How Should Google Prioritize the Relative Obligation - Assignment Example

Business in Society 1. Who are the stakeholders in this case? How should Google prioritize the relative obligation that the company has towards the stakeholders and communicate this to them? The stakeholders in Google’s case include consumers, employees, the community, shareholders, and the Chinese government. Google finds itself in a precarious position of having to do its best in order to work in a bad system. The Chinese government has made things very difficult for internet service providers by censoring the information that they can give to consumers. Google has the responsibility of satisfying the needs of its consumers in China. It also has the responsibility to act within the territorial policies set out by the Chinese government. The Chinese culture of media censorship is very alien to Google’s entrepreneurial culture that is largely inspired by American capitalism. For this reason, the company’s executives have had to make many compromises, the biggest of them all being a suspension of the revenue aspect of its operations, and instead shifting focus on provision of information. This seems like a philanthropic measure which it is not; it is a risk management measure. Google first responsibility is to its shareholders. Shareholders expect that the services that the company offers to consumers will translate into bigger profits and, by extension, increase in the amounts of dividends paid out. In china, things are a bit different. Google found it difficult to operate in China with the main aim being to make business. Censorship laws made it difficult for the company to do that. Worse still, the tradition of self-censorship made it difficult for a foreign company like Google to understand where the lines are in order to avoid crossing them. Local internet companies know how to self-restrict and therefore have a competitive advantage, says Kujala (2002 p. 235). The main reason why Google did not start a mail service in China was that it did not like to create a situation that may get someone jailed. In this regard, the company was showing concern for its most valued asset: consumers as stakeholders. The trickiest thing was to make these stakeholders understand why the mail service was no longer available. On the issue of censored internet sites, Google displayed the website results whenever users searched for information relating to censored terms. However, when one tried to visit the website homepage, an error message appeared on the computer screen. The company decided to be putting up a disclaimer that the information being accessed is unavailable because it has been censored by the Chinese government. This was a very good way of communicating information to stakeholders. The American government accused Google of bowing to censorship demands by the Chinese government. In this regard, Google executives were summoned in congressional hearings in the U.S. Here was another tricky situation where the company was at pains to explain to a nagging stakeholder about the difficulties of doing business in a country with a bad internet business regulation system. On the one hand, the relative obligation was to do its best in order to reach out to the Chinese consumer who needs information. On the other hand, the company had a case to answer to the U.S congress whose laws it is subject to by virtue of being a registered company in the U.S. balancing these needs was a tricky issue that almost cost the company its reputation in the U.S. By assenting to Chinese censorship laws, Google seemed to be acting as an agent of the communist state, which it is not. In business form of thinking, every company should always try to make a presence wherever its competitors are in order to get its share of the market segment. This is what Google was trying to do by venturing into the hostile Chinese internet market. In order for Google to communicate its obligations to consumers, there is need for its executives to respond to their needs. The consumers can only express a sense of identity with the services offered when these services are in tune with the cultural needs of the local population. This is the biggest competitive edge that local internet companies in China use in order to thwart competition from foreign companies such as Google and Yahoo. For Google, the main aim has been to communicate its obligations to the Chinese consumers. For instance, when the company decides not to offer an email service, it should make Chinese people understand that this was done since the company did not desire to see a situation whereby someone ends up in jail for using the email service to communicate information that the state considers to be inappropriate. The information that Google should constantly communicate to stakeholders is made by employees. Some of these employees are from China while others are from other countries, and they may not understand the Chinese internet censorship environment very well. Making these foreign employees to do what they are instructed to do is not an easy thing. These employees may question why they are doing something that would be unheard of in the other countries where Google has been operating in the past such as the United States. The company, according to what Brickson (2005, p. 582) implies, has an obligation to communicate the ethical obligations that it has to Chinese consumers, the Chinese government and the U.S government. When employees understand the company’s predicament, they can join hands and embark on the task of offering the best services to consumers within a flawed communist system. The employees would be in a better position to explain to consumers why some