Companies that operate at an international level often face considerable challenges arising due to political crises or significant changes in the legislation. In some cases, these organizations have to confront a fundamental ethical dilemma that does not have a winning solution. Overall, Yahoo had to cope with such difficulties when it began to operate in China since this organization was forced to deviate from the ethical principles that it proclaimed. These are the main issues that should be examined in greater detail.
It should be noted that Chinese government practices Internet censorship. For instance, the state can deny access to the content of various websites (Human Rights Watch, 2006, p. 3). Similarly, the confidential information of users can be disclosed to the law enforcement agencies (Human Rights Watch, 2006, p. 3). In turn, companies that wanted to operate the Chinese market had to comply with the requirements set by the government.
Therefore, Yahoo had to resolve a dilemma when the ultimatum of the Chinese government was presented to them. For instance, this company could lose the growing market of China, and it could be important for the financial performance of this organization. Yahoo intended to operate with thousands of Chinese advertisers that could bring extra revenues to this corporation. Nevertheless, the company could also compromise its ethical integrity. The cooperation with the government that violates the freedom of speech could tarnish the reputation of the company for a long time. These are the main aspects of this dilemma.
This organization chose to yield to the demands of the Chinese government. In particular, the organization agreed to block the access to the website prohibited by the state. However, the company informed users that some pages were not available due to governmental restrictions (Human Rights Watch, 2006, p. 3). In this way, they indicated that they did not want to deceive the users. This is one of the points that can be made. Nevertheless, the company agreed to disclose the information about Chinese dissidents (Human Rights Watch, 2006, p. 3). This is why it has often been criticized by non-governmental organizations and American senators. The management of Yahoo justified this decision by saying that they had to abide by the laws adopted in a particular country. So, they laid stress on the legal reasons underling their decisions. Yet, they did not say that their cooperation with the Chinese government could endanger the lives of many people.
It is possible to offer a different solution to this situation. For instance, the company could have moved to Hong Kong, instead of operating in Mainland China. One should keep in mind that in Hong Kong the freedom of speech is better protected (Human Rights Watch, 2006).
The main benefit of this approach is that the company would have retained a part of the Chinese market without compromising its ethical integrity. When discussing this situation, managers should focus on such a concept as corporate social responsibility. It implies that a company should be concerned with the impacts of their activities on the major stakeholders such as clients, employees, or governmental organizations (Rendtorff, 2009, p. 137).
More importantly, the supporters of corporate social responsibility believe that ethical behavior is critical for the long-term sustainability of a business (Rendtorff, 2009, p. 137). This notion is important for business administrators. Overall, customers can be viewed as the most influential group of stakeholders whose decisions and attitudes can shape the financial performance of a business. In turn, Yahoo did not pay much attention to the needs of these people. These are some of the main points that can be considered.
Furthermore, this organization was criticized by American politicians. For instance, one can mention that the representatives of Yahoo had to testify in the U.S Congress (Human Rights Watch, 2006, p. 3). Overall, they were accused of supporting totalitarian practices of the Chinese government. Overall, the reputation of the company was badly damaged. This is one of the detrimental effects that can be distinguished.
More importantly, Yahoo does not occupy leading position in the Chinese market. These are the main details that can be singled out. This case can be singled out among others because it shows how political and ethical constraints can prompt a firm to abandon its ethical principles. Ethical considerations have been selected because under such circumstances, the outcome depends on the moral integrity of a person and his/her views on justice.
Overall, this discussion indicates that moral choices are critical for effective functioning of a business. The dilemma faced by Yahoo can be described as the conflict of interest. The management chose to focus on the financial performance, but they neglected the needs of clients. This is one of the reasons why this organization was criticized by various people. Additionally, this case illustrates the importance of corporate social responsibility for the work of businesses. In particular, it shows that ethical behavior is vital for financial performance of a business. These are the main arguments that can be advanced.
Reference List
Human Rights Watch. (2006). “Race to the Bottom”: Corporate Complicity in Chinese Internet Censorship. New York, NY: Human Rights Watch. Web.
Rendtorff, J. (2009). Responsibility, Ethics and Legitimacy of Corporations. Copenhagen, Copenhagen Business School Press. Web.