5 7As globalization continues to transform the world o.docx

5 7
As globalization continues to transform the world
of business, companies that decide to expand into other
countries are faced with many challenges. The markets in
developing nations hold great promise; however, any com-
pany that wishes to operate in them must often overcome
both relatively minor problems, such as dealing with cul-
tural differences, as well as larger problems, such as serious
human rights abuses. Google, the world’s largest internet
company, has to contend with both cultural differences
and human rights abuses while operating in China. An
analysis of Google’s actions in China shows how creative
solutions can be found to complex ethical problems.
The challenges Google has faced in China primarily
stem from the Chinese government’s controversial policy
of censoring the internet. Censorship is currently enacted
through what is officially known as the Golden Shield
Project; however, in the West it is more often referred to
by its unofficial nickname, the Great Firewall of China.
This policy was enacted in 1998 and has drawn much
criticism from Western governments and human rights
organizations like Amnesty International and Reporters
Without Borders (Clinton 2010; Amnesty International
2006; Reporters Without Borders 2009). Despite inter-
national pressure, the Chinese government adamantly
supports the censorship, and in early 2010 it released a
white paper addressing internet freedoms in China. In
the white paper, the government spelled out its official
policy, which is to block:

[Anything] against the cardinal principles set
forth in the Constitution; endangering state secu-
rity, divulging state secrets, subverting state power
and jeopardizing national unification; damaging
state honor and interests; instigating ethnic hatred
or discrimination and jeopardizing ethnic unity;
jeopardizing state religious policy, propagating
heretical or superstitious ideas; spreading rumors,
disrupting social order and stability; disseminat-
ing obscenity, pornography, gambling, violence,
brutality and terror or abetting crime; humiliat-
ing or slandering others, trespassing on the lawful
rights and interests of others; and other contents
forbidden by laws and administrative regulations.
(Information Office of the State Council 2010)
This policy is clearly broad enough that it gives China’s
Ministry of Public Security the power to block anything
it wants.
The Chinese government often uses this power to
quench criticism and suppress information about human
rights abuses (Amnesty International 2006). In order to
enforce the policy, China employs tens of thousands of
people to monitor forums, chat rooms, and bulletin boards.
It also filters all internet traffic coming into China from
other countries and requires all internet companies in
China to self-censor their content (Elgin and Einhorn
2006). Despite all of this, the Chinese government insists
that “Chinese citizens fully enjoy freedom of speech on
the internet” (Information Office of the State Council
2010). The censorship has certainly not affected demand
for the internet among China’s citizens; throughout the
last decade the number of internet users in China has
grown rapidly. In 2008 China became the country with

the most internet users in the world, and by 2010 it had
over 420 million users (China Internet Network Infor-
mation Center 2010).
Given this huge and rapidly growing market, operating
in China is of immense strategic importance for internet
companies like Google. However, Google is also known
for its strong moral culture and corporate mantra of “Don’t
be evil.” Herein lies the ethical dilemma for Google: it
needs to operate within China, but in order to do so it
must obey the self-censorship policy that runs counter
to its core values. In 2000 Google made its first move in
the Chinese market by launching a Chinese version of
Google in China: Finding
Creative
Solution
s to Cultural
Differences
C h r i S t o p h e r e . e b y
S h i p p e n S b u r g u n i v e r S i t y
Christopher E. Eby is a senior Computer Science major,
Business minor, and member of the Academic Honors program
at Shippensburg University. He currently works as an
Applications Developer Intern at Global Data Consultants.

