Case Study Of Google's Relationship In China

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When operating abroad, companies are required to comply with the laws of the nation in which they do business, however, there is often a conflict between country law and company ethics. Google established its operations in China in 2006 and brought its Western business culture to the People’s Republic of China (PRC). As a condition of doing business in China, Google agreed to comply with the Chinese government’s censorship policies and block search results on subjects that were considered politically sensitive. The company was criticised for this decision, as self-censorship goes against Google’s traditional corporate values. From the beginning, Google’s relationship with the Chinese government was delicate.

Many of Google’s Chinese employees
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Decisions in China are taken collectively and hierarchy is of the utmost importance. China places a lot of value on conformity and unicity – one of the aspects of the collectivist mind-set developed in China since 1949 when Mao Zedong and the Communist Party established the People’s Republic of China. On the other hand, the United States is an individualistic culture in which business decisions are normally made by individuals. This cultural divergence can clearly be seen in Google’s decision to leave mainland China in 2010. This decision was taken solely by the top management, which shocked Google’s Chinese employees as in a group-oriented society, decisions are taken by the group and are structured around the needs of the…show more content…
Through this article, we can see that understanding the culture of a country in which you are conducting business is paramount to the success of your business venture. This document also highlights the differences in business culture between China and the USA, which can be summarised as follows:

• USA: An individualistic culture with a more informal social structure with a more direct form of communication (low-context culture) and where rules are important (Mono-chronic). It is a culture in which conducting business creates the base for relationships.
• China: A highly collectivist, group-oriented and relationship-based culture, where social structure is formal as well as hierarchical. The style of communication is more subtle and indirect (high-context culture), in which long-lasting, trust-based relationships create the conditions to conduct business.

Cultural awareness is essential for international business success. Google has been attempting to re-establish its presence in China since 2012 because of the huge market potential. Learning from past experiences, the company has softened its approach and is now more accepting of Chinese culture and business

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