websites have been blocked. Back home, these very employees would be instrumental in making congressional hearing panelists understand the harsh political realities and the need for a company to pursue business operations in order to maintain a global image as well as generate revenue for stakeholders. Berg & Zald (1978, p. 132) note that in times of crisis, reputation management is as important as the very process of crisis management. Google’s crisis touches on all stakeholders. Therefore, all the crisis management strategies employed have to be such that the company’s reputation is repaired as much as possible and that the U.S government understands that the company is not an operative of the Chinese communist government. In case there happens to be the slightest miscommunication about the company’s circumstances, observes Castells (2001 p. 56), shareholders may get the impression that the company’s services are very poor and this may make the services it offers very unpopular. To avoid, structured communication channels are an absolute necessity. The most difficult communication to make to shareholders is about Google’s rationale in concentrating on provision of information in China instead of concentrating on ways of generating revenue. The main explanation to shareholders must entail an accurate articulation of the concept of reciprocal obligations. It would be good for these shareholders to learn that this approach is in line with the company’s objective of providing information “now” and seeking opportunities of generating revenue “later” (Waddock & Graves, 1997 p. 257, Getz 1997, p. 71). Google should not put its long-term survival at risk at the expense of bowing to the demands of the stakeholders. The only exception is when failure to do this poses an immediate, potent threat to its day-to-day operations. When such a threat happens, communication with stakeholders becomes very necessary. This communication should dwell on matters of explaining the role of government, describing whether the environment is enabling or disabling and explicitly stating the nature of difficulties that are encountered. The company should also justify its choice of corrective measures in order to avoid negative perception and harmful criticism from stakeholders. Frederick (1994 p. 155) observes that stakeholder relationships require strategy for them to be successful. Google should focus on giving an accurate analysis of the events that affect its daily operations in China. The context of all these events should be explained as well. A management response approach, according to Carroll & Buchholtz (2007 p. 198), should be seen to have been used based on the communication channels that the company uses in order to lay down the facts as they are. While doing this, the stakeholder dialogue practices employed should be acceptable to all people who are expected to receive the information and act on it. This is the only way that it can have an impact, hopefully a positive one. Rather than run away from opposing views, Google should appreciate in its communication as well as fulfillment of relative obligations, the existence of antagonism between democracy and communism. Google should pursue its obligations in a manner that makes all stakeholders get the impression this is just a profit-making enterprise that is caught up between clashes of different systems of government. In every communication that a company engages in there is always an emergence of two opposing views with regard to how the company should operate. According to the classical view, the only stakeholder to the business is the shareholders. By extension, the most important obligation of the business is to maximize financial returns for all shareholders. According to the social-economic view, every business has multiple stakeholders: employees, customers, governments and various community groups. Google should adopt the latter view, owing to the circumstances that it is in. For instance, it is finding itself in conflict with two governments. It is also finding it indispensable to contribute to the improvement of the Chinese society by providing people with information. All stakeholders must be made to understand what their role in the company is and what they company can do in order to meet most, if not all, of their expectations. Differentiating between primary and secondary stakeholder, according to Berman &Wicks (1999, p. 501) is a good way of enabling Google prioritize its relative obligations. Its ability to perform within acceptable standards stem from a clear understanding of the stakeholders who matter most and those who matter least. After a clear distinction has been drawn, priorities can be set accordingly. Likewise, communication strategies can be designed in a strategic manner with emphasis being on setting up the strongest diplomatic ties with those people whose continued support is needed for the survival of the company to be guaranteed. 