Google operating in China analysis

Critically evaluate the quarrels for and against Google operating in China from a company perspective.

Critically evaluate the arguments for and against Yahoo operating in China from an ethical perspective.

Do you think Yahoo was right to withdraw from mainland China in March 2010? Give reasons predicated on your own unbiased research.

Critically evaluate the quarrels for and against Google operating in China from a small business perspective.

One of the most significant developments over the past sixty years has been the internationalisation and globalisation of business, where operations to increase involvement in international operations go together with an approach that actively looks for homogeneity in products, markets and image. This development has changed the type of competition in a global size. In Google's circumstance, whilst since 2000 it had offered a Chinese language version, Chinese users found this service to be poor and unreliable, leading to Google shedding market share, particularly to the Chinese language organization Baidu. Hence the management decision in 2005 to enter in this market segment.

As an internationally leading provider of internet products and services, Google management would have completed a SWOT analysis to ensure market penetration in China would be possible. Detailed below is a SWOT research for Google's designed business venture in China.



Global brand image

Financially robust

Trying to please shareholders and Human being Rights supporters but ending up pleasing no-one.

Politically naive when coping with Chinese routine.

Damage to brand image.



Growth in new market.

Local competition

Uneasy collaboration with Chinese administration who have the power to refuse operating licience.


Increase Market Share. By 2005, Google's market show in China was shrinking, specifically with regards to local, Beijing-based rival Baidu. To change this trend, Yahoo would need to commit fully to the ever extending internet market in China.

Increase in Income. Earnings from internet market on-line advertising probable was a critical factor in deciding to permeate the Chinese language market. By 2005, there were 103 million internet surfers in China compared to 154 million in the USA. (pg 471:12) Cheng (2010) states that China offers Yahoo and its competitors the opportunity to tap into market with 350 million users.

Demographics. Market research indicated Chinese language users to be well educated, young and socially aware. To promoters, this would give a wealth of untapped potential.

Opportunities. Opportunity to increase product positioning within an extending market by teaming up with local cellular phone carrier, government owned China Mobile. The number of mobile phone in use was projected to expand by around 57 million yearly. (Duke pg 6)

Satisfy Shareholder. Market Show. Increased income from expanded market share would be beneficial in increasing shareholder success. With the united states achieving saturation point, entering the Chinese market would maintain collection with the tactical aims of Google by using international development to improve growth.

Brand Understanding. Increased brand consciousness through offering dedicated Chinese services to wider market portion aimed at bringing in all degrees of culture. Current off-shore established services had been mainly utilised by British speaking elite.

Market Segmentation. With an total annual earnings of $6. 1 billion, Google were known as the world's premier search on the internet services provider. In order to increase market portion, fully stepping into and expanding the untapped potential of the China market was the most reasonable choice.

Brand Image. Chinese language government wanted to be seen as in partnership with an international brand leader. This might facilitate obtaining relevant permits and licences making the operational set up process smoother and trouble free.

Quality of Service. Offering an off-shore based Chinese language service since 2000, Google's Andrew McGlaughlin proved the service was poor and not something these were proud of. Getting into the China market straight, would improve user experience, enhance service levels and increase overall dependability and remove a few of the problems generated by the great firewall of China censorship. (pg 467 no 2)

Market Research. In comparison to local providers, general market trends indicated the Chinese language market viewed Google as a distant and foreign competitor. Establishing Yahoo. cn locally would bring the product directly to the consumer.


Competition in China. Local competition from already proven providers. In particular, Baidue, who are purported to have strong unofficial ties and impact with the Chinese language government. This might hinder market penetration and gradual profit returns.

Global Competitors. International competition from already established opponents, Yahoo and Microsoft who had teamed up local Chinese language partners to increase their own market penetration.

Brand Image. Damage to brand by dealing with and being seen to adhere to authoritarian plan censorship demands coupled with human rights implications. This might adversely affect business opportunities and potential for profit as others and market providers may wish to distance themselves from Yahoo. The case for his discussion can be justified as a direct effect of the Shi Tao and Zhao Jing incidents impacting Yahoo and Microsoft. (475)

Start up Costs. Any new project would incur create costs including infrastructure, staff, operating costs. Setting up in China posed particular problems which Google planned to offset by employing key control specialist (headed up by Kai-Fu Lee) and locally recruited employees to give Google. cn as much of a Chinese flavour as it can be.

Local Legislation. Conformity with local censorship regulations would still have an impact on user searches for sensitive topics. Internal location of the company would not offset routine censorship and firewall issues.

Choice of services. Yahoo is currently more than a search engine provider, yet no entertainment company or a portal offering its content unlike its local rival, Baidu, who offered a complete range of services that included entertainment. In addition to being unable to be competitive directly using its competitors, Yahoo would absolutely need to restrict those features and products it could offer, such as G-mail and blogger, to avoid reducing Chinese language dissidents and Human being Rights activists.

