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Google Business Ethics

Essay by   •  June 4, 2011  •  1,980 Words (8 Pages)  •  1,867 Views

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Introduction

Google's mission is to organize the world's information and make it universally accessible and useful.

As a first step to fulfilling that mission, Google's founders Larry Page and Sergey Brin developed a new approach to online search that took root in a Stanford University dorm room and quickly spread to information seekers around the globe. The company was first incorporated as a privately held company on September 7, 1998. Google's initial public offering took place on August 19, 2004, raising $1.67 billion, making it worth $23 billion. Google is now widely recognized as the world's largest search engine -- an easy-to-use free service that usually returns relevant results in a fraction of a second.

The world's biggest, best-loved search engine owes its success to supreme technology and a simple rule: Don't be evil! The ethical policies and behaviour of Google can be understood better by analysing the four spheres of responsibilities. The analysis will aim at understanding the various dimensions of the ethical dilemmas faced by Google Inc, its founders Sergey Brin and Larry Page and other top executives.

Personal Ethical Values

A BBC New Article [1] describes Google founders Larry Page and Sergey Brin as "the type of young men most parents would dream of their daughters bringing home". Despite the fact that both of them turned billionaires after Google's IPO, they have been reported to have a modest, unassuming lifestyle. They don't own sports cars, and instead are said to each drive a Toyota Prius, a plain-looking but rather environmentally friendly saloon that is half electric-powered, and growing in popularity among green-minded Americans.

Concern for Rights and Duties

Both Google founders respect the common man's right to information which he is legally authorized to access. One malevolent practice, in Google's view, is tampering with or otherwise censoring the list of results produced by a Google search. An early test of the Google founders' commitment to providing unfiltered information struck very close to home [2]. The anti-Semitic web site "Jew Watch" appeared prominently in Google results for searches on the term "Jew," prompting some Jewish groups to demand that Google remove the defamatory site from the top of its listings. Google refused. Sergey said at the time, "I certainly am very offended by the site, but the objectivity of our rankings is one of our very important principles." However, at the same time they also realised that as the largest provider of search links on the internet, it is their duty to ensure that people are warned or made aware of potentially harmful/offensive content and thus the warning ""Offensive Search Results" on top of some of the results.

Character and Virtue

To stand upto the basic virtues of courage, temperance, prudence and fairness is not an easy task for a manager especially when the context is global and involves countries and people with varied culture and perceptions. Google's founders had to give in to the demands of Communist Party bureaucrats in China and launch a censored version of Google in the country. Viewed against the backdrop of Sergey's distaste for authority, the decision to cave in to China's totalitarian leadership seemed out of character at that time.

Responsibilities as Economic Agents

In most cases, a company is legally and ethically obliged to maximize its shareholder's benefits. The managers, as economic agents, are also obligated to compete fairly and vigorously. To gauge how successful Google, as an organization, has been in maximizing its beneficiaries, we'll track its market growth since the first IPO in 2004.

Going Public - The Motive

In a letter to the Google investors [3] Sergey and Larry disclosed their intentions behind the move of going public and their vision ahead for Google. They expect Google shareholders to share the same vision as theirs of being a company that provides "unbiased, accurate and free access to information for those who rely on us around the world". Commitment to its users, as also outlined in Google's Code of Conduct Policy [4] remains sacred to its working - whether it operates as a private or a public company. They also express their intentions of having a long term focus rather than several short term objectives. The long term strategy, they warn, may involve risks and shareholders must be well aware of these risks before taking the plunge. The essence of their philosophy is that Google will try to maximize shareholder's value by giving them larger returns for the larger risks involved (as compared to the competition) but none of this will ever come at the cost of sacrificing its commitment to its user base and its founding philosophy of being continuously innovative.

Google Share Prices

Figure 1 below shows the trend of Google Inc.'s share prices since it first went public in August 2004. Google's initial public offering took place on August 19, 2004. A total of 19,605,052 shares were offered at a price of $85 per share. The sale raised US$1.67 billion, and gave Google a market capitalization of more than $23 billion. The vast majority of Google's 271 million shares remained under Google's control. Many of Google's employees became instant paper millionaires.

Figure 1

On June 1, 2005, Google shares gained nearly four percent after Credit Suisse First Boston raised its price target on the stock to $350. On that same day, rumours circulated in the financial community that Google would soon be included in the S&P 500. After months of speculation, Google was added to the Standard & Poor's 500 index (S&P 500) on March 31, 2006. The day after the announcement Google's share price rose by 7%.

Google has also been amazingly honest with its shareholders. In February of 2006, Google's CFO made a public statement saying that the kind of growth that Google had seen recently leading to its stock value quadrupling from the initial $85, might not continue at the same pace owing to the law of diminishing returns. This caused a sharp decline in the share prices in late February 2006.

Its commitment to users, innovation and creating shareholder's value has inspired Google to probe into new

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