2. Use theories or models theories of CSR as the basis of answering the following questions: a. What role and responsibility does a technology company such as Google have towards society in general?10 marks Google has the obligation to provide information to its customers. It also has the responsibility to interact with the community where it operates. According to the social-economic view of corporate social responsibility, no business can survive without interacting with the local community, which comprises of community groups, consumers and government machinery. Maak (2007, p. 329) is of the opinion that other than monetary capital, every company should invest in social capital. In Chinese context, for example, Google has a responsibility to offer the Chinese people an opportunity to share in a wealth of information. The company should do this in line with the rules set out by the Chinese government. While doing its business, the company should ensure that it plays a role of ensuring that the long-term needs of the Chinese society are met. These needs may relate to issues such as health, HIV and AIDS, unemployment, democracy and education. Google can make use of its technological might to open up many self-employment opportunities in countries that suffer from high unemployment rates. The company can capitalize on those services that enable the public generate revenue rather than those that merely entertain them, causing them to lose precious time. Google has the potential to run voluntary online campaigns on matters of environmental awareness. Ultimately, when the society becomes cleaner, the society becomes a better place to live and enjoy the services offered by this company as well as other business firms. Sometimes, the company may deem it necessary to educate the public on the dangers that come with doing business online. This may touch on issues like online piracy, threats of computer virus attacks, existence of spyware and malware and the threats that computer hackers pose to the future of e-commerce. As Friedman & Miles (2002, p. 20) rightly indicate, when consumers are provided with important information relating to safety of internet use, everyone can benefit from the cordial relations that grow out of such corporate social responsibility measures. If this was not to happen, Google may be accused of opening up opportunities for online businesses only to let the entrepreneurs suffer losses at the hands of hackers and online copyright thieves. The sheer magnitude of social capital that Google has nurtured with different technology companies puts this firm in a very good position to be able to help other members of the society without having to spend much. If the company was to provide education on the social impact of over-reliance on the internet, the world would be a better place in this era of internet connectivity. The task of mobilizing other players in the information technology industry lies at the heart of corporate social responsibility among companies. The central question would be to do this in a holistic manner. If Google undertook CRS campaigns alone, the amount of time diverted to these efforts may seem to the company’s managers to be a wasted effort if other players fail to commit themselves to similar efforts. The main reason why a company may decide to embark on corporate social responsibilities alone is the promise that comes with such an undertaking. The promise is that the image of the company will be improved together with its reputation, with the end result being increased popularity. For this strategy to work, the company has to understand the manner in which stakeholders would like to view it. In this case, Google is widely known for its excellence as an internet search engine. Therefore its corporate social responsibility efforts should be geared towards making it simple for as many persons as possible to access internet services as well as to make the best use of these services. Additionally, the company should engage in activities that create the most accurate impressions of the image it wishes to put across. These impressions should be evaluated from time to time and the necessary measures taken whenever need arises. Since internet platforms are always changing very fast, the company’s employees should appreciate these changes and act upon them in a socially responsible manner. This may involve provision of free email services, provision of updates, and facilitating access to help topics on how to use the internet, guidelines on how to protect one’s computer from computer viruses, hackers, malware and spyware. Carroll (1999 p. 171) makes the observation that the internet business is full of opportunities of ensuring that stakeholder expectations are met. The internet touches on all facets of any given society. As long as corporate social responsibility efforts do not bring about a clash of interests among stakeholders, they should be embraced. The best approach for Google to adopt in corporate social responsibility efforts is one that is holistic. It should be in line with the interests of all people on whom the success of operations impacts on in one way or the other. For owners, the main interest is financial return. For employees, the main motivation for working for Google is pay, satisfaction and friendliness in supervisory measures. Customers would be interested in above all other things, quality. For suppliers, timeliness in provision of service is of utmost importance. For the community, engagement in community affairs is a crucial area of interest. Likewise, the government expects such a company to adhere to all rules, regulations and policies that have been set up (Seeger, Sellnow & Ulmer 2001 p 156). b. Should the home company culture, ethics and risk management approach impact how the company operates in china? 