Business Communication Chapter 1 The Changing Environment For Business Teaching Note The Changing Environment

Chapter 01 – The Changing Environment for Business

Teaching Note

Chapter 1

The Changing Environment for Business

This chapter gives you an opportunity to cover material with your students that will

help set the tone for them to be able to see communications as a necessary and

strategic function of business. First and foremost is the information about changing

attitudes toward business in the United States. I have included some graphic

representation of the data that you can use to make these points come alive in the

classroom – see also the included PowerPoint slides.

Using video clips from popular media not only brings many of these concepts to life

for students (in an often humorous and entertaining manner!), but also helps to

hammer home just how important communication strategy is in our daily lives. For

this chapter, I usually also show the annual meeting scenes from both Oliver Stone’s

Wall Street and Danny DeVito’s Other People’s Money. Both films are available

throughout the United States and in many other parts of the world as well. You

should even be able to find the appropriate scenes on YouTube. There are also many

applicable clips from The Office and from Office Space that could be useful both in

this chapter and in others.

• The scene from Wall Street is in the second half of the film. It includes an

introduction by Richard Dysart followed by the famous speech to a group of

shareholders by Michael Douglas’s character, Gordon Gekko. The

• The depiction of business is a choice between bloated/bureaucratic or

charming/corrupt; neither is acceptable. You will want to point out that the

Gekko character is representative of a typical outsider – an appealing

characterization in both literature and film. Also note that the public tends to

prefer entrepreneurs to corporate drones. You might also want to discuss

how these perceptions have changed in recent years. For example, to what

Chapter 01 – The Changing Environment for Business

Teaching Note

• The clip from Other People’s Money is toward the end of the movie. In this

A Note about Use of Literature and Film

Many of us involved in this area have some background in literature or at the very

least the liberal arts. What I have found is that exposing business students,

particularly MBAs, to this material can be a rewarding experience in that at least

some of them have just never had the opportunity to read something as gruesome as

Upton Sinclair’s The Jungle (which came out in a marvelous new edition in 2002

Other Topics

For those of you who have an international bent, you will want to spend more time

on the section about globalization. I have had the opportunity to teach in both Asia

and Europe so I usually try to broaden students’ perspectives about how much more

international companies and managers need to be today based on personal

experience. But, you don’t need to have personal experience to talk about the

international business environment. Everyone takes this idea for granted today.

Just try to come with some of your own examples. If you are using this book outside

of the United States, you will obviously want to tailor it very specifically to your

home country.

Another aspect of the international business environment that has emerged in

recent years is a backlash against globalization. There are many examples of

negative feelings towards globalization, and if you watch for news reports in the

Chapter 01 – The Changing Environment for Business

Teaching Note

I conclude the session with a PowerPoint slide that lists my five ways to compete

(see the end of this chapter). These give you the chance to wrap-up the session and

to end with some positive information after what can be a gloomy discussion.

Teaching Note

Google Inc.

Purpose of the Case Study

1. To highlight the conflict that arises as a company attempts to balance socially

responsible corporate principles with the need to maintain growth and

profitability

2. To provide an example of how a company decision to cooperate with a

government that restricts personal liberties affects reputation

3. To encourage analysis of a business strategy founded on the limited release

of information

Identify the Business Problem

On January 20, 2006, Google announced that it would begin operations of a new

website in accordance with Chinese Government requirements for censorship of

officially objectionable material. Although the company’s primary U.S. competitors

had already begun similar operations, Google’s move brought extensive criticism

from media, government, and NGOs. The higher level of press attention resulted

from allegations that this move was highly contradictory with Google’s corporate

motto of “Don’t Be Evil.” Many reports claimed that Google had lost sight of long–

standing corporate values in the pursuit of profits.

Chapter 01 – The Changing Environment for Business

Teaching Note

Google, as well as Yahoo and MSN, chose not to appear at the hearings. As

government attention remains focused on issues of privacy and human rights on the

Internet, Google will be required to respond to these accusations.

Google has released public statements that argue the benefit of providing some

information over having none available at all. These announcements have done little

Identifying Critical Constituency Issues

Google has a number of important constituencies affected by the decision to operate

in the Chinese market despite censorship requirements. To respond appropriately

to all parties involved, Google must identify issues of concern to each group and

develop a plan to address them. The significant constituents and their issues are:

