Abstract

“Balancing Ethics and Shareholder Returns: The Case of Google in China” provides a timely example of a well-known firm who, in their attempt to act in an ethical manner, generated tremendous financial harm to their shareholders. It provides an interesting counterpoint to the assertion in the literature that shareholder wealth maximization provides an ethical basis for all business decisions. Google is a firm that many students know and admire, and this should spark interest in the case. It can be assigned in the early stages of a corporate finance class, where the topic of discussion is the goal of the firm, or in a business ethics class, where the goal of the firm is evaluated. The case provides an opportunity to evaluate the ethical basis for Google’s actions, as well as the resulting impact on shareholder returns. The case may also represent a real-life counterpoint to the oft-repeated maxim that “Good ethics is good business”. Information in the case was compiled from secondary sources.