Cultural difference. Cheng (2010) feedback on Google's open up obstacle to China's rulers and shows the value of cultural understanding when executing business overseas and cites Albert Louie, managing partner of Beijing-and Hong Kong-based A. Louie & Affiliates, a company that helps multinationals manage turmoil and risk in China, who explained that Google's activities did not represent business routines in China and it would have been better for the business to conduct discussions for a fair settlement by way of a third part like former President Expenses Clinton and previous U. S. Secretary of Condition Henry Kissinger who were friends of China.

Critically measure the quarrels for and against Google operating in China from an ethical perspective.

Organisations are actually required to look at the full scope with their impact on neighborhoods and the environments in which they work, balancing the needs of stakeholders with the need to make money. Although there is no person size works with all strategy, well managed programmes have universal benefits. Google's appears to have a Utilitarian (for the reason that Utilitarianism maximises the best good for the best number of people) rather than Moral Formalist philosophy. That is enshrined in their quest statement, "to arrange the world's information and make it universally accessible and useful". However, the China marketing decision seems to have suborned this idea updating it with a far more Ethical Formalist philosophy whereby in return for market access, Yahoo will adhere to local Chinese laws and their recognized universal prescription as described by the Communist government.

Detailed here are the relevant quarrels that critically examine for and against Google's Chinese language operation.

Case For

Increased personal choice allows better flexibility of information by offering users a recognised ethical global brand instead of local providers with strong but unofficial ties to the communist routine (Baidu. com).

Promote company objective and ethical ideals by producing relevant company ethos and work practices within locally utilized labour force. This fits in to Kotler and Lee (2005) who state that important moral issues can relate with the office, labour, community development and Human being Rights.

Promote Beneficial Influences. Work to inculcate Yahoo philosophy and moral values into Chinese language society all together through the get spread around of business associates, consumer experience and wider usage of internet based media, blogs and information cites.

Offer ethically personalized services and products to meet Chinese language users' needs that worked well effectively within locally enforced limitations and limitations by Chinese federal. Google deliberately chose never to offer Gmail and Blogger to avoid human protection under the law and level of privacy concerns elevated by Chinese federal inspection of dissidents.

Access to information. Take part in increasing internet use across all communal levels of Chinese society to fill the info void in China created by state controlled media in so doing fulfilling its do it yourself declared quest and beliefs of providing unbiased, correct and free access to information for those who count on us surrounding the world. . . . . . providing our customers is at the center of what we do. (pg 469 - circumstance study

Some is better than none. Limited access to the world's information would be good for the Chinese language people somewhat than no access by any means. Brin (Night out) stated "a very important factor we realize, is that folks can make smarter decisions with better information".

Case Against

Public Pledge. Google can be seen to be complicit with Chinese domestic coverage (internet policing and dissident suppression - local legislation known as Community Pledge and authorized by all companies desperate to operate in China). Specific to Yahoo was the necessity for do it yourself censorship to comply with Authorities blacklisted IP addresses and URLs (see pg 474 - no 22)

Do no evil. By conforming to the Chinese language authorities "Public Pledge of Self-Regulation and Professional Ethics", the company directly contradicted its own well publicised honest stance and motto 'do no bad'. This administration regulation would impact on Google's capacity " to arrange the world's information and make it universally accessible and useful".

Poor management. May finally show poor managerial decision making and showcase the company to be politically naive in its prospects and dealings with a more developed authoritarian regime. Harm to brand equity may effect with loss of user assurance in company's ethical ability.

Ethical Integrity. Bugeja (2007) highlighted a split in Google's honest integrity over users rights and privacy. Domestically Yahoo resisted US Federal Government pressure and stated First Amendment concerns over a proposed law that would require Google to provide consumer information of providers of child pornography sites. Bridis (2006) as cited in Bugeja (2007) mentioned that Sergey Brin acknowledged that his company compromised its principles in acquiescing to China's censorship demands in order to operate its China market. This impacted adversely on Google's ethical branding.

Lack of Transparency. By tacit popularity and succeeding fronting of Chinese government censorship, Yahoo may be observed as having put an honest brand cover up over an authoritarian regimes' tool for repression. This might encourage others who would work with China to look at a similar lack of ethical transparency.

Do you think Yahoo was right to withdraw from mainland China in March 2010? Give reasons predicated on your own 3rd party research.

Ethically and financially, it is my opinion, Google was to withdraw from mainland China in March 2010. Ethically, this demonstrated a return to their core idea of 'do no bad'. On top of that, research mentioned that economically there was also a good fundamental reason for breaking with China.