• Users. Google’s profitability is completely dependent upon advertising

revenues, and therefore usage rates are of primary importance. The public

attention received by Google’s decision to enter the Chinese market suggests

that users are concerned with the company’s actions and whether they align

• Shareholders. Google must actively manage the perception of the company

from the viewpoint of both shareholders and analysts. Although stock price

initially rose following the 3 announcement of the Chinese site, in the period

following this preliminary gain stock price has steadily slipped. While a large

portion of this decline in equity is likely tied to a lower than expected

earnings release in the 4th quarter of 2005, concerns of an impaired

reputation are growing. Google must assure investors that the company’s

Chapter 01 – The Changing Environment for Business

Teaching Note

• Employees. The unique corporate culture at Google has been a point of pride

for employees. Protests caused by the company’s move into the Chinese

market have the potential to damage this reputation. Employee talent has

• U.S. Government. The U.S. Government has been one cause of the attention

surrounding Google’s decision to enter China. The company’s relationship

with the U.S. Government is essential to being able to pursue further growth

both domestically and internationally. Not only is the company facing a

subpoena for user records, but the company must also consider the

• Chinese Government. The problems that have developed since entering in

the Chinese market have led to a tenuous relationship between Google and

the Chinese government. As the company continues business in China it is

• NGOs: Reporters Without Borders, Human Rights Watch. Non–

governmental organizations play a significant role in the attention being

given to Google’s decision to enter the Chinese market. The persistence of

both of these groups suggests that the company may be forced to respond to

• Competitors: Yahoo, MSN, and Baidu. Yahoo and MSN face similar

dilemmas in regards to operations in the Chinese market. These two

competitors become important stakeholders as the companies choose

whether to face U.S. and Chinese government action as a collaborative group.

Chapter 01 – The Changing Environment for Business

Teaching Note

Chinese internet search market, Baidu has reason to object to Google’s

presence and may provide more obstacles for Google’s growth in China.

• Media. Media attention to this case has been widespread and will likely

continue as government action develops. Google’s unwillingness to provide

Accusations of Hypocrisy

Google has defended the decision to enter the Chinese market as the lesser of two

evils. The company’s management claims that providing no information at all would

be worse than allowing Chinese citizens access to some information, even if it is

censored. The very public company image has drawn a significant amount of

attention to the opening of Google.cn. Many stakeholders have claimed that the

support of a repressive government is in direct contradiction with the motto of

Most Desirable Outcomes

• Continue growth in international markets without compromising the

corporate culture and values the company was founded on.

• Continue to build market share through favorable public opinion of the

Google business model.

• Rebuild a cooperative relationship with the U.S. Government; establish a

functional relationship with the Chinese Government.

• Develop relationships with competitors that encourage collaborative

solutions for industry wide problems.

Chapter 01 – The Changing Environment for Business

Teaching Note

Applying Communications Best Practices

Arthur W. Page, Vice President of Public Relations at AT&T from 1927 to 1946, is

often credited with creating the framework for what has become the modern

practice of corporate communications. The man who famously said, “All business in

a democratic society begins with public permission and exists by public approval,”

• Tell the Truth. While there is no evidence that the top management team at

Google tried to justify their cooperation with the Chinese Government with

any explanation other than the truth, the general lack of disclosure

surrounding all of the corporation’s decisions makes this difficult to evaluate.

The Google “triumvirate” never gave false or misleading statements, but their

decision to reveal only a limited portion of the truth could be considered

inherently dishonest in itself.

• Prove it with Action. Page, Brin, and Schmidt argued throughout this

controversy that they were very concerned with the rights and privacy of all

their users, and expressed support for any potential legislation that would

assist them in protecting those users. Yet when the Congressional Human

Rights Caucus held a briefing to discuss the issue, Google didn’t even send a

representative. When they attended the Congressional Hearing two weeks

• Listen to the Customer. The company has always placed the interests of

their users above all other stakeholders, including shareholders. While it can

be argued that their decision to censor information in the first place was

evidence of the company losing sight of this principle, their response to the

backlash at least partially counters this. In response to the negative reaction

of users at home, Google resisted enormous pressure from the Chinese

government to remove access to their old, unfiltered U.S. site, offer email and

blogging, and remove the censorship notification they print on the bottom of

any skewed searches.

Chapter 01 – The Changing Environment for Business

Teaching Note

• Manage for Tomorrow. The Chinese Internet market is growing at an

astronomical rate. Controversial as the conditions surrounding the move

were, Google’s decision to fight for Chinese market share was imperative to

their future growth. Making concessions today regarding one of the

• Conduct Public Relations as if the Entire Company Depends on It. While

Schmidt, Brin, and Page did issue press releases and gave interviews

regarding their decision, the company’s usual resistance towards sharing

information prevailed, and public relations were conducted almost as an

afterthought. The company has so far shown no real concern for the damage

• Remain Calm, Patient and Good-Humored. Google has long been known

for the quirky humor and creativity of its founders, a reputation they

continue to deserve. Brin and Page’s reaction to this debate has remained

understated and calm, as if they are just waiting for this to all die down so

Discussion Questions

Retrospective Questions

1. Did Google’s decision to censor information for Chinese users compromise

their business principles, or is providing some information better for the

Chinese people than none at all?

2. Was Google’s refusal to comply with the Department of Justice investigation

inconsistent with the company’s cooperation with Chinese censorship

policies?

Chapter 01 – The Changing Environment for Business

Teaching Note

5. What effects did Google’s decision to not attend the Congressional Human

Rights Caucus briefing have?

Prospective Questions

1. As Google continues to grow, is it possible to maintain the same corporate

structure and philosophy the company was founded upon?

2. How should Google respond to organizations protesting their entry in the

Chinese market? What about press coverage?

3. Do businesses have a responsibility to uphold human rights when entering

international markets?

4. Can Google remain competitive in the Chinese market without offering

blogging and Gmail services? If not, how can they protect themselves and

their users’ privacy?

5. What long-term implications will this decision have on Google’s reputation?