What is planning and implementation?

800–1,000 words, NO
Plagiarisms, References Research
a top multinational company in the world including its international strategy
over the last 10 years. Using your research, write a report explaining its
strategy, including a discussion of the following questions:
How do
management practices, HR policies, and strategy decisions differ between
multinational companies and local companies?
Identify some
cultural, legal, political, and financial issues this multinational
company may have based on their environment.
What sort of
international orientation does it have?
Do you think it
is ethno-, poly-, or geocentric?
What were the
decision factors for the locations it chose to expand in?
Did it have the
core capabilities to succeed in those markets?
Think about its
objectives, how it chose its countries, what opportunities and
constraints were apparent at the time, and what it needed to do to
succeed in those markets.

If you were
going to compete with this company what would you use as an international
marketing entry strategy (licensing, franchising, exporting, joint
ventures, etc.) and justify your answer
Define what a
value chain dispersal and integration strategy is, and then describe how
the strategy is organized around it.
The files should help with the report Thank you in advance.
google_in_china__1_.pdf

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CASE: P-54
DATE: 11/15/06
GOOGLE IN CHINA
“It’s an imperfect world, we had to make an imperfect choice.”
Elliot Schrage, Google vice president for global communications and public affairs.
INTRODUCTION
Using servers located in the United States, Google began offering a Chinese-language version of
Google.com in 2000. The site, however, was frequently unavailable or slow because of
censoring by the Chinese government. Google obtained a significant share of searches in China
but lagged behind market leader Baidu.com. To achieve commercial success, Google concluded
that it was imperative to host a website from within China. Given its motto, “Don’t Be Evil,”
Google had to decide whether to operate from within China or to continue to rely on
Google.com. If it decided to establish operations in China, the company had to decide how to
deal with the censorship imposed by the Chinese government.
As a result of an extensive debate within the company, cofounder Serge Brin explained their
decision: “We gradually came to the realization that we were hurting not just ourselves but the
Chinese people.”1 Google decided to establish the site Google.cn, but without features that
allowed users to provide content. To avoid putting individuals in jeopardy of being arrested,
Google offered neither e-mail nor the ability to create blogs, since user-generated material could
be seized by the Chinese government. This allowed Google to avoid putting individuals in
jeopardy of being arrested. Because it would be required by Chinese law to censor search results
associated with sensitive issues, Google decided to place a brief notice at the bottom of a search
page when material had been censored, as it did in other countries such as France and Germany
which banned the sale of Nazi items. Google planned to exercise self-censorship and developed
a list of sensitive items by consulting with third parties and by studying the results of the Chinese
government’s Internet filtering. Senior policy counsel Andrew McLaughlin stated, “Google is
mindful that governments around the world impose restriction on access to information. In order
to operate from China, we have removed some content from the search results available on
Google.cn, in response to local law, regulation or policy. While removing search results is
1
San Jose Mercury News, March 3, 2006.
Professor David P. Baron prepared this case from public sources as the basis for class discussion rather than to illustrate either
effective or ineffective handling of an administrative situation.
Copyright © 2006 by the Board of Trustees of the Leland Stanford Junior University. All rights reserved. To order copies or
request permission to reproduce materials, e-mail the Case Writing Office at: cwo@gsb.stanford.edu or write: Case Writing
Office, Stanford Graduate School of Business, 518 Memorial Way, Stanford University, Stanford, CA 94305-5015. No part of
this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any
means –– electronic, mechanical, photocopying, recording, or otherwise –– without the permission of the Stanford Graduate
School of Business.
Google in China P-54
p. 2
inconsistent with Google’s mission, providing no information (or a heavily degraded user
experience that amounts to no information) is more inconsistent with our mission.”2
Within a month of offering Google.cn, Google came under criticism from two government-run
newspapers in China. The Beijing News criticized the company for not doing enough to block
“harmful information.” Referring to Google’s practice of informing users when search results
had been censored, the China Business Times wrote in an editorial, “Is it necessary for an
enterprise that is operating within the borders of China to constantly tell your customers you are
following domestic law?” Both publications claimed that Google was operating as an Internet
content provider without a proper license.3
Reporters Without Borders, a Paris-based organization campaigning for freedom of expression,
called the establishment of Google.cn “a black day for freedom of expression in China.” It
stated:
The firm defends the rights of U.S. Internet users before the U.S. government, but
fails to defend its Chinese users against theirs. United States companies are now
bending to the same censorship rules as their Chinese competitors, but they
continue to justify themselves by saying their presence has a long-term benefit.
