Thecase of Yahoo! best describes the influence of power on decisionmaking and the operation of multinationals in foreign countries. Themanagement of the company faced a lot of uncertainties as theyattempted to venture into the Chinese market. The Chinese governmentcreated vague laws on the use of the internet that contributed to thedifficulty in differentiating between what is right and wrong. Thecompany confessed that it was in a dilemma because on one side, theypromised their clients a trustable relationship and on the other,failure to comply with government requests could cause more trouble.The problems emanated from the possibility of being subjected tounfavorable business policies. Customers and governments are the mostvital trading partners to any multinational organization. Themanagement had to ensure that it had clean books with them since theyboth determine the success of the firm (Yahoo! and Customer Privacy).
Second,the influence of power, in this case, can be attributed to the factthat the company, especially being a multinational one, is on aforeign ground where the management`s ability to make autonomousdecisions is limited. It is likely that the global governments maypersuade the companies to meet their wants sometimes at the expenseof the citizens. States mostly put international companies on termswhere they gain high advantage domestically (Yahoo! and customerprivacy).
Anothergood illustration that reveals the influence of power within suchcases can be seen within Yahoo!’s rivals such as Google. Thecompetitors also experienced uncertainty when operating in China.Google had to make certain unwarranted changes in its search engine.In August 2002, Google was forced to disable its search engines ofthe Chinese Internet users for two weeks. After reestablishment, itis clear that the company had made some adjustments since the clientscould not find certain topics. Such changes serve as proof ofgovernment’s censorship. Google also participated in the launchingof the Chinese news service. During the Launch, the companyvoluntarily excluded information from sites that the governmentconsidered subversive (Brett & Grogan, 2006).
Asdescribed in the case, Yahoo!’s management and decision-makingprocesses are heavily impacted by external influence because theissues are related to privacy. The lack of an appropriate system ofhandling such situations involving the governments may result inenormous losses. A good example is when the company was hacked. Thesensitivity of the issue of privacy on clients’ information isevident from the significant loss of internet users. After thecompany’s 500 million accounts had been hacked some time back, mostof their services such as emails were severely affected therefore,the organization experienced a 30% decrease in its number of users by2015 (The Indian Express, 2016).
Secondly,the problem of power influence was visible in the U.S. Yahoo observedthat the government, during the press releases, requests userinformation from their database (Bump, 2013). Such instances lead tomanagement indecisiveness as they put efforts to maintain honor andtrust with their clients. The organization, consequently, is forcedto design a more secure protocol to use when revealing theircustomers’ accounts. In this case, power influences force the teamto ensure that all requests pass through a court order. The poweremanates from realizing that there are additional difficultiesexperienced whenever the company is required to make decisions withregards to the disclosure of information (Brett & Grogan, 2006).
Powerrequires the management to consider potential risks by examining theperils in the form of massive losses. First, the administration isforced to evaluate the possible losses that could come fromlitigations and payment of damages to the affected individuals. Onthe other hand, they are compelled to weigh the repercussions fromfailure to provide the requested information. Specifically, it raisesthe need to consider the effect of harmful policies imposed by thegovernment on the competitiveness of the business. A good example isa situation that occurred in September 2009. Wu Jiquan, by then hewas the head of Ministry of Information Industry in China, claimedthat the state’s ban on internet investments on internetinvestments encompassed search engines such as Yahoo! Although theissue was corrected after a few days, it was clear that powerinfluenced the decisions made by the government officials. The issuebest describes the confusion within the management as it tried toevaluate the best course of action as well as the most appropriatestrategy to minimize the risks associated with each rule implemented(Yahoo! and customer privacy).
Thefirst implication emanates from failure to provide the requestedinformation. The company faces the possibility to encounter ruthlessrepercussions as the government can retaliate in the form ofunfavorable policies. Such policies can hamper the competitiveness ofthe organization and in the long run, reduce its profitability. Theproblem here is that the Chinese government needs the company tocomply in unclear circumstances. Perhaps, the government could befeeling that the issue they are investigating is beyond Yahoo!’slevel of clearance, for example, an urgent matter of nationalsecurity. Besides, given that the government approaches Yahooindistinctly, it could mean that it lacked enough reason to justifydemanding access to the account (Yahoo! and customer privacy).
Thesecond implication emanates from the situation where Yahoo! Companycomplies. In such a situation, a customer may sue the organizationfor the breach of privacy. Therefore, the management is forced toperform such actions through court orders to minimize its risk ofexposure. Such situations create confusion since the elements ofpower faced are visible. The specific components of power likely toimpact the outcome of the case are the particular departments of thegovernment. The idea here was to identify the specific elements ofpower likely to have an impact on the possible outcome of the case.Google’s censorship, according to China’s government, broughtproblems for it even in the US. People observed that the organizationdisrespected human rights as provided by the citizen’s freedom(Wilson, Ramos & Harvey, 2007).
Thirdly,it is possible that either of the decisions could lead to thegovernment considering the company as uncooperative hence, imposingstrict restrictions. In the case where the corporation complies andis considered unethical, it faces the risk of a legal lawsuit fromthe users. In such a case, the company remains in a destitutesituation since it cannot request for assistance from the government(Yahoo! and customer privacy).
Thebest way to approach such a situation is by seeking a court orderbefore submitting to a request by any government body. Obeying to anadministration’s request will be solely the dictation of thegovernment. The approach considers the fact that the courts are alsocomponents of power, and elements of the regime. The approach servesthe best interest of the company since it complies with the state`sdirection. Besides, it also considers the rights of the citizens whoare, of course, the reason why the company can make a profit (Yahoo!and customer privacy).
Byusing the courts, the company’s actions are government orientedsince the approach eliminates the risk of lawsuits from the customer.Again, taking into account the dynamic nature of the Chinesegovernment, it is imperative for the company to be cross-culturallysensitive depending on the demands of the Government. For example,Google agreed to the regime’s request mainly due to the idea ofculture and the way the censored words affected Chinese internetusers. As a result, the best approach is to assume a neutral positionwithout any intent in the circumstances. Yahoo!’s case needed tofollow the same concept of not appearing in contempt with either ofthe parties beforehand, and that means it is better to stress for avalid court order (Thompson, 2006).
Brett,J. & Grogan, C. (2006). Google and the government of China: Acase study in cross-cultural negotiations. KellogCase Publishing.Retrieved on 29 December, 2016 fromhttp://www.kellogg.northwestern.edu/kellogg-case-publishing/case-search/case-detail.aspx?caseid=%7BF30BE8F3-354F-4D21-AC85-62C4455625CC%7D
TheIndian Express. (2016). Yahoo’s 500 million accounts breach willonly make its problems worse. Retrieved on 29.12.2016 fromhttp://indianexpress.com/article/technology/social/yahoos-500-million-email-hacking-will-only-make-its-problems-worse/
Yahoo!and Customer Privacy (A). Case Study.
Wilson,K., Ramos, Y. & Harvey, D. (2007). Google In China. US: DukeUniversity.
Thompson,C. (2006, April 23). Google’s China problem (and China’s GoogleProblem). TheNew York Times Magazine.Retrieved on 29.12.2016 fromhttp://www.nytimes.com/2006/04/23/magazine/23google.html
Bump,P. (2013, Sep 6). When yahoo gives user data to governments, mapped.TheAtlantic.Retrieved on 29 December, 2016 fromhttp://www.theatlantic.com/technology/archive/2013/09/here-are-countries-yahoo-most-likely-reject-government-subpoenas/311360/