Google in China:Kirsten E. Martin, “Google, Inc., in China,”

Business Roundtable Institute for Corporate Ethics, Case BRI-1004

Abby SalisuDaniel Pedreira

Heather Gray

PUBP 502, Section 001 with Professor Audrey Kurth CroninApril 29, 2013

Google in China

Google in ChinaPresentation 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

History and Case Overview

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 EthosRevenueIn 2005 – cash flow of $3.45 billionIn 2006 – generated more than $1 billion

every quarterRevenue of $6.14 billion and a net profit

margin of 25.18%In 2012 – revenue hits $50 billion*Google’s Global and Expanding PresenceUnited 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 EthosGoogle’s Global and Expanding Presence*

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

China – Human Rights & State Censorship of InternetTom MacLeanHistory of Human Rights Abuses in ChinaChinese Monitoring and Enforcement

Restrictions Chinese internet was controlled by

governmental censorship and self-censorshipMonitored foreign internet trafficGovernment law enforcement by employing internet police

State Department

Chinese MarketWhy pursue?Emerging MarketChina Committed to Economic Reform and Interest

in World MarketStrong Economy, Great for BusinessCompetition (Baidu, Yahoo!, Microsoft, etc.)Google.cn and DisclaimerCongressional Testimony

Hearing before the House Committee on International Relations Subcommittee on Asia and the Pacific (Elliott Schrage)

Google’s Conundrum and Decision

Google’s OptionsOption #1 – Enter ChinaPros: 457 million Internet users* = an open

and growing market for increased revenueInternet 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 OptionsOption #2 – Forgo ChinaPros: Many in the west would be pleased that Google

chose principle over profitAddresses 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 GoogleDoubt 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 OptionsOption #3 – Relocate to Hong KongPros: Google will be able to profit from the

HK market Censorship-freeCons: 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/

OutcomeToday, Google has three offices in China and

one in Hong KongGoogle 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?

Analysis and Relevance

Corporate Ethics, Public Policy and Decision-makingDistinction between public and private

morality and gray areaTaking Your Ethical Code to China“Don’t Be Evil” MissionMethods 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.

Corporate Ethics, Public Policy and Decision-making

Globalization, Nation-State and the Market StateThe Challenge for MNCsLessons Learned for CSR?Bobbit Chapter 10, The Market-State

Transnational world marketInformation standardGlobal communications networkPropaganda 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 IssuesContinued Drama between Google and ChinaAndroidChina (Baidu) in U.S. (Silicon Valley)No Google?

Wrap Up – Questions?

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