Corporate Responsibility

Spring Term 2009

Case Report: Google

4th June 2009

Table of contents
1.

Company description.....................................................................................................3

2.

Industry description.......................................................................................................3

3.

Google and Corporate Responsibility.........................................................................4

3.1 Understanding of the Game..........................................................................................4
3.2 Rules of the Game........................................................................................................ 5
3.3 Actions within the Game................................................................................................5
3.4 Used Instruments for Communication...........................................................................6

4.

Censorship.................................................................................................................... 7
4.1 Dilemmas faced by Google..........................................................................................8
4.2 Googles response to the dilemma...............................................................................9
4.3 Evaluation based on Golden Rule...............................................................................10

5.

Privacy........................................................................................................................ 10
5.1 Dilemmas faced by Google........................................................................................10
5.2 Googles response to the dilemma.............................................................................12
5.3 Evaluation based on Golden Rule...............................................................................13

6.

Conclusion.................................................................................................................. 13
6.1 Lessons Learnt............................................................................................................ 13

1. Company description
Google is a US internet services provider located in Mountain View, California. It was
founded by Larry Page and Sergey Brin who positioned Google differently from its
competitors by emphasizing on transparency in its searches using the page rank system and
by downplaying the role of profits. The two Stanford graduated students developed a search
technology, that developed Google.com into the most popular search engine in the world.
The market share of the search engine is 53.6%, ahead of Yahoo (19.9%) and Microsoft Live
Search (12.9%).
Google is earning its revenue with advertising related to its services like: Internet search, email, online mapping, office productivity, social networking and video sharing services.
Since 2004 Google became a public company by going for a dutch auction IPO at the
NASDAQ. Its revenue increased by 31% to approximately $22 billion and its net income
increased by 6% to $4.2 billion in the year 2008.
After the IPO many people criticized that the company culture of Google had changed,
because of shareholder pressure for employee benefit reductions and short term advances.
However, Sergey Brin and Larry stated that the IPO wont have any impact on the Corporate
Culture. So the Google mission is till this day to organize the worlds information and make
it universally accessible and useful. Furthermore Google's corporate philosophy embodies
such casual principles as "you can make money without doing evil," "you can be serious
without a suit," and "work should be challenging and the challenge should be fun.1

2. Industry description
Google acts in an economic system that is characterized by market competition. Main
players that run a general content/topic search engine like Google are for example Microsoft
and Yahoo. Besides these, numerous other companies run search engines on specific topics,
on various types of information (e.g. multimedia, blog) and with various models (e.g. open
source, metasearch). The players in this industry are aware of the fact that corporate
responsibility is an issue. At Yahoo!, we believe in sharing success and treating people right.
We share our success with the communities we live and work in. We treat our employees
right, celebrating their diversity and encouraging them to experience the joy of volunteering.
We strive to do our very best for our employees, shareholders, customers and
the environment. Thats the way Yahoo, one of Google s main competitor states its
corporate responsibility and others do so in a similar way. Nevertheless, considering the
enormous amount of players in the market it is almost impossible for any company to have
complete control to realize social states and to avoid dilemma structures that are caused by
1

"Google Corporate Philosophy." Google. Retrieved on 31 August 2006

problems of incentives or information. Furthermore, with the globalized character of the

business, conditions for functioning institutions are hard to create. This results only in
national/regional institutions (e.g. California Initiative for Internet Privacy (CIFIP), Chinas
regulations/censorship). On an international level institutions that are so substantial for
investments in social cooperation for mutual advantage are discussed (e.g. codes and other
laws of cyberspace) but not implemented. When companies like Google follow their core
principle not to influence any search results it can even be said that basic Human Rights are
not ensured.

3. Google and Corporate Responsibility

What does Google define as corporate responsibility and what instruments are used to
communicate it? To answer this question, it is useful to apply the three-step model to see
how the understanding of the game, the rules of the game and the actions within the game
are related to each other and finally forming Googles corporate responsibility. After that,
one can analyze the instruments, which Google uses to communicate this responsibility.
3.1 Understanding of the Game
Google has defined concrete common values that have to be shared by all employees and
board members. The central value is Dont be evil. These words reflect the approach of
Google to provide their users with unbiased access to information, focusing on their needs
and giving them the best products and services that they can. At the same time, these words
also mean to follow the law, act honorably and treat each other with respect.2
These common values and beliefs are based on so called ten things that Google has found
to be true. In detail these are:
- Focus on the user and all else will follow.
- It's best to do one thing really, really well.
- Fast is better than slow.
- Democracy on the web works.
- You don't need to be at your desk to need an answer.
- You can make money without doing evil.
- There's always more information out there.
- The need for information crosses all borders.
- You can be serious without a suit.
- Great just isn't good enough.3