10 marks---------2 pages The home company culture is something that has become entrenched in Google as a business establishment that conducts business in a specific social setting. It is difficult for Google employees to work in an environment that has completely new standards of operations. As much as it is difficult for Google employees to change tact to fit into the new environment, such a measure is very necessary. For Google, the dilemma is on the pressure by the U.S government not to bow to Chinese censorship laws on the one hand and the need to tap into the lucrative Chinese market, the way its competitors are doing today. What is needed is proper communication among all stakeholders, most importantly the Chinese consumers of Google’s products and the American government. These two stakeholders must appreciate the odds that are working against a highly innovative company that is trying to penetrate a market in the face of strict censorships laws imposed by a communist regime. The culture and ethics of the Chinese internet users are difficult to change. Google must not impose American culture and ethics on the Chinese internet users. For instance, Chinese businesspeople find it socially awkward to send someone a message. This is why email message services are not popular in China. Their place is often taken by chat services. Internet search engine companies that offer chat services register massive corporate success since their services are in line with the cultural values of the target market. However, in matters of risk management, Google can succeed by using the strategies that it has been using in the U.S. One of its most treasured approaches combines aspects of user-focus, bottom-up innovation and freedom in order to bring about efficiency. This strategy can work in foreign settings. In fact, it has proven to be an effective strategy in China where they company decided to put the goal of user-focus in provision of information ahead of generation of revenue. This risk management measure was taken in response to strict self-censorships laws imposed by the Chinese government. The risk approach was employed after Google’s owners realized that the Chinese people understand it whenever some information is being withheld. On their part, Google’s employees used an approach in computer science that appreciates the fact that even lack of information amounts to a certain piece of communication. Against this backdrop, whenever a website was inaccessible, Google put a disclaimer stating that the reason for the inaccessibility of the website is censorship by the Chinese government. The success of the company’s risk management approach in China depends on whether the company will be able to adhere to rules and regulations set up by the Chinese government. Sometimes, risks might be managed in a manner that is not culturally and legislatively compatible with the requirements set up in a foreign setting. In this case, some adjustments become very necessary. The greatest setback may be a scenario whereby employees fail to appreciate the need for responsiveness to the foreign country’s regulatory mechanisms, no matter how punitive they may appear to be as far as the company’s core values are concerned. In any risk management measure that a company takes, the bottom line is always safeguard corporate assets, to protect the company’s reliability, to ensure compliance with laid-down rules of trade and to anticipate organizational risks with a view to remedy them. This leads to a situation whereby negative situations are minimized, thereby hedging uncertainty. c. To what extent do you agree with those who criticize Google as acquiescing to china’s censorship of the Google company websites? 5 marks I do not agree with people who continue to criticize Google on account of acquiescing to censorship of its websites by the Chinese government. In actual sense, Google is trying to chart a long-term strategy of providing the information to everyone in the china and informing them whenever access to certain information is being denied by the Chinese authorities. The main target of Google’s managers is the middle class Chinese population that embraces cosmopolitanism and westernization. The long-term effect of Google’s efforts is a revolution of sorts whereby people will the freedom that they need in order to express their views in all issues affecting them. Google’s strategy is a risk management initiative. Rather than suffer the financial losses that would come with the decision to pull out of China, the company would rather engage in what the public sees as a corporate social responsibility initiative by accelerating the pace at which everyone with internet connections accesses information. Stakeholder interests are best catered for this way. Google does not offer any service that may get someone get jailed by Chinese authorities. If it was acquiescing to censorship by Chinese authorities, the company would offer all types of services with absolute disregard the problems that the services may create for users in their effort to put these utilities into various uses. Conclusion For Google to succeed in its operations in China there it needs to put in place effective risk management mechanisms. The best way to put the needs of all stakeholders is to take into pursue the user-focus approach in the efforts to provide information to Chinese internet users. This approach will ultimately pay off handsomely through creation of new ways of revenue generation. Additionally, it is a way of building the company’s reputation and by extension, competitive edge, since it qualifies to be considered as a corporate social responsibility effort. References Berg, I, & Zald, M, 1978, ‘Business and Society’, Annual Review of Sociology, vol. 4, no. 12, pp. 115-43. Berman, S, &Wicks, A, 1999, ‘Does Stakeholder Orientation Matter? The Relationship between Stakeholder Management Models and Firm Financial Performance’ The Academy of Management Journal, Vol. 42, No. 5, pp. 488-06. Brickson, S, 2005 ‘Organizational Identity Orientation: Forging a Link between Organizational Identity and Organizations' Relations with Stakeholders’ Administrative Science Quarterly, Vol. 50, no. 4, pp. 576-609. Carroll, A, & Buchholtz, A, 2007, Business and Society: Ethics and Stakeholder Management, Cengage Lerarning, Natorp Boulevard. 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