Has Google Implemented a Strategy That Serves All Stakeholders - Case Study Example

Group Case Study: Google Name Professor Institution Course Date Group Case Study: Google Executive Summary Social responsibility and business ethics have proved to be a challenge to many businesses especially due to increasingly competition based on profit (Arjoon 2005, p.3). However, due to pressure from consumer to boycott businesses which majorly focus on profits, companies are increasing adopting strategies which embrace corporate social responsibility. BBC News (2007) pointed out that Google Inc is one of the major companies which have been criticized in the past for focusing on profits and it has considered changes in the recent past. In this research, the paper will focus on whether Google Inc has implemented a strategy which serves every stakeholder and analyze how it can respect the privacy of customers and still uphold its profitability. Also, the report will describe and explain how the growing global regulation of the privacy will affect operation of Google Inc. The paper will rely on secondary sources to conduct its analysis. Table of Contents Executive Summary 2 Table of Contents 3 Introduction 4 Has Google implemented a strategy that serves all stakeholders? 4 How Google can respect privacy and still maintain its profitability 7 How the increasing global privacy regulation will affects the operations of Google 11 Conclusion 12 References 13 Introduction In the current times, corporate social responsibility and business ethics have drawn a lot of public and media consideration due to the noticeable significance business sector (Arjoon 2005, p.3). Katherine (2007, p.16) claimed that Google as a market leader in technology, especially internet-based product and services has been receiving coverage on the basis of compliment and criticism touching on issues like focusing on profits, censorship of the search, privacy, and tax avoidance. However, it is the criticism and threats of boycott that has challenged the company to try to convince its customer that its objectives is not just about making a profit but also to solve the social problems facing humanity (O’Reilly 2012). Therefore, based on existing literature such as case studies, this paper will find out whether Google has adopted a strategy which serves every stakeholder and recommend how Google can respect privacy and at the same time main the profitability. In addition, the report will explain how the growing global regulation on the privacy affects the operation of the company. Has Google implemented a strategy that serves all stakeholders? The question of whether Google implemented a strategy which serves every stakeholder has often drawn a heated debate among market analysts, scholars and management experts. While other thinks that Google has done this, others argue that the company has not reached a point where it can be regarded to have implemented a strategy which serves every stakeholder. Meyer (2016) claimed the firm’s present strategy for business and CSR has been considered satisfactory. On the business perspective, the company has tried to serve all the stakeholders by diversifying their products and services (Meyer 2016). Google offer platform such as search engine, web browser, advertising, social media (Google+), emailing, video watching and sharing, operating system, information storage, language translation and map among others. Initially, the core business of Google was to provide a search for an internet but has diversified into other portfolios. The company has tried to satisfy every stakeholder’s need that uses its services by collecting their targeted information or ads or search results to improve and customize the Google search based customer needs (Ferrell, Fraedrich & Ferrell 2016, p. 463). The company also offers browser platform where its entire stakeholder can read, contribute and publish articles and general information. Since its inception, Google Chrome, has advanced and is now ranked as the second most popular browser globally with a market share of 25% (Ferrell, Fraedrich and Ferrell 2016, p.464). Research has established that this web browser is so popular due to its fast loading speed, enhanced security, simplistic design and consistent update Google also serve stakeholders in the video market. Ferrell, Fraedrich and Ferrell (2016, p.464) stated that the company bought YouTube, a video sharing website for $1.65 billion in 2006. This enables the subscribers to upload their videos and share it with others. YouTube has created several platforms for users such entertainment and marketing of their products (Ferrell, Fraedrich and Ferrell 2016, p.465). Even though, Google has put more efforts to serving all the stakeholders, it is yet to find a common strategy for that purpose. Meyer (2016) found that stakeholders of Google Inc are varied and all them subscribes to a wide collection of the products which the company offers. Google diversification consists of Google Search, software, online advertising technologies and cloud computing. The growth of Google’s product has seen increase in its stakeholders to include users, employees, advertisers and other customers, investors, governments and communities. While the company has tried to understand the needs of storing their information and monitoring the trend of what the customers like to use, the company has also violated their privacy. Similarly, BBC News (2007) posited that the company has been accused of tax avoidance, copyright violation and censorship. It means that as much as stakeholders are not only interested in products and services offered by Google, they are also interested in the company’s business ethics and how it takes corporate social responsibility into consideration. A research by Ferrell, Fraedrich and Ferrell (2016, p. 461) found out that Google search collects users’ information without their consent. The company normally targets the search results of the users and targeted ads to get the information about the user. While the company explains that they do this to improve services offered to tailor services to every user, the act violates antitrust laws. The conduct has created a concern among consumers owing to the fact that cyber attacks has tremendously increased in the 21st century. Ltifi and Gharbi (2012, p.7) contended that there has been an increased worry among the