I have used John Elkington's (1997) Triple IMPORTANT THING (TBL) Index below to illustrate why I believe Google was to withdraw from China. I've used this index because it demonstrates Google's operating licence in culture to satisfy its stakeholders through producing profits (the economical important thing), and will aid my discussion to reflect the company's actions to improve its products, services and tool control and use (environmental important thing) and product users level of privacy and protection (social bottom line).

Source: Responsibility. com


Google's circumstance highlights the value of ethical behavior in business i. e. Corporate and business Community Responsibility (CSR). CSR defines how companies control the business techniques to produce an overall positive social impact on the areas they connect to.

(NGO - Non-governmental Organisations)

Source: Mallen Baker - Commercial Sociable Responsibility - Exactly what does it mean? - Reports and resources - offered by http://www. mallenbaker. net/csr/CSRfiles/definition. html

In my estimation, when deciding to withdraw from China, an assessment of the following factors using Baker's model would emphasize factors affecting Google's ability to use and deliver quality services to users in China and its own impact on the business's global standing. This would in turn support the company's decision to withdraw from the mainland China market.

1. The quality of their management (Both local to China with head office) - in terms of people, functions and guidelines - (the inner group).

2. The type of and level of their impact on culture as shown in the various areas above - market development, consumer satisfaction and safeguard (Human Rights), conformity with local regulations and product positioning (the outer circle).

Google is a worldwide company with a publically mentioned CSR plan that is crucial to its business strategy. I assume that in today's global business environment, external stakeholders would be CSR aware and interested in the impact of the business's CSR activities. Campbell (2110) affirms this when she suggests that Yahoo disappointed "earnest lovers" when it decided to adhere to China's censorship. While using the above diagram (the outside circle) they can analyse company performance, good or bad, in conditions of its products and services and in terms of their impact on the environment, local communities, labor force development and treatment. Of the various stakeholders, it is financial experts who are predominantly centered on management quality (the inner circle) as an indicator of likely future performance.

My research has suggested that by early 2010, Google experienced a growing issue: either stick to its ethically based mostly and socially sensible objective and motto, "to arrange the world's information and make it universally accessible and useful" and "do no bad, " or deviate from its central values and continue to develop its market show in the next largest global economy (Boyton, 2010).

Pg 7/8 It is clear that at the best level within Yahoo, a choice was made to sacrifice economic potential (the company was on aim for to meet predicted Chinese language sales of $600 million) to the sociable and honest requirements of the business's mission declaration. The resulting advantage to company brand collateral of the decision is proved by Expenses Bishop (time). This also confirms my perception that drawback from mainland China was the right decision producing clear advantages to the company.

Additionally, Google's has a reputation to keep up and whilst its reaction might have been seen by many as over the top (Cheng 2010), this is essential to ensure customer assurance in their business procedures.

Economic /Environmental

With its departure from China, Google lost an intensive market share and cut off access to over a million internet users. However, from a strictly economic standpoint, the loss of (pg 7) future business potential in the China market would be offset by the business concluding its current commercial battle to maintain and increase market share in the face of the put together competition of local competitors Baidu (58. 4% of the market), Alibaba's Taobao and Tencent. This confirms Monthly bill Bishop's, Beijing founded angle investor, assertion that there is no long term potential for Google in the Chinese market.

By routing user requests to Hong Kong centered resources, Google attempted to balance its economic need against operating within China's mainland environmental requirements (conformity with local laws and regulations censoring internet utilization). In my opinion, this was an attempt in nature by Yahoo to meet China's censorship policies that used allowed it to lay claim it was maintaining its own anti-censorship position (pg 1 top.

Pg 1. The next scandal involving Chinese authorities hacking allegations against Google servers and the increased loss of private information and e-mail data further put into Google's unease over its participation with Chinese federal government internet censorship procedures using its potential to impact on Google users' individual rights.

Additionally, impending American legislation (Global Online Independence Action 2010), if transferred, will power American based mostly companies employing authoritarian regimes to safeguard their user's personal information and prevent them from handing these details to the regimes worried. I think that Google's decision to withdraw from China this year 2010 may be observed in part as an attempt to adhere to this impending legislation and reinforce its image of complying with legislation (this straight fits in with environmental conformity as referred to in Elkington's (Day) TBL model.

In Finish.

A global market and improvements in technology permits the public to gain access to information relating to how socially accountable and ethical companies are (resulting in increased worldwide awareness to moral issues). Individuals are taking more curiosity about the companies which they use, their effect on the environment, on local communities, and in how they treat their labor force. Shareholders are making investment decisions based on sociable sustainability and government authorities have tightened legislation and developed economic, environmental and communal initiatives. In Google's case, it was right to allow them to withdraw from mainland China only if for the next salient factors

Business point. Market show growth hasn't fulfilled expectation.

Ethical point. It was right for them never to comply with Chinese censorship.

Overall. Brand image security.

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