Statistics show that in January 2017 the number of internet users in China increased to 731 million. This unique reality shows that the China market has risen to as large as the population of Ukraine for Internet users and service providers (www.scmp.com, 2017). Any internet service provider can see this as an opportunity to expand from a financial perspective. Similar to all of its rivals, Google also considered China’s economy as appealing. Before Google, Yahoo China and Microsoft were also in China. They had a market share in China already. Google’s search engine had to be operated from within China. The reason was that Google’s international website of google.com had to go through the “Great China Firewall” before it can provide any service to its users. Thereby, Google entered Chinese market in 2006 by launching Google.cn. Before signing the contract as a service provider, Google.cn had to consider the local conditions of China. Chinese communist government had the rules and regulations in place that required the internet service providers to censor few subjects. These subjects had political, social and religious issues that the Chinese government did not wanted its citizens to breach. Political search names included ‘Tibet’ and ‘democracy’. Religious issues included ‘Falun Gong’ and “Dalai Lama” while social subjects like ‘Pornography’ were banned from the Chinese websites.
China government called for the foreign companies to self-censor its content for the Chinese internet users. On the other hand, it was Google’s policy to make information universally and readily available to its users. This company does not even make ethical compromises in terms of information search. Thereby, when it entered China it had to ban certain websites according to the Chinese regulations.
China has been very strict with its regulations as well. Its censorship mechanism provides a constant threat to the violators of its laws. The government had created fear in the hearts of its dissidents and service providers. Google’s market share had been decreasing ever since Baidoo.com was launched in China. Continuous rise of Baidoo.com has been subject to political interests from the Chinese government. That is why; the market share leader of search engine in China is Baidoo.com which is standing at 80% market with respect to the advertising revenues. On the other hand, in 2015 Google’s stood at 9.2% in terms of China’s search engine market share by advertising revenue (Incitez, 2016).
In 2006, when Google.cn was launched, it notified its users when they used censored keywords. This was unaccepted by the Chinese government. They again banned Google from operating and gave them numerous threats. Google had to affirm to the Chinese government’s ‘great China firewall’ policy and it stopped notifying its users about the censored words (Reporter, 2013).
Again in 2010, Google faced cyberattacks within China and it was named Aurora Attack. This forced Google to reconsider its existence in this country. Instead goolge.cn was routed towards google.com.hk. That is; it started operating from Hong Kong which had less number of restriction on Google.com (Fannin & Fannin, 2010)
In 2013, Google again realized that the number of internet users of China is as big as the population of some countries. Thereby, it again initiated to do business with China and launched google.cn for the sake of its shareholders (Waddell, 2016).
What are the ethical issues involved? Why?
China’s communist national laws had opened international trade only to do business with foreign companies. But, they have a culture to censor specific subjects that can disrupt the peace of China. As a result, there has always been a conflict in the national laws and corporate values of the foreign firms. Similarly, when Google.cn was launched in 2006, it had to compromise on its values to universalize information for everyone in the world. This compromise entailed ethical issues that the Chinese government violated. In the eyes of the human international laws and rights, everyone has the right to access information. Moreover, another ethical issue came with respect to user privacy and personal information. In United states, corporation are not allowed to provide personal data of its user to anyone(Heineman, 2010). Recently, Yahoo China breached the privacy of its users by handing over its mailing information to the Chinese government. In addition, Microsoft had to shut down the blog site of a popular Chinese politician in accordance to the pressure from the Chinese government. The national culture of Chinese government breaches the policy of trust, security, privacy and freedom of speech. It also requires its foreign companies to follow the same suit so that their remains a situation of peace in their region.
Who are the stakeholders, primary and peripheral? How are they affected?
The stakeholders of Google incorporation involve shareholders, customers, creditors, employees and suppliers. The primary stakeholders are the shareholders, customers, employees, creditors and suppliers. Periphery stakeholders for Google are activist groups such as religious organizations, community activist and cause supporters.
If Google changes its mind to not to do business in China, then shareholders will be directly affected. The market for China holds one seventh of the world population. Thereby, not expanding its business in this region will result in loss of financial gains and growth opportunities. This means that the share value of Google Global will remain stagnant or will not grow as much as it competitors working in China.
Google’s customers are the internet users of China. It’s willingness to self-censor its website can breach the human rights of its customers to have ready access to information. Also, if Google hands over personal information of its customers, than it will create a relationship of mistrust among its service users. Creditors will be concerned about the expansion and profitability of Google’s presence in China. If Google.cn decides to violate censorship laws of China, creditor’s opinion will also be considered as they are providing finances to the organization. Moreover, creditors need to keep a keen eye on Google’s adherence to Chinese laws.
The peripheral stakeholders are not directly affected by Google’s doings. The religious groups and activist will not be concerned by Google’s action. However, they will only be concerned when Google negotiates to keep its information channel unfiltered from the residents of China.
What possible alternatives/solutions are available to address the issue(s)?
Google’s goals and objectives needed to be revised to merge with the regulations of the Chinese government. The first two objectives of Google dealt with everyone that is whether it operated in china or in any international region. The first objective of Google was its business commitment to satisfy the interest of its users. It wants to create a high quality user experience. The second objective of the company revolved around expanding access to information to anyone. This information will make the world a better place by giving them the freedom to be more informed and freer in their choices. The third objective of Google was to abide to the local conditions in China. The ethical dilemma created by the third objective called for Google to compromise on ethical grounds for the sake of financial gain. The solution of Google’s activity in China was either to accept censorship law that was firmly applied by the Chinese government or to stay away from the communist and ever-growing economy.