consumers that their personal information could be compromised or used to fraud them. Similarly, there have been complaints about hacking of Gmail accounts by unknown people in such circumstance; users have lost their personal details to the hackers. Stakeholders have also complained even sued the company for copyright breach. For instance, a study by Ferrell, Fraedrich and Ferrell (2016, p. 461) established the Google had been sued Viacom Company after finding its copyrighted video on the YouTube site. The company also has been at loggerheads with Governments which are also its stakeholder. The Chinese government has been in the forefront of censoring Google search engines. However, the company has been opposed to this and even started self censoring of various sites. Some authors have also complained of Google digitizing their books without their authorization, thus exposing the company for copyright issues. Such stakeholders expect their intellectual property to respected and compensated. The outcry means the company is yet to implement a strategy which satisfies all its stakeholders. It also implies that the company is using shareholders’ theory and is only concerned about maximizing profits without considering the interest of the stakeholders (Picou & Rubach 2006, p. 55). Research has found out that security and privacy issues in internet browsing affect consumer behavior. Some of the issues that discourage consumer and changes their attitude towards online shopping is that their personal information is collected or phished by the website of cyber criminals (Ltifi & Gharbi 2012, p.7). How Google can respect privacy and still maintain its profitability From the research, it is apparent that Google Inc can respect the privacy and still get profitability. However, it will take time to achieve this. Ferrell, Fraedrich and Ferrell (2016, p.461) pointed out that Google Inc depends on tracking customer information to maintain the profitability. From 2011, Google Inc has been attempting on reviewing its privacy policies in quest of complying with consumer requirement. Ferrell, Fraedrich and Ferrell (2016, p. 461) claimed that in 2012, the company reviewed its privacy policies and gathered and combined every consumer information it has collected from different services such as search engine, Google+, Gmail, YouTube and android platforms. Google argued that its simplified and reviewed privacy policy will be effective as users will only have one privacy policy to read as opposed to having policy for every product (Jeffrey 2008). People questioned whether the new policy on privacy was invasive. Nevertheless, the proponents of new policy supported saying that Google utilizes the information to better their services for the consumer. In addition, it enables the company to stay competitive among its rivals like Facebook and Apple. On the other hand, opponents have been worried with the simplicity with which they have managed to review and combine its privacy policies, arguing that it might predict trouble for consumer and their privacy rights (Jeffrey 2008). The consumer concerns became grave due to the fact that many people rely on Google for various services. The US government and the European governments asked Google to explain its changes on the policy on privacy in a more detailed and understandable way. The company formulated a 13-page letter providing answers to the governments’ questions (Ferrell, Fraedrich and Ferrell 2016, p.469). In its response, Google claimed that every user is provided with alternative of turning off particular features which gather the users’ information. Such new policy on privacy also pointed out that it will not affect the amount of data the company gathers or removes and that firm stays dedicated to the user privacy. The option of turning of a functionality that collects data is an important aspect of how the company can respect the privacy of the user and still keep its profitability (Jeffrey 2008). In most cases, the user often wants to search the internet without their information collected. In a situation where consumers learn that their information is collected, they become concerned of using Google products. In this way, they might move to other browsers and search engines such as Bing or Ask.com thus Google losses profitability. The company can also respect the privacy by conducting a survey about what the customers’ need. In the process, the company asks for the consent of consumers if they can use their information in making informed decision. Consumers who reject their information to be used should be respected. On the other hand, the ones who accept their information be used for survey should also be assured that such details will not be leaked to other parties or hackers. The company can also respect privacy by deleting the information it already in its database (Ferrell, Fraedrich & Ferrell 2016, 471). When the company says it stores user information, some of these consumers fear of using Google services. The few customers with a bad attitude towards Google products can influence a large number to boycott the company’s service hence hurting its profits. Google can respect privacy and maintain its profits by seeking permission of the authors or entering into a contract with the authors of the books before digitizing their work. Google had been blamed by authors of infringement of the copyright as a result of digitizing their books without their consent. Nonetheless, Google won the case on the context that it was just the snippets of the book that could be viewed. Ferrell, Fraedrich and Ferrell (2016, p.469) opined that the judge ruled that Google’s use of the copyrighted material was fair. The company then reached an agreement with the authors and publishers. An agreement between them was a win-win situation because both owner and Google benefits in financial terms. Meyer (2016) has established that when intellectual property is compensated by the user (Google), they feel valued and even motivated to create more products or services. The company can also be respecting the privacy and uphold its profitability if they move away from using shareholders theory and adopt stakeholders theory. Hagendorff and Clacher (2012, p.256) asserted that the stakeholder theory has been fronted by Milton Friedman and argues from capitalistic and maximizing profit perspective. In his argument Friedman claimed