hould companies comply with China’s terms?
As our society advances towards a global society, and companies begin to transition themselves into multinational and global organizations, the question of which rules and regulations should the company follow is likely to precipitate. I feel such is the case with China. I believe prior to answering the question of foreign nation compliance, one should examine the reasons why an organization has entered into that foreign market. The primary objective is typically profits, a secondary could be expansion, an initiative to become a globally known brand and gain international market share. Once the fundamental question of “why” is answered, the remaining issues, such as foreign government policies, can be addressed as well.
So should a company comply or defy? Proponents of both sides of the fence are up in arms and ready to debate their stance. Proponents argue loss of market share if a company decides to leave a potentially new market, especially an international market. And proponents of defying the compliance terms are citing moral and ethical beliefs which make it wrong to comply with a communist government (http://hbswk.hbs.edu/item/5246.html). So who is the victim and who is the winner? I think that both sides are equally at loss as well as gain. If a company decides to leave due to compliance issues, chances are their competitor will step in and dominate that market. It is often difficult for a company to enter into the market as a secondary and gain market share. Foreign investments are both risky and expensive to finance, organizations determined to gain market share should certainly comply with the rules and regulations of the foreign market in which they wish to do business in. On the other hand, do we forego our moral and ethical values simply because we are on foreign soil? Are