Microsoft Opens the Gates: Patent, Piracy, and Political Challenges in China Essay

Microsoft faced some(prenominal) large encounters when operating in china. many of these attempts included package piracy, Chinese give medication pressure to transfer engineering, legion regime promotion of competitor crossroads, preferential procurance practices by sub-national authorities in china, and the unfluctuating encouragement for Microsoft to enter conjugation ventures with local anesthetic firms. One main micro risk that Microsoft faced was when the Beijing municipal presidency avoided Microsoft by awarding operating formation software contracts for 2,000 PCs to Red Flag Linux.I see these risk increasing cod to the fact that the Chinese Central b fellowship has put youthful restrictions to foreign exchange transactions in attempt to check issue the flow of convertible currency out of the coun castigate. This restriction set in abode by the Chinese Central verify was described as a crackdown on illegal transactions. This change will efficaciously m ake it more difficult for some(prenominal) domestic and international companies to move big(p) in and out of chinaware. In result, single increasing the risks for MNCs to do business in mainland mainland China.Another main reason wherefore I see the risks increasing is that the Chinese government has not made an apparent movement to control the piracy/counterfeiting issues. Counterfeiters are Chinas colossalst state owned factories. These risk are also found in other adopting countries such as India where piracy and counterfeiting is a big issue. later the U. S. China accord on bright property rights in 1992, it encouraged Microsoft to research further opportunities in China.In locate to carry away governmental risk in China, signly, Microsoft signed various agreements with Chinese PC producers to pre-load its software on their computing machines. different approaches to look at political risk included arising Microsoft Research China (Microsofts secondment inte rnational research lab and the source one in Asia) and signed agreements with Chinas top four computer makers to preinstall Windows XP on their machines.One of the approximately notability approaches was when Microsoft signed an accord with the Shanghai Municipal government whereby agreed to help mount Shanghais software sphere of influence, continue its Shanghai regional support fondness into a global support center, and tick off thousands of software architects. Ultimately, Microsoft continued to manage political risks throughout the years by act to fix agreements with Chinese PC manufacturers, develop new partnerships and better its relations with the Chinese government.I favor the strong ties that Microsoft reinforced over the past two decades with the Chinese government and feel that all the techniques they use to manage political risk were required in baffle to conduct remunerative business in such a scrutinized country and economy. Going forward, Microsoft should continue to try and enforce IPR and keep healthy kindreds with the Chinese for obvious reasons. They should keep developing partnerships and score a Microsoft oriented software sector in China through instruction/certification to strengthen the companys forecast.By having to deal with displace levels of government, it created an initial challenge to win over the lower level of government in order to strengthen Microsofts overall relationship with China. Specific challenges included when the they signed agreements with Chinas State Development & adenosine monophosphate Planning focus to invest in education/training, signed a large investment and cooperation deal with the Beijing Commission on Science & engineering and struck partnership deals with various Chinese companies such as Petro China.Although Microsoft kept qualification strong efforts to strengthen the relationship with China, they silent faced many challenges to overcome Chinas discrimination towards the company by requiring all ministries to purchase Linux based software. These challenges created new opportunities for Microsoft to create new initiatives to benefit the Chinese economy which in result helped them build a strong footprint in China. Yes other firms do wipe out the corresponding risk steering options as Microsoft did.Other firms did have the same risk management options because all MNCs faced the same macro/micro issues that Microsoft faced when entering the China markets which included pressure to transfer technology, host government promotion of competitor products, discriminatory procurement practices by sub-national authorities in China, and the strong encouragement to enter joint ventures with local firms. Microsoft is creating serious risks by supporting, financing, and transferring technology to local Chinese software firms only when had to do so in rder to have success in China. By them giving back to the Chinese economy, in publication a large percentage of softw are users are using Microsoft product de jure and illegally. In result, the end user is most likely using a Microsoft product and creates brand awareness. Microsoft used the appropriabiltiy theory to manage their risks by only sharing teaching with their partners that is only appropriate in order to make the partnership work.