Abby Salisu
Daniel Pedreira
Heather Gray
PUBP 502, Section 001 with Professor Audrey Kurth Cronin
April 29, 2013

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Presentation Agenda
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History and Case Overview
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About Google and its Corporate Ethos
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China – Human Rights and Censorship
Decision to Pursue Chinese Market
Google’s Conundrum and Decision
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Options
Outcome
Analysis and Relevance
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Corporate Ethics, Public Policy and Decision-making
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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

 “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

Revenue
 In 2005 – cash flow of $3.45 billion
 In 2006 – generated more than $1 billion every quarter
 Revenue of $6.14 billion and a net profit margin of
25.18%
 In 2012 – revenue hits $50 billion*
Google’s Global and Expanding Presence
 United 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’s Global and Expanding Presence*
* http://www.google.com/about/company/facts/locations /

China – Human Rights & State
Censorship of Internet
 Tom MacLean
 History of Human Rights Abuses in China
 Chinese Monitoring and Enforcement
 Restrictions
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Chinese internet was controlled by governmental censorship and self-censorship
Monitored foreign internet traffic
 Government law enforcement by employing internet police
 State Department

Why pursue?
 Emerging Market
 China Committed to Economic Reform and Interest in
World Market
 Strong Economy, Great for Business
 Competition (Baidu, Yahoo!, Microsoft, etc.)
 Google.cn and Disclaimer
 Congressional Testimony
 Hearing before the House Committee on International
Relations Subcommittee on Asia and the Pacific (Elliott
Schrage)

Google’s Conundrum and Decision

 Option #1 – Enter China
 Pros: 457 million Internet users* = an open and growing market for increased revenue
 Internet 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/

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Option #2 – Forgo China
Pros: Many in the west would be pleased that Google chose principle over profit
Addresses 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 Google
Doubt 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/

 Option #3 – Relocate to Hong Kong
 Pros: Google will be able to profit from the HK market
 Censorship-free
 Cons: 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/

 Today, Google has three offices in China and one in
Hong Kong
 Google 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?

Corporate Ethics, Public Policy and
Decision-making
 Distinction between public and private morality and gray area
 Taking Your Ethical Code to China
 “Don’t Be Evil” Mission
 Methods 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 State
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The Challenge for MNCs
Lessons Learned for CSR?
Bobbit Chapter 10, The Market-State
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Transnational world market
Information standard
Global communications network
Propaganda 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.

 Continued Drama between Google and China
 Android
 China (Baidu) in U.S. (Silicon Valley)
 No Google?

Google in China –Additional
Reading
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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