ASSIGNMENT 3

CASE STUDY

Q1.Can Google afford not to do business in China?

It is indisputable that the People’s Republic of China is now a major economic player on a global
scale. As the second-largest economy with a GDP of $ 8,765 billion China is becoming more
than ever a key trade partner with the West. Google should not really afford not to do business in
China, because China is a country in development (BRICS) which is important to take into
account today. In fact, many companies especially in technologies, like Start Up growing, and
that’s why Google must be present in China to be an actor important which accompany these
start-up.
So Google’s move into China gave it access to a very large market, which would allow
them to grow rapidly or their low production costs but it’s a big market with many concerns; like
very strict political laws, which can bring some difficulties for the installation of Google. Google
has the funds and resources to not get involved with China's government but choose not to since
that is not what the Google company is not about. They choose to so that no part of the world
could be left out of the search engine and only follow the Chinese government rules so that they
do not make any exceptions. Though they chose to close it late and move to another means of
giving assistance by other means, it was more so for the citizens of China rather than just for the
business revenue.

Q2. Which stakeholders would be affected by Google’s managers’ possible decision to shut
down its China operations? How would they be affected? What trade-offs would Google be
making?

- Employees in China who have worked incredibly hard and because they lost their job
- Chinese consumers because they lost the possibility to have Google in a uncensored version
- All managers who worked on this project of development because their strategy is calling into
questions, Google would make the trade off of regaining some brand notoriety by leaving a strict
country and escaping future cyber attack or other form of espionage. Google would regain more
control. Even if it is true that China has a very big potential in terms of Internet users, Google
favors quality and security so as not to lose the ultimate users.

Q3. Should Google’s managers be surprised by the China predicament?

They were pretty aware of the risks considering that Chinese authorities are notorious for their
hard-line censorship rules regarding the internet and the simple fact that China is a strict
government. Managers shouldn’t be surprised by what happened, as they can’t overcome the
difference of mentality despite being one of the most powerful brands in the world. Indeed,
managers had to expect not to be able to act according to the situation in China. Chinese
authorities are notorious for their hard line censorship rules regarding the Internet. They take a
firm stance against risqué content and have objected to The Sims computer game, fearing it
would corrupt their nation’s youth.