Problem: Address the following topics:
1. Describe the legal, cultural, and ethical challenges that confront the global business presented in this case study.
2. Determine the various roles that host governments played in this particular global business operation.
3. Summarize the strategic and operational challenges facing global managers illustrated in your selected case.
Case Study: Google in China
Google established a universally accessible and useful search engine operating with the mantra, "Don't be evil!" This meant that Google should never compromise the integrity of its search results. For example: Google decided not to let commerical considerations bias its ranking. This mantra has become a central organizing principle of the company.
Google's mission and mantra raised hopes that the search engine would be a tool for circumventing government censorship, democratizing info, and allowing people in heavily censored socities to gain access to info that their governments were trying to supress, including China.
Google began a Chinese language service in 2000, with operations in the U.S. Chinese authorities blocked the site. Users were directed to a Chinese rival. Google's managers ordered dozens of books on China in order to understand the country. Two weeks later, for unclear reasons, Google's service was restored. Google had changed nothing about their service but Chinese users could not access politically sensitive sites, proving that the government was censoring more aggressively.
In 2004, Google understood China was a strategically important market. To exploit the opportunities China had to offer, the company realized it would have to establish operations in China, including its own computer serves and a Chinese home page. Serving Chinese users from the U.S was too slow and the service was degraded by censorship.
Once China operations were established Google would be subject to Chinese regulations including censoring info. For 18 months managers debated the pros and cons of entering China directly as opposed to serving the market from the U.S site. Ultimately they decided to set up in China. China promised to be become the largest internet market in the world and a major advertising resource for Google. Competitors, Yahoo, and MSN had already established operations in China.
In 2005, Google established a direct sales presence in China. In 2006, Google started its Chinese home page, maintained by chinese employees in Beijing and Shanghai. Google's objective was to give Chinese users, "the greatest amount of info possible." which was not the same as access to all info.
Google had decided to engage in self-censorship, excluding results on politically sensitive topics as Democratic reform, Taiwanese independence, the banned Falun Gong movement, and references to the notorious Tiananmen Square massacre of democratic protestors that occured in 1989. Human rights activists protested, arguing that Google abandoned principles in order to gain profits. Google claimed it was better to give users access to limited info rather than none at all or to serve the market from the U.S. and allow the goverment to continue censoring search results.