2
3

cf http://investor.Google.com/conduct.html
cf. http://www.Google.com/intl/en/corporate/tenthings.html

3.2 Rules of the Game

Google formulated a code of conduct to put its values and beliefs into practice. The
company has the approach to include the highest possible standards of ethical business in
this code of conduct. The motivation for that is the belief, that only the highest standards help
the company to hire great people, who then build great products, which in turn attract loyal
users. That is also reflected in the statement Trust and mutual respect among employees
and users are the foundation for the success, and they are something we need to earn every
day. In detail the code of conduct consists of the following parts:
- Serve Our Users (e.g. integrity; privacy and freedom of expression etc.)
- Respect Each Other (e.g. equal opportunity employment; positive environment etc.)
- Avoid Conflicts of Interest (e.g. personal investments; gifts etc.)
- Preserve Confidentiality (e.g. confidential information; competitors etc.)
- Protect Google's Assets (e.g. intellectual property; company equipment etc.)
- Ensure Financial Integrity and Responsibility (e.g. spending Google's money;
signing a contract etc.)
- Obey the Law (e.g. trade controls; anti-bribery laws etc.) 4
Google expects all of its employees and board members to know and follow the code.
Google also created institutions to ensure the implementation of the code in day-to-day
business. That can be seen in the treatment of misbehaviour that can result in disciplinary
action, including termination of employment. Moreover, while the code is specifically written
for Google employees and Board members, Google expects contractors, consultants and
others who may be temporarily assigned to perform work or services for Google to follow
the code in connection with their work. Failure of a Google contractor or consultant or other
covered service provider to follow the Code can result in termination of their relationship with
Google. An internal department called Ethics & Compliance deals with questions and
implementation regarding the code of conduct.
Besides the institutions set up by Google and mentioned above, there are more natural
institutions that employees have to follow (e.g. law or regulations in countries where Google
has subsidiaries).
3.3 Actions within the Game
In terms of activities regarding corporate responsibility, one has to mention first Google.org.
Google.org was founded in 2004 to manage the activities of the non-profit organization The
Google Foundation as well as to create public awareness about several topics that are
linked indirectly with long-term profit generation. Google.org's five major initiatives,
announced in January 2008, are:
4

cf. http://investor.Google.com/conduct.html

- Develop Renewable Energy Cheaper Than Coal: create utility-scale electricity from
clean renewable energy sources that is cheaper than electricity produced from coal.
- Accelerate the Commercialization of Plug-In Vehicles (RechargeIT): seed
innovation, demonstrate technology, inform the debate, and stimulate market demand
to foster mass commercialization of plug-in vehicles.
- Predict and Prevent: identify "hot spots" and enable rapid response to emerging
threats, such as infectious disease and climate risk.
- Inform and Empower to Improve Public Services: use information to empower
citizens and communities, providers, and policymakers to improve the delivery of
essential public services (such as education, health, water and sanitation) in the
developing world.
- Fuel the Growth of Small and Medium-Sized Enterprises: increase the flow of risk
capital to small and medium-sized businesses in the developing world. 5
Besides those activities, that obviously are more long-term oriented, Google also invests in
conditions to foster social cooperation in day-to-day business. That is in particular reflected in
their efforts to bring the code of conduct into daily practice. By creating a company culture
that encourages employees to act according to the defined values, Google ensures
sustainability in its business. One example for investments in social cooperation is the
Googleplex. Googleplex is the headquarter of Google in Mountain View, CA. With this
investment, Google provides its employees free access to sports facilities and restaurants
as well as free laundry service. This working environment is highly appreciated by the
employees and benchmark for working conditions. In return, employees are working longer
and, more important, with a higher motivation. Google sees its employees as a valuable
asset and according to the company culture, all employees are equally important for the
success of the company. Everybody can and should share ideas and opinions. The example
how Google treats its own employees shows how sophisticated the activities are to turn the
ideas of corporate responsibility into daily life. Similar examples can also be found in
Googles relationship to other stakeholders like suppliers, educational institutions,
customers, media etc.
3.4 Used Instruments for Communication
When analyzing the instruments that Google is using to communicate its responsibility, it is
important to consider that there are two dimensions of communication: internal and external.