5 8 P R O T E U S : A J o u r n a l o f I d e a s
google.com (Schrage 2006). At that time the Chinese
market was still relatively small; although google.com was
operated outside the country, it was still able to meet its
Chinese users’ needs. In 2004 Google was criticized for
the Chinese version of its Google News service. Google
was omitting some sources that would be blocked by the
Chinese internet filter from appearing on the Google
News page within China (The Google Team 2004).
Google responded that there was nothing they could do
about these sites being blocked in China: if it included
these sources, its entire Google News site might end up
blocked. By 2005 the potential of the Chinese market was
obvious, so Google opened a research and development
(R&D) office in China (Google Inc. 2005). Its objectives
were twofold: one was to recruit from the huge pool of
computer science graduates in China, and the second
was to build a team to develop products for the Chinese
market (K. Lee 2007).
In 2006 Google’s problems started when the company

began receiving reports from its Chinese users about
problems accessing and using google.com (McLaughlin
2006). The users reported that google.com was constantly
slow, sometimes painfully slow, result pages had broken
links, and the site was completely unavailable about 10%
of the time. Google News was completely unavailable and
Google Image Search only worked about half the time.
Google determined that this was caused by ISP filtering.
As a result of this bad user experience, it was rapidly los-
ing market share to the Chinese search engine Baidu.com.
Google decided that the only way to provide a good user
experience in China was to launch google.cn. Google.cn
would be hosted in China and subject to Chinese censor-
ship laws, but it would provide a fast and consistent user
experience to the Chinese. Google admitted that coop-
eration with the Chinese government on censorship went
against its corporate values, but it justified the decision by
pointing out that google.com would remain available and
uncensored in China, that Google would alert users when
a query was censored, and that providing some informa-
tion was more consistent with its mission to organize
the world’s information than providing no information
at all. It also expressed hope that by continuing to be a
major player in China it would be able to exert pressure
to lessen censorship.

Google’s justification was not enough for critics who
declared that Google was assisting the Chinese govern-
ment in violating the fundamental human right of free
speech (Reporters Without Borders 2006). Later in 2006,
Google, like other major internet companies operating
in the Chinese market, including Yahoo! and Microsoft,
was called to a hearing before the Congress where their
cooperation with China was compared to IBM’s coopera-
tion with Nazi Germany (U.S. Congress 2006). Google
defended its position in the U.S. government and in 2009
had to defend its position to the Chinese government.
Leaked U.S. diplomatic cables revealed that the Chi-
nese government pressured Google to remove the link
to google.com from google.cn after a member of China’s
Politburo Standing Committee discovered that google.com
was uncensored and searching for his name brought up
results critical of him (Glanz and Markoff 2010). Google’s
staunch refusal to remove the link may have contributed
to what occurred in early 2010.
In January of 2010 Google went public with the news
that its servers had been hacked by a highly sophisti-
cated attack originating in China (Drummond, “A New

Approach to China” 2010). Leaked U.S. diplomatic cables
revealed that the attack was coordinated by the Chinese
government (Glanz and Markoff 2010). Google did not
publicly accuse the Chinese government, but it did reveal
that the objective of the attack was to access the e-mail
accounts of Chinese human rights activists. Its investiga-
tion revealed that at least twenty other large companies had
been targeted in the same attack and that e-mail accounts
of other human rights activists that were compromised by
means other than direct attack had been routinely accessed
by third parties. As a result of this attack, Google’s execu-
tives made the decision to stop censoring their searches
on google.cn. They declared their intent to work with the
Chinese government to reach a compromise; however,
they recognized that violating Chinese law might require
closing down google.cn or even their offices in China.
For several months Google remained in negotiations
with the Chinese government, and on March 30, 2010
it announced that it would begin redirecting searches on
google.cn to their Hong Kong-based site, google.com.hk
(Drummond, “A New Approach to China: An Update”
2010). Although Hong Kong is part of China, it is not
subject to the same censorship laws as mainland China.
The Chinese government did not agree to this arrange-

ment, and so a few days later Google changed from redi-
recting search results to providing a link on google.cn to
google.com.hk. Google continued to offer other services,
like Google Translate, Google Music Search, and Google
Product Search from google.cn. The Chinese government
apparently found this acceptable, and on July 9, 2010,
Google announced that its Internet Content Provider
(ICP) license in China had been renewed (Drummond,
“An Update on China” 2010).
Although Google continues to operate google.cn and
its R&D facilities in China, its conflict with the Chinese
government has had a price. Today Google has only about
25% of the search market in China, compared to the 73%
owned by its main competitor Baidu.com (M. Lee 2010).
Google’s CEO Eric Schmidt summarized the experience
in China in an interview with Charlie Rose:
Rose: What did you learn from Google’s expe-
rience in China?
Schmidt: The thing you learn about China is…
Chinese citizens are very clever, very creative, and
the Chinese government is very, very powerful.

