Central Issue:
Why did Google and China choose to negotiate a partnership, bearing in mind what was at stake and the difference in their individual objectives? Google would risk going against one of its principles (do not be evil), whereas China would need to rethink its censorship policy.
Recommended Course of Action:
Business institutions and states should look at the best option (negotiation) to ensure that they fulfill their needs as much as possible. Therefore, both parties should be ready to make compromises, but ensure that they do not end up on the losing end.
Basis for Recommendation:
I chose the arbitration option because both Google and China were bound to benefit greatly from associating with each other. For example, Google would expand its global market share and rip numerous financial advantages, enhance its performance and user experience. On the other hand, China would be at par with other advanced nations regarding technology, in particular, the United States and offer its people the best and latest technology (Brett & Grogan, 2006). This collaboration would further improve or help retain the technological talent and knowledge in the country and increase job opportunities for the citizens. Case in point, Google’s sites such as Google Scholar are vital for the Chinese as they offer them access to a rich collection of academic material. Additionally, I believe that the Google and China partnership would be essential in that Google would offer Baidu a healthy competition. This contest would, in turn, eliminate monopoly and ensure that both companies (Google and Baidu) would strive to provide the best services for the Chinese people. Alternatively, a concession between Google and China will allow the Chinese administration to strike a balance between economic development and political stability.
Reasonable Alternatives:
A substitute option for Google was to continue with its offshore operations. This choice would ensure that Google maintains its policies and avoids limitations from the strict Chinese regulations. Nonetheless, this route would not be viable because Google would restrict its performance and customer experience. Case in point, Google users would have to endure slow services as the Chinese “Great Firewall” had to scan their search results before they could access them.
Gain a majority stake in Baidu. Google could choose this alternative to ensure that it meets China’s internet regulations while maintaining its integrity and an uncensored site. However, the downside would be slow access to the website, poor customer service and consequently, a reduction in market share. Also, Google would be under the Chinese government’s watch, and thus, it would be difficult for the company to operate according to its policies.
Maintain its internet regulation. The Chinese government could choose to continue with its censorship of websites to ensure that all firms in the country comply with the laws and regulations. By upholding internet censorship, the Chinese government would have significant control over the web, counter any form of political opposition and eliminate negative information in the public. Also, China would maintain its position as an independent nation in the global market. Nevertheless, China would risk staying behind with regards to technology, have insufficient technological talent and knowledge, in addition to lacking enough employment opportunities.
Keep Baidu as the country’s sole search engine. This alternative could ensure that the Chinese government enhances the growth of a local company and can easily keep regulating it. However, ignoring the input of a firm such as Google would hurt China’s international image and reduce employment rates, among other negative implications.
Significant Factors:
The Role of the Government
Investor Confidence
Ethics
Reputation
The Value of Relationships
Globalization
Profits
Urgency
Discussion:
The Role of the Government
The Chinese government’s position in the country had a significant influence in the Google and China negotiations. The Chinese government regulates the Internet since it aims to eliminate political opposition and control the existing forms of media (Brett & Grogan, 2006). Therefore, it was necessary for the Google team to lay its negotiation plans while bearing in mind critical aspects such as the Chinese censorship policy and Great Firewall of China. Google had to compromise some of its policies that may have affected China’s regulations to arrive at an understanding with the Chinese government. Also, the Chinese government has significant control over the nation’s business sector. For example, the regime regulates foreign corporations in China by limiting Chinese companies’ stakes that they can own. Consequently, Google could only resort to negotiations as it was in no capacity to acquire the right amount of stakes in Baidu.
Investor Confidence
Investor confidence was a key factor in the Google and China negotiations because of the high potential that China has as one of the top economies in the world. Even though Google had a small presence in the Chinese market and was aware of China’s regulations and other limiting elements, the firm was willing to compromise because of what it anticipated from the country. On the other hand, China also expected some investment benefits from Google’s entry into its market. For example, China was to take advantage of advanced technology, increased job opportunities and high revenues and reputation in the international scene (Lee, Liu & Li, 2013).
