GOOGLE VS. CHINA

V I VI A

N LI U

, LA U R E N C

R O K E , AN N Z

H E N G

BASIC INFO

Renowned search engineGoogle.com/fr/deExpand in 2005China 2nd highest Internet users

CURRENTLYRestricted access- ‘Great firewall’- Thus Google unreliable,

inefficient and slow.Baidu.Google's stake in Baidu.Google under pressure.

THE PLAN

Hired Dr Kai-Fu Lee to help negotiations. Set up research and development centre in China.China: Access to Googles technology and research.Google: Gain presence in Chinese market (increase revenues).

  Google set up in China Google remain on the outside

Google  Pro’s Place in the Chinese 

market Increased Revenues More efficient Services Achieving their goal 

-‘Instant gratification’.Con’s Abiding to legal 

restrictions and censorship (Decrease the value of their searches- not as thorough).

  

 Pro’s Does not have to abide 

to heavy restrictions.Con’s Offshore website would 

be unreliable due to firewall.

Slow. Not achieving their goal. Baidu takes over. Missed opportunity for 

increase income. 

Google set up in China

Google remain on the outside

China  

Pro’s Access to Google's R+D. Enhancing their 

international reputation.

Create and retain many jobs.

Con’s Fear of westernisation.

 

 

Pro’s No fear of 

westernisation. Censorship and 

restrictions under control.

Con’s Brain Drain. Lost opportunity to 

access Google's R+D. 

POSSIBLE OUTCOMESThere are three possible outcomes for Google, they could:

1. Establishes a local domain.2. Continues offshore.3. Lobby the Chinese Government for a greater stake in

Baidu.

WHAT TYPES OF SEARCHES ARE CENSORED/MONITORED?

GOAL: NEED TO DEVELOP A GOOD RAPPORT WITH CHINESE USERS

China is a collectivist society – suspicious of foreign firms. Key learning #1: assimilation of company cultureThe government acts in the interest of the country at large.Key learning #2: consideration of all players

GOAL: USE OF DR LEE TO ASSIST IN OPENING NEW RESEARCH FACILITY

Advantages for Chinese government Curtail ‘brain drain’ and create new jobs Access to key research technology Reconcile ascription and achievement societiesKey learning #1: recognise ‘comfort zone’ of home party Appeal to China’s relationship oriented societyKey learning #2: importance of personal relationships

GOAL: SOCIAL AND POLITICAL STABILITY – CONFIRMING TO CENSORSHIP

Google’s sacrifice Future Orientated SocietyConfucian philosophyKey Learning: collective identities

GOAL: ESTABLISHING A POSITIVE RELATIONSHIP WITH CHINESE GOVERNMENT

Power distance communityHierarchical society Sequential v Synchronic culturesKey Learning: building relationships

SOURCESGrogan, C. and Brett, J, 2006, “Google and the Government of China: A Case

Study in Cross-Cultural Negotiations,” Kellogg School of Management Kalathil, S, 2003, “China’s New Media Sector: Keeping the State In,” The

Pacific Review vol 16. No. 4 pp. 489-256 Phatak et al, 2009, International Management, 2nd edn., McGraw-Hill/Irwin,

New York Philip P. Phan, 2005, “Hu Tightens Party’s Grip on Power,” Washington Post,

April 24 Brett, J. M., 2007, Negotiating Globally: How to Negotiate Deals, Resolve

Disputes, and Make Decisions Across Cultural Boundaries, John Wiley & Sons, Inc.

Graham, J. L., Lam, N. M., ‘The Chinese negotiation’, Harvard Business Review, vol. 81, no. 10, p. 82-91.

Kusyk, S. 2010, ‘Unmasking the myths: learning to navigate the rough seas of ethics’, Deep Insight, no. 5, p. 31-37.