Rose: So you didn’t change government censor-
ship policies by being there?
Schmidt: The evidence is clear that our entry
did not alter censorship policies whatsoever.
Negotiating, Charlie, doesn’t work with the Chi-
nese. (Rose 2010, 39)
Christopher E. Eby: Google in China 5 9
Culture and Censorship
While Google and most Westerners roundly condemn
the Chinese government’s censorship as a violation of
human rights and a tool to suppress debate and maintain
power, the Chinese government strongly defends its posi-
tion and it is supported by most Chinese. A series of sur-
veys by the Pew Internet & American Life Project about
internet use in China from 2000 to 2007 found that “over
80% of respondents say they think the internet should be
managed or controlled, and in 2007, almost 85% say they
think the government should be responsible for doing it”
(Fallows 2008). Although there is a vocal minority, includ-

ing Nobel laureate Liu Xiaobo, that opposes the censor-
ship policy, the apparent popularity of the policy among
the majority suggests that there may be some aspects of
Chinese culture that makes them view censorship favor-
ably. As in the case of all cross-cultural conflicts, care must
be taken to avoid the bias of the self-reference criterion,
which is the unconscious reference to one’s own cultural
values ( J. A. Lee 1966).
Geert Hofstede’s cultural dimensions offer an objec-
tive method of comparing cultural differences in regard
to censorship (Hofstede n.d.). Hofstede’s individualism
scale measures how much a culture focuses on individuals
and their accomplishments as opposed to an emphasis on
group membership and loyalty to one’s in-group. All Asian
countries rank below average on this scale, indicating a
collectivist society, and the Chinese culture ranks lower
than any of its neighbors. Chinese culture expresses this
through the concept of guanxi, a term that describes a
complex network of influence which creates a strong aver-
sion to conflict and an emphasis on harmony between all
members of Chinese society (Robertson, et al. 2008). The
government justifies the censorship of criticism by appeal-
ing to the need to maintain harmony between themselves
and Chinese citizens.

A second cultural dimension that could affect the
Chinese views on censorship is power distance. Power
distance measures the level of acceptance of unequal dis-
tribution of power, and the Chinese culture has a much
higher than average power distance (Hofstede n.d.). This
means that in China power is concentrated in the hands of
a small group of authorities, and questioning the author-
ity’s decisions is discouraged. This reflects the traditional
Confucian values that prescribe a strict social hierarchy
and emphasize complete fealty to those in authority that
Chinese companies are apt to draw on when dealing with
ethical issues (Lu 2009). The combination of collectivism
and deference to authority probably contributes greatly
to Chinese society’s tolerance of internet censorship. As
Robin Li, CEO of Baidu.com, said, “If the law clearly
prohibits certain types of information, be it porn, or anti-
government information, then I’m sure there’s a reason
for it” (Stone and Einhorn 2010, 63).
One final aspect of Chinese culture that is relevant
to Google’s problems in China is a tradition of Chinese
ethnocentrism (De Mente 1993). For thousands of years
China had the most advanced culture of any of its neigh-

bors, and at times the world. This led to deeply ingrained
views that Chinese culture is superior to all others, that
non-Chinese are barbarians, and that China has little to
no need to interact with the rest of the world. Historically,
this led to China being closed, sometimes completely, to
trade for centuries. The industrial revolution has forced
China to open up to the world; however, the ethnocen-
trism remains. Many Chinese strongly resent Western calls
for reform and international pressure when it comes to
issues like Tibetan or Taiwanese independence. A state-
sponsored newspaper’s characterization of United States
Secretary of State Hillary Clinton’s call for freedom of
information on the internet as an attempt at “information
imperialism” is indicative of the Chinese government’s
attitude (BBC News 2010). This pressure has created a
situation where the Chinese government would lose face
if it were to loosen restrictions on censorship and give way
to the demands of foreigners. Thus, Chinese culture has
created the conditions for internet censorship to remain
entrenched in the Chinese government’s policy for the
foreseeable future.
As an American company, Google approaches the
issues for censorship from an entirely different cultural
perspective. According to Hofstede, America is the most