Ethics
Ethical issues also had a pivotal role in the mediations between Google and China. For example, Google had to create a balance between its business interests and moral responsibilities if it were to enter the Chinese industry. Equilibrium was vital for Google since its “do not be evil” dogma could prove to be a challenge as investors anticipated profits. The Chinese government required Google to censor some material, which was against Google’s two major philosophies (“do not be evil and provide the world’s information”). Such a move by Google could lead to a backlash from the public or critics and consequently, have an adverse impact on its corporate goals. Google’s culture is more about ethics rather than making profits, and thus the firm had to uphold its business ethics policy to ensure future growth (Worthen, 2010). On the other hand, it was necessary for Google to keep in mind the Chinese standards and how the country applied them in doing business (Baker & Tang, 2012).
Reputation
Both China and Google entered into talks so as to maintain or improve their status within the global society. Case in point, Google aimed to set base in China and begin offering its services in the country to prove its value. Unlike in other regions, Google had no significant influence in China and thus wanted to commence its operations in the country and build its Chinese brand. On another hand, the Chinese government wanted to improve the country’s face in the global society by allowing Google (a world-renowned) to begin its operations (Brett & Grogan, 2006).
The Value of Relationships
Another important thing that facilitated the negotiations between Google and China was the importance of forming a relationship. Google, in particular, had to establish a close bond with China to tap the country’s potential. A good correlation was one of the crucial elements that could enable Google to penetrate the Chinese market and showcase its products to the citizens.
Despite China’s censorship not conforming to Google’s culture, policies and goals, associating with the Chinese government could enhance the lives of many people by providing them with more opportunities. Additionally, both Google and China aimed to benefit from their relationship through sharing knowledge and experiences, forming long-term partnerships and assisting each other in technology and talent development. This mutual collaboration could help both parties advance research in critical areas such as browsing speed, performance, and quality (Brett & Grogan, 2006).
Globalization
Globalization enabled the Google and China collaboration because it has transformed how firms carry out business activities. Google had to change its operations in China because of the divergence effect of globalization, that is, organizations have to undertake different tasks according to the diverse global cultures. Therefore, Google had to make its practices unique to the Chinese culture to ensure its success in the advancing era of globalization. Alternatively, globalization shaped the deal between Google and China as it created different ideas of ethics between the two parties. Therefore, Google had to make some compromises so as to deal with the differing values from China as its partner. However, with such allowances, globalization may have put Google in a challenging position, where the company could receive criticism from stakeholders or the public for not abiding by its code of ethics (Baker & Tang, 2012).
Profits
Google and China aimed to work together because both focused on profit. That is, Google was interested in capturing the Chinese market, sell its products and generate some revenue. Google was aware of Baidu, its Chinese equivalent, but wanted to displace the firm and take the lion share of the local market. Moreover, China also wanted to make an economic and technological gain in its different sectors. For example, the Chinese government’s primary purpose of wanting to collaborate with Google was to retain its crucial technology experts within the country, who would then help the nation advance its economic and innovation efforts (Lee, Liu & Li, 2013).
Urgency
The China and Google negotiations were underway because of the necessity of both parties to achieve their goals through the partnership. Nonetheless, it was more critical for Google to work with China than it was for the Chinese government to collaborate with the Internet firm. This difference arose because China had more restrictions than Google. For example, the Chinese government insisted that Google had to abide by its censorship policy and focused on maintaining its political stability. Additionally, China had alternative companies to work with such as Yahoo, MSN and its very own, Baidu, and thus it did not regard the negotiation as so important. Google needed this collaboration more than China because it was necessary for it to gain the Chinese market fast or risk losing it to other firms. The main urgency for China was to create jobs for its citizens, enhance the economy and keep up with technology (Brett & Grogan, 2006).
References
Baker, J. S., & Tang, L. (2012). Google’s Dilemma in China. Case Studies inOrganizational Communication: Ethical Perspectives and Practices: Ethical Perspectives and Practices, 285-294.
Brett, J., & Grogan, C. D. (2006). Google and the Government of China: A Case Study in Cross-Cultural Negotiations. Evanston: Kellogg School of Management.
Lee, J.-A., Liu, C.-Y., & Li, W. (2013). Searching for Internet freedom in China: A case study on Google's China experience. Cardozo Arts & Entertainment Law Journal, 405-434.
Worthen, B. (2010, March 12). Soviet-Born Brin Has Shaped Google's Stand on China. Retrieved from The Wall Street Journal: http://www.wsj.com/articles/SB10001424052748703447104575118092158730502