cf. www.Google.org

First, regarding internal communication, Google uses a variety of different instruments that
are also used by many other companies. As usual for IT companies, Google s main
instrument for internal communication is the intranet that shows all public content from its
website but additionally also internal information that is only dedicated to employees. Here
Google provides all relevant information regarding corporate responsibility. In contrast to
other companies, Google keeps important parts like the code of conduct very short and
understandable for everyone. Besides electronic media, Google also uses meetings as
instrument for two-way communication. These meeting are important to ensure the
information flow among employees and management. Meetings can be formal (so called
town meetings) or informal (e.g. during a sports session in own facilities). Furthermore
Google also uses classic instruments like blackboards to inform.
Second, regarding external communication, Google also uses the internet as main
instrument for communication. All information about corporate responsibility is available for
anyone outside of the company. Furthermore Google uses two-way communication
instruments externally. One example are events with educational institutions like universities,
where Google management and employees get in contact with students and faculty staff to
share ideas. However, Google uses also classic PR instruments for communicating about
its responsibility. Events for example are always flanked by press releases, interviews or
other offers for the press.
Summarized, Google uses a variety of different instruments to communicate about its
responsibility. However, also many other companies are using similar instruments. Why
Google seems more successful than others? The difference to Google is that other
companies often miss the opportunity to communicate their responsibility in the right way
and, very important, consistently.
But also Google has to face challenges with respect to the application of its values and
beliefs as it is stated in the next chapter.

4. Censorship
As on March 31st 2009 approximately 1.59 billion people are using the internet 6 to read the
news, blog, buy goods etc. or simply just to surf and in the processes they generate
terabytes of information. Googles mission is to organize this information and make it
universally accessible and useful. In accordance with this it is their commitment to maximise
access to information which is contrary to censorship. Censorship in Google s case is the
removal or omission of information from its services based on local government laws
regulations and the companys old policies.

http://www.internetworldstats.com/stats.htm

4.1 Dilemmas faced by Google

Censorship in China is one the biggest ethical dilemmas faced by Google.
(i) Google and China
Google first entered China in 2000 with a Chinese language version of its
homepage. The site was hosted in the United States and was therefore not subject to
Chinese laws. Search results were unfiltered and whenever users attempted to
access a banned website, Chinese filters blocked them. This strategy worked until
September 2002 when Google became inaccessible for two weeks following which
the service became slow, unreliable and often unavailable. In 2004 the company
showed the first steps towards a compromise with the Chinese government. On
Google News China, links that were blocked by the government were dropped from
the list. As the company began to lose market share, in January 2006 it announced
the creation of Google.cn based in China. Google however maintained Gmail (e-mail
services) and Blogger (personal web Blog hosting service) outside China and
continued

to

simultaneously

offer

the

slower

Google.com

in

Chinese.

Compliance with Chinese laws also proved tricky. Since Google could not display the
content of harmful websites, they did not post inaccessible links saying it would be
frustrating to users7. They also put a notification at the bottom of every page saying
In order to comply with local laws and regulations, some search results may not be
shown. Since the Chinese authorities did not provide a specific list of harmful
material, Google set up a computer in China and continuously conducted searches
to determine what was being blocked using the results as a basis for their censorship.
The decision of Google to enter the Chinese market in such a manner caused public
outcry. Organizations

like

Reporters Sans

Frontieres accused

Google of

hypocrisy8, whilst some bloggers called for a boycott of Google others referred to
the new service as Castrated Google . Further points of criticism were that Google
did not provide a list of websites that were delisted nor did it inform the websites
owners. Transparency and disclosure were inconsistent with Google s practices in
other countries. For example if a website was removed from search results due to
copyright violations in the U.S., a notification could be seen at the bottom of the page
informing the user that the site was removed from the list and a link was provided that
directed the user to the details of the legal request. It is important to note that Google
is not the only company to face opposition towards its operational policies in China;
Microsoft, Yahoo and CISCO have also been criticized for their actions.
7
8

http://www.darden.virginia.edu/corporate-ethics/pdf/Case_BRI-1005_Google _in_China_condensed.pdf
http://www.rsf.org/article.php3?id_article=16262