individualistic country in the world. Individualist cultures
do not shy away from conflict as do collectivist cultures.
Therefore, Google has focused on the problem of cen-
sorship as a violation of the individual right of Chinese
citizens to information. America also has a low power
distance, signifying a willingness to challenge authority
(Hofstede n.d.). Unlike the Chinese, Americans do not
focus on harmony between citizens and government. In
fact, Americans regard criticism of the government as a
vital duty of its citizens for the maintenance of a healthy
democracy. As inheritors of a philosophical tradition that
focuses on the “inalienable rights of life, liberty, and the
pursuit of happiness,” Americans are much more likely
to frame the issue of censorship as a violation of human
rights. What a Chinese might consider a small sacrifice
in the interest of peace and harmony, an American would
see as a violation of the fundamental right to free speech.
Combining these factors leads most Americans to the
conclusion that since human rights are being violated by
the Chinese government, the government is wrong and
should be opposed until the situation is rectified. The
disparate cultural attitudes summarized in Table 1 make
it unlikely that any change in the underlying conflict over
censorship will happen soon. Therefore, since Google is
no longer willing to censor its searches, its options for

providing search to mainland China are limited.
ethics of google’s new solution
Even though cultural differences are important, the
situation involves a violation of a fundamental human
right, and so its ethical implications must also be consid-
ered. Although cultural factors make American compa-
nies like Google focus more on the fact that the Chinese
government’s censorship is a violation of human rights,
the Chinese government cannot use ethical relativism to
justify its actions (Donaldson and Dunfee 1994). Nei-
ther should Google appeal to the fact that censorship is
required by Chinese law to justify its cooperation with
the government (Dann and Haddow 2008). However,
in some cases it may be appropriate for business to make
moral compromises when cultural values conflict (Bren-
kert 2009). Therefore, it is useful to apply existing ethical
decision-making models that combine both the cultural
and ethical factors to evaluate whether Google is acting

ethically with its current solution.
One model, proposed by Buller, Kohls, & Anderson
(1997), gives a decision tree based on the three critical
questions listed in Table 2. In answer to these questions
Google’s situation involves human rights violations and,
therefore, is high in moral significance. Google’s failed
attempts to negotiate the Chinese government into allow-
ing uncensored search shows that it does not have much
influence over the situation’s outcome. Finally, Google’s
decision to stop censoring search and the impending
expiration of its ICP license led to urgency in resolving
the conflict. Buller et al.’s model suggests that an avoid-
ance strategy, where Google ignores the conflict, is the
best. Therefore, for Google to move its Chinese search to
google.com.hk to avoid the censorship policy is an ethical
action according to the model.
Another model that can be applied is the HKH model
devised by Hamilton, Knouse, and Hill (2009). This model
consists of a decision tree with six questions (see Table 2).
The HKH model was originally applied to Google’s launch
of google.cn in 2006, and it recommended that Google
not do business in China. However, Hamilton et al noted

that if, in the phrasing of the “questionable practice,” the
definition of censorship was limited to “limiting searches
without the customer’s knowledge,” then Google’s actions
could be justified by the model (152). In 2010 the situ-
ation remained largely the same except for the hacking
incident. Google’s statement that, “These attacks and the
surveillance they have uncovered—combined with the
attempts over the past year to further limit free speech on
the web—have led us to conclude that we should review
Table 1 - Culture and Censorship
China United States of America
Collectivist – Rights of group most important
High Power Distance – Unlikely to challenge authority
Views censorship conflict as a cultural difference
Individualist – Rights of individuals most important
Low Power Distance – Likely to challenge authority
Views censorship conflict as a violation of human rights

