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Weighing Google's China decision

March 26, 2010

Conundrums of what to do when personal convictions collide with profit potential are playing out in full color in Google’s decision this week to pull out of China and the subsequent developments of other companies considering similar action.

Google’s decision was heavily influenced by co-founder Sergey Brin, who has a better understanding than most Americans of what it’s like to live under an oppressive government. Anti-Semitism in Russian prevented Brin’s father from following his dream of becoming an astrophysicist, so his father immigrated to the U.S. and becoming a math professor.

Operating in China felt too much like Russia, Brin told The Wall Street Journal. See the story here.

Google, which said it was hacked in China, isn’t the only company reevaluating its ties with growing giant. GoDaddy and Network Solutions, both of which register domain names, say they’re leaving China, too. An article about their decisions is here. And Dell is considering plunking a hardware factory in India instead of China over security issues.

Google’s stature as an authority on Internet neutrality got a boost from the China decision, and eventually will result in profits outweighing the potential it had in China, says Scott Kennedy, director of Indiana University’s Research Center for Chinese Politics and Business, which analyzes the world’s interaction with Chinese politics and economy.

Google's decision also sits fine with Ed Wheeler, president and CEO of Christian Theological Seminary in Indianapolis.

Wheeler agrees with Kennedy that executives seldom make decisions without considering their own convictions. While Google was losing valuable trade secrets to the hackers, Brin’s convictions also are consistent with Google’s motto of “Do no evil,” which in the case of China meant severing ties in order to protect individual rights, particularly those of political dissidents.

Wheeler, in fact, believes that executives occasionally need to take a stand against a corporate culture that drifts into moral hazards. Wall Street would be a different place today had more execs bucked the tide several years ago, he reminds.

Still, Wheeler adds, “Ethical decisions are rarely in black and white. Most decisions are in shades of gray.”

How do you feel about Google’s decision? What about the broader point of weighing personal convictions against potential profit when the two are in conflict?

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