that business only has one social responsibility which is to utilize its resources and take part in the activities which raises its profits while staying within the law (Mujahid & Abdullah 2014, p.183). However, using the perspective this perspective has landed Google into trouble with many stakeholders, including the users, the government and other companies. Therefore, shareholders theory has been recommended as a better alternative if Google wants to respect the privacy and keep profitability. According to Brammer, Jackson and Matten (2012, p.7), stakeholder theory holds that the responsibility of a business is to serve wider societal interests far past increasing the shareholders’ return alone. The stakeholder theory was fronted by Edward Freeman, who argued that the moral obligation of a manager is to consider balancing the interest of every stakeholder (Freeman 2003, p.34). The argument is that the financial success of an organization relies on the stakeholders hence their interest must be considered. In this perspective, their interest is the respect of their privacy (Harrison & Wicks 2013, p.98). Therefore, Google needs to stop tracking user information in their search engine, Google maps, android phones and Gmail. When the company respects customer privacy it improves its images, hence attracting more customers to the business. Another findings made by different literatures found out the CSR improves the images of the company, hence increased returns by about 13.2% (Queen 2015, p.185). More literature indicated that the company’s level and attitude towards CSR leads to increasing revenue. Queen (2015, p. 186) argued that the society is likely to view companies which involve in CSR to be caring for their problem. With this, the image will attract more customers hence improving shareholders wealth. How the increasing global privacy regulation will affects the operations of Google Google is multinational hence it has several regulations and rules to conform. Every country which Google operates has different internet legal requirements. For instance, China and the US have different laws which the company needs to balance if it has to operate successfully. Increase in regulation of the privacy in China has tremendously affected the freedom of Google operations in the country (Reisinger 2012). Government of China has enacted strict Internet which censors of the website which they deem do not abide by their content policies. As the world most populous nation in the world, there was an opportunity for Google to increase customer base and sales. When Google made an entry to China, the company faced many several obstacles. Censoring some sites means the Google would not be able to offer many services that it had intended thus low profits. Regulation also affects Google in that it prevents the company from living up its mantra or slogan. Chinese government often censors some cites based on its policies. The company’s slogan “Don’t be evil” implies to allow the information to be accessible globally. However, allowing China to block some of the searches contradict Google’s slogan (Ferrell, Fraedrich & Ferrell 2016, p.375). This means the company does not fulfill its promises in some countries. Users in some countries might feel that the company is not giving value for money hence turning to competitors. The increasing global privacy regulation affects operations of Google because it confuses Google staffs hence reducing the performance. As mentioned earlier, the Chinese internet law contradicts that of the US. While China censors its internet, particular website, the US does not censor Google services because it considered such practice as a breach of the user’s right (Reisinger 2012). Regulation of the privacy made Google to lose market share to competitors. The regulation gives local industry upper hand in terms of competitors making it hard for a foreign company to increase its profit. Censorship made it difficult for Google to compete. Ferrell, Fraedrich & Ferrell (2016, p.374) contended that the company, therefore developed Google search in Chinese version and hosted outside the country in an attempt to escape censorship. However, it was taken through Chinese “Great Firewall’, slowed and finally blocked. The situation made Google to lose share of the market to local competitor, Baidu (Ferrell, Fraedrich & Ferrell 2016, p.374). As a result of persistent censorships and cyber attacks, Google withdrew from Chinese market even after gain market share and moved to Hong Kong. Increased internet regulation on privacy has also put Google into a backlash with the US Government. Ferrell, Fraedrich and Ferrell (2016, p.374) pointed out that when the company resolved to self-censor its services in China, its leadership was called in Congress to come justify their actions due to the fact that censorship was not its universal principle. The consumer criticisms about Google privacy policy have made Congress to think of putting new laws that control the information companies collect and how they are used (Acohido 2008). Google being a company which depends on user information to improve its products could be affected in terms of quality. The approach to the law could give Google competitors an edge in the market. With many law passed in different countries and States, Google will require to watch closely about its services and ensure they fulfill the standards set by the governments (Acohido 2008). Conclusion The success story of Google is unmatched among Internet-based product and service providers. The company was established as search engine firm and grown and diversified to become leading Internet organizations globally. Whilst there could risks of expansion and diversification, the company seems to benefit from such strategy to remain competitive in the market. Despite the success, Google faces numerous challenges, particularly on privacy. From the debacle move of moving into the Chinese market, to the tracking of the users’ information and unlawful digitizing books, Google has considerably faced criticism from privacy advocates who thinks the company has highly been involved in infringements of the copyrights. To improve its images, this paper recommends that the company must seek the opinion of the customers on how to improve its privacy policy if it has to keep its profitability. 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