(ii) Censorship in other countries

Though there has never been much criticism about censorship in other countries
China is not the only country in which Google and others censor search results in
compliance with the laws of the country. Anti-semitic websites are banned in both
France and Germany. Censorship occurs in the United States as well; laws governing
personal information, activities of minor children, child pornography and gambling
affect the services of search engines.
4.2 Googles response to the dilemma
Now we will ask the 3 Heuristical questions to evaluate how Google responded to the
dilemma posed by the situation in China.
(i) What do we want? Moral Ideas
According to Elliot Schrage (Vice president global communications and public affairs,
Google) the corporate mantra Dont be Evil is an admonition that reminds us to
consider the moral and ethical implications of every single business decision we
make.9 In line with this on one hand Google wishes to provide their users with
unbiased access to information however on the other hand this also requires Google
to act honorably, treat others with respect and follow the law. Both these goals
however are not always compatible and sometimes involve a trade-off as was the
case with China.
(ii) What are our constraints? Empirical conditions
The exact nature of the circumstances is as follows. Since Google was unable to
provide quality services in China it was losing marking share. To do business in China
they would have to indulge in self censorship, a practice that was against their values
and commitment as a company. The other option was to continue to offer the old
services, a move that would have probably cost them the Chinese market.
It is also a fact that when Google blocked certain websites in other countries it did
not lead to public outcry since the content that was/is blocked is widely considered as
harmful to society. Given the scenario in China any form of censorship on Google s
part would be interpreted as against the interest of Chinese population and viewed as
Google going against everything it stands for.
(iii) What should we do? Ethical judgments
Though Google admits that filtering search results goes is inconsistent with its
mission, not providing services to one fifth of the worlds population would be a bigger
9

http://Googleblog.blogspot.com/2006/02/testimony-internet-in-china.html

failure of their corporate mission. In the words of Andrew McLaughlin (Google Inc)
we intend to provide the greatest access to the greatest amount of information to the
greatest number of Chinese Internet users10. The bigger picture the company says is
that the internet is transforming China for the better. Officials at Google also pointed
out that the website Google.cn was an additional service offered in China not a
replacement. Services such as Gmail and Blogger were not launched as personal
data stored would also be subject to Chinese laws. In addition to its commitments to
satisfy the interests of the users and to expand access to information Google
depended on a third commitment be responsive to local conditions.
4.3 Evaluation based on Golden Rule
The evaluation of Googles actions depends on how one views the conditions of social
cooperation for mutual advantage. By themselves both goals - to provide access to unbiased
information and following the law - are conditions of social cooperation for mutual advantage
however in this case one cannot be achieved without sacrificing the other. In the case of
censorship in Germany and France, since anti-Semitic content is widely accepted as harmful,
the law triumphed access to information. In China however Google seems to have caved
into the pressures of profit. However the questions here are - how does one decide on what
content is harmful and what is not? To what degree should such content be restricted? Or
should it be restricted at all?

5. Privacy
World leadership in a consumer oriented service industry brings with it a whole set of legal
and ethical responsibilities also, more so when the business requires dealing with the
consumers sensitive personal information. Due to its ever expanding portfolio of online
services and consequent exponential rise in the consumer reliance and trust on Google , it
finds itself in a position where it has been increasingly difficult for Google to satisfy the
demands of all stakeholders (creation of anti-Google groups such as www.google-watch.org
is an example). The stakes are even higher when a company openly proclaims its policy of
Dont be Evil and vows to do good things for the world at the cost of foregoing some short
term gains11.
5.1 Dilemmas faced by Google
The broader issue of privacy, in light of Google s various services, can be classified as
follows

10
11

http://Googleblog.blogspot.com/2006/02/human-rights-caucus-briefing.html
Google founders Larry Page and Sergey Brin in their Founders Letter during Googles IPO in 2004

10

(i) Collection and retention of user data

Google has a policy to collect user data such as search terms, URLs, IP address,
browser type, language etc. and store them on their servers in order to provide a
better user experience, including customizing content for the users12. It also states
that Google may collaborate with third parties to use such user data to provide
newer and better services. Google has been facing a lot of ire for allegedly
encroaching upon users privacy by putting their pictures and also those of their
homes on services like Google Street View, Google Maps, etc. without their explicit
consent. Finally, Googles business model is based on selling relevant contextual
advertisements, i.e. advertisement relevant to the content contained in users emails,
search results and other browsing patterns. In spite of Googles assurances that the
whole system is completely automated, keeping the data away from human scrutiny,
many people tend to fear a possible misuse of their sensitive information in the future.
A classic example is the AOL search data scandal, wherein the search engine AOL
released search patterns of over 650,000 users for research purposes, which was
later maliciously circulated over the internet and a lot of users could be personally
identified using the same13. This raises an ethical dilemma of conducting business in
a manner that could jeopardize the privacy/security of the consumer. Moreover,
Google does not mention how long it will retain user data, which many people fear is
infinitely14. Also there are apprehensions about who could be the third parties with
which Google may share the data and to what (harmful) extent it can be used to
customize their services.
(ii) Dealing with regulations that could compromise users privacy rights
This is a dilemma related to privacy which we will try to analyze. Since the late
1990s, US lawmakers were trying to bring a series of laws into effect, to regulate
internet pornography and one such law was Child Online Protection Act or COPA. It
was passed in 1998 with the objective of restricting access by minors to any material
defined as harmful to such minors on the internet. However, the act was struck down
being regarded as unconstitutional by violating the freedom of speech and has been
unenforced since 1999. In subsequent efforts to challenge the court orders, the
lawmakers subpoenaed Google, along with other search engines, asking them to
provide two months worth of user search queries and URLs reflecting the surfing
patterns of its users. Although Google admits that the data asked for by the
government was not enough to personally identify the users, it considered the act as
12