Yet the Internet in China is becoming more and more isolated from the outside
world.4
Other activists demanded that Google publish its censorship blacklist in the United States.
Internet Censorship in China
According to the U.S. State Department, companies offering Internet services were “pressured to
sign the Chinese government’s ‘Public Pledge on Self-Discipline for the Chinese Internet
Industry.’” Under the agreement, they promised not to disseminate information that “breaks
laws or spreads superstition or obscenity” or that “may jeopardize state security and disrupt
social stability.”5 Providing Internet services required a license which in turn required not
circulating information that “damages the honor or interests of the state” or “disturbs the public
order or destroys public stability…”6
Censorship in China involved self-regulation by Internet companies as well as government
actions. The government did not provide a list of objectionable subjects—instead companies
inferred which topics were out of bounds by observing what the government censors removed.
The State Council Information Office also convened weekly meetings with Internet service
providers. An American executive explained, “It’s known informally as the ‘wind-blowing
meeting’—in other words, which way is the wind blowing. They say: ‘There’s this party
2
The New York Times, January 25, 2006.
Washington Post, February 22, 2006. Google shared a license with a Chinese company Ganji.com. This practice
was common among foreign Internet firms.
4
The New York Times, January 25, 2006, op. cit.
5
BusinessWeek, January 23, 2006.
6
Clive Thompson, “Google’s China Problem (And China’s Google Problem),” The New York Times Magazine,
April 23, 2006.
3
2
Google in China P-54
p. 3
conference going on this week. There are some foreign dignitaries here on this trip.’”7 Xin Ye,
a founder of Sohu.com, a Chinese value-added Internet services firm, was asked how hard it was
to navigate the censorship system. He said, “I’ll tell you this, it’s not more hard than dealing
with Sarbanes and Oxley.”8
Zhao Jing, a political blogger in China, “explained that he knew where the government drew the
line. ‘If you talk every day online and criticize the government, they don’t care. Because it’s
just talk. But if you organize—even if it’s just three or four people—that’s what they crack
down on. It’s not speech; it’s organizing.’”9 In December 2005 Zhao called for a boycott of a
newspaper because it had fired an editor. In response, the Chinese government asked
Microsoft’s MSN to close Zhao’s blog and Microsoft complied.10 Brooke Richardson of MSN
said, “We only remove content if the order comes from the appropriate regulatory authority.”11
Yahoo and MSN, as well as other sites, complied with Chinese law as well as exercising selfcensorship.12 Robin Li, chairman of the Chinese search company Baidu.com, said, “We are
trying to provide as much information as possible. But we need to obey Chinese law.”13 Baidu
had reached an agreement that allowed the Chinese government to oversee its website and in
exchange it avoided the disruptions of service and strict operating rules that plagued foreign
Internet companies.14
In 2004 Yahoo provided information to the Chinese government that led to the arrest of the
journalist Shi Tao. Shi was subsequently sentenced to 10 years in prison for releasing state
secrets on a foreign website. Shi had provided information by e-mail about a Communist party
decision. Yahoo general counsel Michael Callahan said the company regretted that action but
had no alternative since its Chinese employees could have been arrested on criminal charges for
not providing the information to the government. Callahan also said that Chinese law prohibited
disclosing how many times the company had provided information on users to the government.15
The agencies that regulated the Internet employed 30,000 people who monitored e-mail,
websites, blogs, and chat rooms. Internet cafes were required to use software that stored data on
all users. Anyone establishing a blog was required to register with the government. Telephone
companies were required to incorporate software that censored text messaging.
A key part of the censorship system was the control by the government of all gateways into
China. This allowed the censors to block undesired content on websites and restrict Internet
search results. Referred to as the Great Firewall of China, routers at China’s nine Internet
7
Clive Thompson, “Google’s China Problem (and China’s Google Problem),” The New York Times Magazine, April
23, 2006.
8
Ibid.
9
Ibid.
10
Microsoft’s blogging servers are located in the United States. Clive Thompson, “Google’s China Problem (and
China’s Google Problem),” The New York Times Magazine, April 23, 2006.
11
BusinessWeek, January 23, 2006, op. cit.
