination of

all three options

  • Maintain ethical approach

while making a smart business

decision?

corporate ethics public policy and decision making
Corporate Ethics, Public Policy and Decision-making
  • Distinction between public and private morality and gray area
  • Taking Your Ethical Code to China
  • “Don’t Be Evil” Mission
  • Methods for ethical decision making in international contexts – decision tree*

* J. Brooke Hamilton, Stephen B. Knouse, and Vanessa Hill, “Google in China: A Manager-Friendly Heuristic Model for Resolving Cross-Cultural Ethical Conflicts,” Journal of Business Ethics Vol 86 (2009), pp. 143-157.

globalization nation state and the market state
Globalization, Nation-State and the Market State
  • The Challenge for MNCs
  • Lessons Learned for CSR?
  • Bobbit Chapter 10, The Market-State
    • Transnational world market
    • Information standard
    • Global communications network
    • Propaganda and media
  • Will/Can China Become a Market-State?
    • “The transition to the market-state is bound to last over a long period and put into conflict the ideals of the old and new orders.”*
  • * Bobbitt, Philip (2011-07-06). The Shield of Achilles: War, Peace, and the Course of History (p. 233). Random House, Inc.. Kindle Edition.
cyber and other issues
Cyber and Other Issues
  • Continued Drama between Google and China
  • Android
  • China (Baidu) in U.S. (Silicon Valley)
  • No Google?
google in china additional reading
Google in China –Additional Reading
  • J. Brooke Hamilton, Stephen B. Knouse, and Vanessa Hill, “Google in China: A Manager-Friendly Heuristic Model for Resolving Cross-Cultural Ethical Conflicts,” Journal of Business Ethics Vol 86 (2009), pp. 143-157.
  • Justin Tan and Anna E. Tan, “Business Under Threat, Technology Under Attack, Ethics Under Fire: The Experience of Google in China,” Journal of Business Ethics Vol 110 (2012), pp. 469-479.
  • http://sitemaker.umich.edu/infosurgentschina/google_china_controversy