Table 2 – Questions in ethical Decision making models
Buller et al. Model HKH Model
1. Is this situation high in moral significance?
2. Do I have a high level of influence over the
outcome of the situation?
3. Is there a high level of urgency to resolve the
situation?
1. What is the questionable practice (QP)?
2. Does the QP violate laws that are enforced?
3. Does the QP simply reflect a cultural difference
or is it a potential ethics problem?
4. Does the QP violate the firm’s core values
or ethics code, an industry-wide code, or an
international convention?
5. Does the firm have leverage to do business

the firm’s way?
6. Will doing business the firm’s way improve
practice in the host’s market?
Christopher E. Eby: Google in China 6 1
the feasibility of our business operations in China,” shows
that they decided to expand the definition of censorship
in a way that made them go along with the original rec-
ommendation of the HKH model (Drummond, “A New
Approach to China” 2010). Thus, according to both mod-
els Google’s current solution to the cultural conflict over
censorship is ethical. However, is it a good business move
Analysis
One view of Google’s effectual withdrawal from the
search market in China, which essentially takes them
back to where they started from in 2006, is that it is a
defeat for Google. This view certainly has some merit; it
is highly unlikely that Google would be essentially with-
drawing from the Chinese search market if it had 80%

of the market instead of less than 30%. Google’s main
competitor in China, Baidu.com, has shown few signs
of slipping from its dominant position, and so Google’s
withdrawal can be seen as a savvy business move which
allows them to exit a market where they were losing to the
competition while claiming to be taking the moral high
ground. However, this view is contradicted by Google’s
claims that it has entered China for the long term. In 2007
Eric Schmidt said that “The Chinese have 5,000 years of
history. Google has 5,000 years of patience in China” (K.
Lee 2007). This view also ignores some of the positive
aspects of the current situation.
For Google, one of the most important positive out-
comes of the compromise is that it resolved the conflict
with the Chinese government, at least temporarily. One
of the most important rules for operating in China is to
“understand the market, but work with the state” (Paine,
“The China Rules” 2010, 2). Google’s stance against the
censorship policy puts the Chinese government in a hard
place; on one hand, Google is a large corporation that can
bring large amounts of capital and technology into the
country, but on the other hand it does not want to let a
Western company dictate its domestic policy. The current
solution allows the Chinese government to save face by

permitting Google to continue to operate google.cn and
not censor searches, while letting the government maintain
that Google does not influence its decisions.
Even though Google has withdrawn from the Chi-
nese search market, its offices in China are still open and
it can still host non-search services on google.cn. If it
were to host service on an external site, they would have
to run through the Chinese filters and might suffer the
same slowness problems that were crippling google.com
in 2006. Furthermore, it still has access to the extremely
important mobile market and can still employ talented
Chinese computer science graduates. Thus, Google can
concede the search market to Baidu while still maintaining
an important presence in the Chinese market.
Perhaps most importantly, the current solution allows
Google to maintain the integrity of its core values. Google’s
Vice President of Global Communications and Public
Affairs admitted that self-censorship “runs counter to
Google’s most basic values and commitments as a company”
(Schrage 2006). This dissonance between Google’s stated
values and its actions is dangerous since self-governance
according to chosen standards is essential to maintaining

a strong ethical culture (Paine 1994). By no longer cen-
soring its searches from China, Google’s core values and
its actions have been realigned.
Perhaps the most important lesson that can be learned
from Google’s experiences in China is that cultural con-
flicts over ethical issues do not have to result in mutually
exclusive situations. While it may appear this way, Google
is not faced with a choice of operate in China and “be evil”
or don’t operate in China and uphold the corporation’s
ethical culture. Although Google’s current solution is not
ideal, it is a creative compromise that allows it to maintain
a significant presence in China while also upholding its
ethical culture. When faced with similar cultural conflicts,
other multinational organizations would do well to also seek
creative compromises like the one that Google has found.
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