12
Yahoo lagged behind other Internet companies in China and in 2005 invested $1 billion for a 40 percent interest in
the Chinese company Alibaba.com. Yahoo then turned operating control of Yahoo China over to Alibaba.com.
13
BusinessWeek, January 23, 2006, op. cit. Baidu had a 46.5 percent share of Internet searches in China; Google
was second with 26.9 percent. Google had a small stake in Baidu but sold it in June 2006.
14
The New York Times, September 17, 2006.
15
San Jose Mercury News, February 20, 2006.
3
Google in China P-54
p. 4
gateways examined messages and search requests and were programmed to block or censor
information. It was this firewall that made accessing Google.com slow or at times unavailable
from China.
China also blocked certain news sites including the BBC News, Voice of America, Amnesty
International, Human Rights in China, and Wikipedia, in addition to any information on the
spiritual movement Falun Gong which was banned in China. Search results on terms such as
Tiananmen Massacre, Tibet, and Dalai Lama were also suppressed.
Censorship was also practiced elsewhere, including at universities. University computer systems
and bulletin boards banned certain subjects such as politics, and student monitors directed
chatroom conversations away from sensitive subjects to those that helped build a “harmonious
society.” Student monitor Hu Yingying said, “We don’t control things, but we don’t want bad or
wrong things to appear on the websites. According to our social and educational systems, we
should judge what is right and wrong. And as I’m a student cadre, I need to play a pioneering
role among other students, to express my opinion, to make stronger my belief in Communism.”
Another student, Tang Guochao, said, “A bulletin board is like a family, and in a family, I want
my room to be clean and well-lighted, without dirty or dangerous things in it.”16
The censorship system was in a technology race with those attempting to evade it. Bill Xia, who
arrived in the United States as a student in the 1990s and subsequently founded Dynamic Internet
Technology (DIT), developed software called FreeGate that masks the websites that users visit.17
Companies such as DIT and UltraReach also used software to create new websites to elude the
Chinese censors.18 For Voice of America, for example, DIT established uncensored proxy sites
that directed users to the real site. DIT and UltraReach sent millions of e-mails a day alerting
users to the uncensored sites. The Chinese censors worked to shut down the proxy sites and
were often able to close the sites within a few days. The companies then would develop new
software to evade the censors.
The Chinese government sought to justify its practices. Liu Zhengrong, deputy director of the
State Council Information Office’s Internet Affairs Bureau, argued that China’s efforts to keep
out “harmful” and “illegal” information were similar to those in Western countries. He said, “If
you study the main international practices in this regard you will find that China is basically in
compliance. The main purposes and methods of implementing our laws are basically the
same.”19 He observed that the New York Times and Washington Post websites deleted content
that was illegal or in bad taste. He added, “Our practices are completely consistent with
international practices.” He continued, “Many of our practices we got from studying the U.S.
experience.”20 He noted, “It is clear that any country’s legal authorities closely monitor the
spread of illegal information. We have noted that the U.S. is doing a good job on this front.”21
16
The New York Times, May 9, 2006.
Human Rights in China and Radio Free Asia were also DIT clients.
18
Both DIT and UltraReach were said to be connected to the Falun Gong movement. San Jose Mercury News, July
2, 2006.
19
The New York Times, February, 15, 2006.
20
Wall Street Journal, February 15, 2006.
21
The New York Times, February, 15, 2006, op. cit.
17
4
Google in China P-54
p. 5
Liu commented, “No one in China has been arrested simply because he or she said something on
the Internet.”22 Reporters Without Borders claimed that 62 Chinese were in prison for “Posting
on the Internet articles and criticism of the authorities.”23
Despite the international criticism of Internet censorship in China, it was not clear that the
Chinese people were concerned. Kai-Fu Lee, who headed operations for Google in China said,
“People are actually quite free to talk about [democracy and human rights in China]. I don’t
think they care that much. I think people would say: ‘Hey, U.S. democracy, that’s a good form
of government. Chinese government, good and stable, that’s a good form of government.
