GOOGLE IN CHINA

Page 154 Case Study 1-3

September 3, 2011

IBA 301.90 Principles of International Business

Chad Heidorn

What Philosophical principle did Google’s manager’s adopt when deciding that the benefits of operating in China outweighed the costs? When google managers decided that benefits of operating outweighed the costs they adopted a utilitarian approach. According to Utilitarian and Kantian ethics, “Most moral philosophers see value in Utilitarian and Kantian approaches to business ethics” ( Hill, 2011, p. 138). Even though Google was blocked by the Chinese authorities in 2002, users were directed to a Chinese rival and Google realized the potential of benefits it would get out of being in China. Google was to provide all information via the internet, but the chinese government was proactive censoring the information. China has a large potential internet market where Google can make a great number of profits. It was also wise for Google to give the Chinese users access to a limited amount of information, then to none at all. There was two choices to choose from, it could continue operations from the USA and not have the proper equipment needed, or open a operation in China, impose self censorship and give limited information to its users.

Do you think that Google should have entered China and engaged in self-censorship, given the company’s long standing mantra “Don’t be evil”? Is it better to engage in self-censorship than have the government censor for you?
I do believe personally that Google did the right thing by entering China, but Google should have made a deal with the Chinese government and not have a censorship regulations. Their mantra says it all, “Don’t be evil”. By living through their mantra it tells us to let China use their search engine, and let it be useful to them as it is to the USA. Even though engaged in self-censorship, “ the Chinese government has essentially erected a giant firewall between the internet in China and the rest of the world, allowing its censors to block sites outside of China that are deemed subversive” ( Hill, 2011, p. 154). It is always better to insert self-censorship than to have someone censor it for you. The government should only be applying censorship if its considered national security or going to attack the country.

If all foreign search engine companies declined to invest directly in China due to concerns over censorship, what do you think the results would be? Who would benefit most from this action? Who would lose the most?
If all foreign search engine companies declined to invest in China due to censorship, the company that would benefit is the homegrown company, Baidu. Baidu “ leads the market for internet search in China, which in 2006 it had the 40% of the market for search in China compared to Google’s 30% share” ( Hill, 2011, p. 154). Companies like Yahoo, Bling and Google would loose out the most, each company would loose revenue. These companies also would not be able to grow over seas, as other countries might have the same censorship. The Chinese would also not benefit from this, as they would have access to limited information. Staying in China would help China boost economic growth and raise living standards. All search engines benefit from being in China.

CITATION:
Hill, C.W.L (2011). International Business. New York: The McGraw-Hill Companies, Inc.