Another alternative that Google has is to use the art of negotiation. Google wanted to be a leader of search engine in China and to develop a status were it can exert pressure on Chinese government to make its information available unfiltered to its users.
However, this solution cannot be abided due to the presence of its competitors and rising market share of the Chinese parent search engine; Baidoo.com (Contributor, 2016).
Another, solution that Google can do is to gather all the foreign search engines and exert pressure on the Chinese ISP (Internet Service Provider) market to remain uncensored. However, this will again create no such pressure on the Chinese government as this will only make them suspended from the Chinese economy. The Chinese government has been doing this from a long time. In order to make its censor board successful, the government has created its own application that is similar to the attributes of Youtube, Google, whatsapp and Facebook. These applications do not violate the strict laws of China and maintains the fear of censored subjects among the internet users. As well as, these local applications provide tough competition to foreign companies that want to have a piece of pie from the Chinese economy (Zhang, Chen, & Liu, 2016). Therefore, Chinese government has remained in control of the flow of information and adheres to the culture of conformity.
Another solution for Google is to increase its presence in China. For instance it can delve into merger and acquisition of local companies that have high internet traffic. This particular strategy will help Google to increase its footprints in Chinese internet (Wittaker, 2012).
What is the solution of your choice? Why?
Since the advent of Google incorporation, it has witnessed immense growth so much so that it has become a world leader in the search engine market. All of this has been due to its commitment to satisfy the interests of its users and making information readily available. These two objectives have been the success factors of this company from the very beginning. In my opinion, if Google is not allowed by the Chinese government to provide the same level of commitment in the form of user satisfaction and information availability then it should not continue to operate in China (Waddell, 2016).
Google does not only have to self-censor its information but it will also have to provide private date and personal information of its users to the Chinese government. The user relationship that Google has developed over a period of time has been due to the level of trust that its customers can have with the company. Without such rights, the customers will be unwilling to use this search engine as it will breach their privacy, security and the right of freedom of speech.
Similarly, being unpopular in the eyes of the customers and breaching ethical values of human being will not make this organization to flounder in the long run. Instead, shareholders will divest in this company as it will be subjected to multiple cases that can inhibit its growth in the future.
Similarly, creditors will not be willing to extend their finances for its expansion in other operations. Creditors will only be willing to support the cause of the company it doesn’t ignite anger in its customers and keeps them happy and satisfied (Meyer, 2016).
If google continues its operations in China, it will mean that it does not only violate its existential values but the deeper values of its stakeholders as well.
How would you support your choice with the various theories learnt earlier?
This case can be judged from both teleological and deontological ethical perspective. Judging from teleological imperative, utilitarianism theory holds that can an action can be done only when the consequence of that action results in greater pleasure than pain. In order to assess the level of pleasure and pain, one can also do cost-benefit analysis of his/her actions. In the context of the Google’s decision to do business, it can also be viewed from the cost-benefit analysis. As the market for China is growing at a rising speed, it holds financial growth for the company. Thereby making the entire shareholder happy for the company’s growth in China. However, the costs of doing business in China will mean that it has to revisit its company objectives. Another cost that is involved is getting a negative image in the international arena due to signing a contract with Chinese government for breaching user privacy and personal information. if the benefit of doing business in China is more profitable in the form of providing higher quality user experience, then Google’s right to do business in China is acceptable on Ethical grounds. The utilitarian theory supports the ethical violations of Google as it calculates that can provide more pleasure than pain to its stakeholders (Sun, Liu, Peng, Dong, & Barnes, 2014).
From a deontological perspective, Google’s act to continue its operation in China is not ethically correct. According to categorical imperative, the rights of human beings remain unaffected by their consequences of more pleasure and less pain. According to Kantian theory, the human rights to all information should be accepted under all circumstances. That is, the first two objectives of Google should be tailored for the Chinese economy as every human has the right to information that is available in the market. Moreover, with respect to privacy, the virtue of the personal data is a right of every single human being whether he is a Chinese or not. Revealing personal information is by all means ethically unacceptable by Kantian theorists.
This case study provides the practical application of deontological perspective of ethical theory. On the same grounds of Kantian theory, United Nations also says that Google should not revisit its objectives for the sake of its operations in China (Gan, 2017).
Kantian theory is more importantly the reminder of duty of Google towards its users. The theory affirms that that it is the responsibility of Google to provide unfiltered information to its customers so that their freedom to information cannot be affected (Follesdal & Maliks, 2013).
Even though Google’s unwillingness to censor information will result in more costs than benefits but it will be in accordance with the universal rights of an individual. Similarly, not expanding in China will mean loss of growth and financial benefits that Google can enjoy. As well as Google will also deal with the anger and loss in revenue from its shareholders, but over the period of long run, Google will remain to create an positive image among its internet users. These users will be satisfied with the policy that their privacy is remained intact with Google and the can use freedom of speech to express their opinions in the future regarding any political, economic, religious or social issue.
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Follesdal, A., & Maliks, R. (2013). Kantian Theory and Human Rights. Routledge.
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Waddell, K. (2016, January 19). Why Google Quit China—and Why It’s Heading Back. The Atlantic. Retrieved from https://www.theatlantic.com/technology/archive/2016/01/why-google-quit-china-and-why-its-heading-back/424482/
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