Google in China A Case Study

Google in China A Case Study November 24, 2012

Google in China A Case Study Summary In 2006, the Internet search engine company, Google, along with Microsoft and Cisco, was charged with human rights violations based on their cooperation with the Chinese

Google in China A Case Study

government and their stringent censorship policies. What is striking about the actions of Google is their company slogan of Dont be evil which strives to convey that Google is a company that does good things for the people of the world. Googles decision to censor Google.cn revealed a significant ethical issue and calls to question the concept of doing business in a country which does not offer its citizens the same rights as United States citizens. So, in order to determine if Google is indeed acting ethically, we must ask, is Google participating in evil by cooperating with the Chinese government and are they really doing this as a means to increase their own profit? Or are they truly working towards bringing as much information as possible to the Chinese people and working around what is described as the Great Firewall of China. Our case study will look at both sides of Googles story and will consider if Google is collaborating with the Chinese government while ultimately increasing their bottom line or is Google living up to their motto of Dont be evil by giving information access to the Chinese people. And what possible recommendations could be made to Google to continue to offer their services as a top Internet Service Provider (ISP) to the Chinese people without stepping over the ethical line. Analysis and Recommendations When reviewing the actions of Google throughout this hearing, it is difficult to discern the true motives of this Internet giant. Google, which was founded in 1998, quickly became a leading provider of Web-based services on the strength of its popular search engine Google.com. (Boatright, 2012, 358.) With this strength also comes the idea that this type of organization can be used to either benefit people or can be used to substantially increase the bottom line of the company. By Googles adoption of their slogan Dont be evil, one would suspect that Googles main focus would be only to provide the best quality search engine without

Google in China A Case Study

censoring the information available on the Internet. One of the congresspersons at the hearing stated that Google had the power and creativity to bring openness and free speech to China (Boatright, 2012, 358) but they instead focused on their own profits rather than confronting Chinas demands for total control of internet information. One of the issues with Chinas censorship is that it does not follow strict guidelines. It is almost impossible to determine what is permitted and what is not due to the ever changing rules. So Google followed three principles when creating Google.cn: Google resolved to notify users when search results had been removed. This would create what they saw as transparent filtering. Private information about the users was not collected so that the company could not reveal to the Chinese government who was searching for what. All this user information was never collected and, therefore, Google did not offer e-mail or blog sites in China. Google.com and Google.cn both continued to be available. (Boatright, 2012, 359)

It is possible that by creating these principles, Google believed that they were working with the Chinese government while still offering its resources to the Chinese people thus allaying their conscious. According to the Wall Street Journal, Many foreign companies operating in China have to grapple with ethical dilemmas, including how to deal with pervasive corruption and where to draw the line on cultivating the political connections that can help them navigate the country's complex regulatory terrain. (Dean, 2010, para. 6) Google believed, though, that by going into China under the conditions imposed by the Chinese government, they were still offering a service of Internet access to all.

Google in China A Case Study

So what options does Google have? Do they continue to collaborate with the Chinese government by offering their watered-down ISP which is, in effect, Googles own selfcensorship? According to CBS news, China represents the second largest market in the world and by far the largest growth opportunity for Googles search advertising business. (Tobak, 2010, para. 4) If Google is entirely focused on the profit of their organization, then this would be the logical recommendation. But it isnt that simple. Google has made a name for themselves in the area of Corporate Social Responsibility by its motto, Dont be evil. The next option would be to pull their services out of China and give up their dealings with the Chinese government and its censoring policies. It is common knowledge that the Chinese governments censorship laws are an affront to human rights and the civil liberties of all people. The Chinese people have faced prison time and have been tortured because they dared to question these laws. So, Google can remove themselves from China and disallow the filtering of information. Neither recommendation seems appropriate so how can Google continue to be an effective ISP in China without cooperating with the Chinese government and how can they continue to uplift their motto while serving the shareholders of the company?

Evaluation of Progress Rarely do potential momentous business decisions get made without significant amounts of consideration and evaluation of progress. This is precisely the case in Googles decision to continue business in China. An evaluation of the progress of Google in China raises the point

Google in China A Case Study

that there are limits to the price an American company should be willing to pay for access to 300 million Web users (Editorial, 2010). The Chinese government gave Google a difficult choice of either censoring results deemed by the government as objectionable, or discontinuing business in china. Facebook, YouTube and Twitter are all banned in China. This in itself demonstrates the progress China has made and continues to make in their views on the internet and social network. China wants to keep these social networks and sites banned because they cannot control what people would be writing on them; it is hard enough for them to censor the internet so they are definitely not going to open up these sites so that the public can say whatever they want when they want. I truly hope that one day, hopefully in the near future, that the people of China will be able to experience true freedom of speech and that the government comes to respect the century that we are living in. Realistically, if Google continues to pull out of China, the Chinese people would be the biggest losers. I read that the major cause of occasional failures to act responsibly is the diversity of political and legal systems around the world (Boatright, 2012).

Specific consideration Financial conditions Googles dilemma of whether to operate in China under government regulation or to eliminate censorship of Google.cn is a complex one which involves several controversial factors. Respecting authorities in China and human rights and the freedom of speech debate play a fundamental role in Googles issue. Solving this issue involves weighing many aspects such as profit maximization, respecting Chinese authority, and/or making a decision that agrees most with the companys values and beliefs. Googles Foreign Direct Investment proved to be the

Google in China A Case Study

most risk bearing way of entering Chinas market. From a financial aspect, there would be a higher resource commitment from Google and the exit costs would be very significant. From a business prospective, the argument against Google entering China is Googles head-to-head conflict with the Chinese government. Censorship has always been seen as the price to pay for doing business in China for internet companies such as Google, Yahoo and Microsoft. Another argument against Googles move into China would be the competition; especially the Chinese internet provider, Baidu. In this case there may not necessarily be a right solution to this issue but a solution that is better than the others.

References Boatright, J. R. (2012). Ethics and the Conduct of Business. 7th Ed. Upper Saddle Brook, NJ: Pearson Education, Inc. Dean, J. (2010). Ethical Conflicts for Firms in China. Retrieved from http://online.wsj.com/article/SB126335402591827235.html Tobak, S. (2010) Google in China: Should Corporate Profits Trump Ethics? Retrieved from http://www.cbsnews.com/8301-505125_16228244215/google-in-china-should-corporateethics-trump-profits/