Whatever, as long as I get to go to my favorite website, see my friends, live happily.’”24
Ji Xiaoyin, a junior at Shanghai Normal University, commented, “I don’t think anybody can
possibly control any information in the Internet. If you’re not allowed to talk here you just go to
another place to talk, and there are countless places for your opinions. It’s easy to bypass the
firewalls, and anybody who spends a little time researching it can figure it out.”25
Google’s Perspective
In response to criticism that Google should lobby the Chinese government to change its
censorship system, CEO Eric E. Schmidt said during a visit to China, “I think it’s arrogant for us
to walk into a country where we are just beginning operations and tell that country how to run
itself.” He also explained, “We had a choice to enter the country and follow the law. Or we had
a choice not to enter the country.” Earlier he had said, “We believe the decision that we made to
follow the law in China was absolutely the right one.”26
Speaking at an ethics conference on Internet search at Santa Clara University, Peter Norvig,
director of research at Google, commented on the decision not to offer services such as e-mail
and blogging in China. “We didn’t want to be in a position to hand over users’ information. …
We thought that was just too dangerous….We thought it was very important to keep our users
out of jail.”27
Norvig justified Google’s policies in China. “Yes, it’s important to get information about
democracy and Falun Gong. They also want to know about outbreaks of bird flu. We thought it
was more important to give them this information that they can use even if we have to
compromise.”28
Google continued to debate internally whether and how it should operate in China. It also hoped
for guidance from the U.S. government and the industry. Norvig said, “We feel that the U.S.
government can stand up and make stronger laws, and we feel that corporate America can get
together and have stronger principles. We’re supporting efforts on both those fronts. We feel we
can’t do it alone.”29
22
San Jose Mercury News, February 20, 2006, op. cit.
San Jose Mercury News, July 2, 2006.
24
Clive Thompson, op. cit.
25
The New York Times, May 9, 2006, op. cit.
26
The New York Times, April 13, 2006.
27
San Jose Mercury News, March 1, 2006, and March 3, 2006, op. cit.
28
San Jose Mercury News, March 1, 2006, op. cit.
29
San Jose Mercury News, March 1, 2006, op. cit.
23
5
Google in China P-54
p. 6
Norvig disclosed that Google was not keeping search logs in China. “They don’t have
personally identifiable information but they do have IP addresses that are potentially identifiable
with an individual.”30 That information was kept in the United States, and China could request
that information through the U.S. State Department.
Political Pressure in the United States
In advance of congressional hearings on China and censorship, the State Department announced
the creation of a Global Internet Task Force to decrease censorship and encourage change in
other countries. Paula Dobriansky, undersecretary of state for democracy, human rights, and
labor, said, “The Internet, especially, can be a liberating force. Topics once politically taboo can
become freely discussed, and people can communicate anonymously. We must ensure it does
not become a tool of repression.”31
Representative Chris Smith (R-NJ), chairman of the House Subcommittee on Africa, Global
Human Rights, and International Operations, introduced the Global Internet Freedom Act that
would impose restrictions on U.S. companies operating in China. It included a code of conduct,
requiring that e-mail servers be located outside the country, and licensing requirements for the
export of technologies that could be used for censorship. Smith held a hearing in which Cisco
Systems, Google, Microsoft, and Yahoo testified and were grilled by subcommittee members.
Commenting on China’s sophisticated censorship system, Smith said, “It’s an active partnership
with both the disinformation campaign and …, and the secret police in China are among the most
brutal on the planet. I don’t know if these companies understand that or they’re naïve about it,
whether they’re witting or unwitting. But it’s been a tragic collaboration. There are people in
China being tortured courtesy of these corporations.”32 The bill was passed by the subcommittee
and was sent to full committee for consideration.
Representative Tom Lantos (D-CA), leader of the Congressional Human Rights Caucus and a
survivor of the Holocaust, said, “These captains of industry should have been developing new
technologies to bypass the sickening censorship of government and repugnant barriers to the
Internet. Instead, they enthusiastically volunteered for the censorship brigade.”33
In congressional testimony Elliot Schrage, vice president of global communications and public
affairs at Google, explained that China was an important market for the company. He said, “It
would be disingenuous to say that we don’t care about that because, of course, we do. We are a
business with stockholders, and we want to prosper and grow in a highly competitive world. At
the same time, acting ethically is a core value for our company, and an integral part of our
business culture.”34
30
San Jose Mercury News, March 3, 2006, op. cit.
San Jose Mercury News, February 15, 2006, op. cit.
32
Ibid.
33
San Jose Mercury News, February 19, 2006.
34
Wall Street Journal, March 10, 2006.
31
6
Google in China P-54
p. 7
Earlier in 2006 Google had refused to c …
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