Google Privacy Overview - http://www.Google.com/intl/en/privacy_highlights.html

AOL Search Data Scandal - http://en.wikipedia.org/wiki/AOL_search_data_scandal
14
http://www.google-watch.org/bigbro.html
13

11

an attempt to breach the privacy of its users. This left the company in the dilemma to
choose between safeguarding its users privacy and complying with the law of the
land to restrict distribution of harmful content to minors.
5.2 Googles response to the dilemma
Now we will ask the 3 Heuristical questions to evaluate how Google responded to the
dilemma posed by the US government subpoena asking them to provide user data.
(i) What do we want? Moral Ideas
Google has a single minded mission to organize the world's information and make it
universally accessible and useful. And in order to achieve that mission, the company
has always proclaimed its user centric values and philosophy. At various occasions,
Google executives have stressed upon the companys commitment and wilful intent
to put the welfare of the society ahead of any financial gains. Their motto of Dont be
Evil is a testimony to this and the company strives to protect its users privacy and
ensure them security, using cutting edge technology and innovative business ideas.
(ii) What are our constraints? Empirical conditions
All of Googles actions must be under the prevailing regulations and with reference
to the COPA case, they had an obligation to fulfill governments demands15, subject to
their right to appeal for a judicial injunction. Under no circumstances, Google could
have afforded not to comply with the demands, had their judicial resistance not been
accepted by the court even if it meant dealing a serious blow to the trust of its
users. Moreover, a conflicting situational factor was that its users expected Google to
live up to its values and protect their data from being given away to government. As
mentioned earlier Googles policy to adhere to its Code of Conduct is a strong
prerequisite also.
(iii) What should we do? Ethical judgments
There was a clear conflict between the moral ideas of Google and the empirical
conditions, at least partly. Since compromising user privacy was completely against
Googles values, it successfully challenged the government subpoena in court16,
questioning the legitimacy of governments need to analyze user search queries. It
was a case of prioritizing its interests and Google defended that the negative
consequences of its compliance with the subpoena would outweigh the marginal
benefits that the government may derive, if any. Finally the court drastically reduced
15

US Governments subpoena to Google (PDF document) - http://www.google.com/press/images/subpoena_20060317.pdf

Court order on US Government subpoena to Google (PDF document) http://www.google.com/press/images/ruling_20060317.pdf
16

12

the subpoena to require only 50,000 URLs instead of the billions demanded and no
search query at all.
5.3 Evaluation based on Golden Rule
The easier and apparent choice of action in the abovementioned case, as also exercised by
all its competitors including Microsoft and Yahoo, would have been to accede to government
demands and provide all the required user data. But would such an action be a responsible
action, especially considering governments lack of explanation on the use of data and a
looming threat of potential misuse against Googles users or even its services? Google
chose to fight the system to uphold its values and respect the trust of the users and very well
considered not only the results, but also the future conditions their actions. We can conclude
by saying that Googles decision was an ethical decision which invested in the conditions of
trust, integrity and values which foster social cooperation for mutual advantage of both
Google and all its stakeholders in the long term.

6. Conclusion
After a thorough analysis of Googles corporate responsibility philosophy, what dilemmas it
faces in its day to day business, and how it deals with them, we can say that in spite of the
severe criticism in some situations, Google is doing a commendable job. Adherence to
diverse political, social, financial and technological compulsions makes it extremely difficult
for Google to be a moral idol for everyone and survive at the same time. However, in the
light of the abovementioned cases, it will be apt to say that Corporate Responsibility for
Google means neither Corporate Philanthropy (entirely) nor profit maximization. It is
making profits by investing in the conditions of social cooperation for a mutual advantage,
hence satisfying the Golden Rule.
6.1 Lessons Learnt
It might seem very natural and easy to implement Corporate Social Responsibility in a
business environment, but in their day to day operations, the global corporations of today are
confronted with several constraints (e.g. law) and conflicting interests, that make it difficult for
them to act consistently. Institutions play a vital role in influencing their actions, as companies
may have to prioritize and choose one out of several conflicting goals all of which may be
ethically justified. Finally, we must not only evaluate a companys actions through the lens of
moral ideas, but it is also equally important to consider the empirical conditions or the
situational factors within which they operate.

13