Google and the Government of China:

A Case study of Cross – Cultural Negotiations

 Problem:

Though Google.com was periodically available to

Chinese users, it did not provide reliable and
efficient service to the market.
Major causes of the problem:

Searches were monitored by Chinese government

Unacceptable searches / results were blocked by
censors
Government interference (the Great firewall) slowed
the Google site’s speed and actively interfered with
its efficiency
Webpages inaccessible if they contain certain key
words
Choice available:

Establish a server presence in China (and submit

to state regulation and legislation on the front end
of the search)
Maintain an offshore server and force users to
endure significant delays caused by the firewall
acting on the backend of the search.
Google’s Perspective:

‘Don’t be evil’

Enhance company’s legitimacy with Chinese users

Primary goal is satisfy users’ preferences for

instant gratification of their information needs

Most loyal audience on the Web

Challenges:

Google labelled as a silicon valley company

A nationalistic culture, less willing to accept

foreign brands when Chinese brands existed

Not an in.group member .cn for greater revenue

streams from advertising

Profits and Brand Management

China’s Perspective:

Technology parity with United States

Consistently strive to provide its citizens / companies
with access to the very best technology

Allow Google to have a Chinese domain name and

set up a research/ support facility would give access
to Google’s proprietary research technology.

Limit brain drain and create jobs for Chinese citizens

Dr. Lee’s Presence

Issue of Internet regulation very important

China’s fear:
History and culture of China
Attempt to westernize China
Internet : Considered as tool or cause - Unwittingly
ushering an age of starting social change
Employed 30,000 policemen to patrol the internet to
pull the brakes on it
Discipline on state media and intimidate dissident
intellectuals
Hence Google has to censor its content and search
results
WIN TO WIN : RESOLUTION
Google:
How to reconcile the company’s principles with its
profit motives

Concerns of both parties:

Neither party was confident that a deal would be
reached

Each party would have to understand how the

culture of its counterpart might influence the
outcome of discussions
 AFTERMATH:

February 2006, by Elliot Schrage, Vice President, Global Communications

and Public Affairs, Google Inc. told

“There is no question that, as a matter of business, we want to be active

in China. It is a huge, rapidly growing, and enormously important market,
and our key competitors are already there. 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”.
Google’s Commitment:

1) To satisfy the interests of users, and by doing so to build a leading

company in a highly competitive industry; and

2) Access to information to anyone who wants it will make our world a

better, more informed, and freer place.

Some governments impose restrictions that make our mission difficult to achieve,
and this is what we have encountered in China. In such a situation, we have to
add to the balance a third fundamental commitment:

3) Be responsive to local conditions

What happened after?

1 Google launched the self-censored Google.cn in Jan 2006.

2. The Washington Post printed a list of the words/phrases that is seem to be

censored by Google.cn, in order to fall under Chinese legal guidelines.

3. Amid questions of whether Google would pressure the Chinese

government to end its policy of censoring, Google CEO Eric Schmidt said,
“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.”
What happened after?

1. Google’s hired of the extremely accomplished and well-known Dr. Kai-Fu Lee
to head up Google.cn

2. Having worked in high positions at Apple and Microsoft and having written a
guide for Chinese university students about how to succeed in American
business, Lee packs university auditoriums in China wherever he goes to speak.
What happened after?

1. In the two years following the launch of Google.cn in January 2006, Google
has done well, remaining second only to Baidu.com in terms of market share.

2. As of the second quarter of 2007, Google had increased its share from 19.2%
to 22.8% and Baidu.com had fallen from a 63.7% to a 58.1% share.

3. In April 2007, Google announced a deal with China Telecom, the world’s
largest wireless telecommunications and broadband services provider.
4. Finally, in August 2007 Google.cn entered into a partnership with tianya.com,
a Chinese online community.

Overall, while Google.cn remains far behind Baidu.com, the company is

optimistic.

In the words of Schmidt, “We were late entering the Chinese market and we
are catching up. Our investment is working and we will eventually be the
leader.
Negotiation

Bargaining with one or more parties for the purpose of arriving at a solution
acceptable to all

Distributive negotiation:

Bargaining that occurs when two parties with opposing goals compete over a
set value

Integrative negotiation:

Bargaining that involves cooperation between two groups to integrate

interests, create value and invest in the agreement.
The Negotiation Process

Planning
Options very important

Interpersonal relationship building

Exchanging Task related Information

Persuasion

Agreement
Negotiation Tactics

Location (Information, Cost of stay)

Time Limits

Buyer Seller Relations

Americans walk away

Japanese expect that buyer should get most of what they want
Reciprocal favours
Negotiation for mutual benefit:

Generate Options
Using Objective Criteria
Standing Ground