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

Microsoft faced many rotund lucks when operating in china. Many of these risks included software piracy, Chinese g all overning pressure to stir technology, host government promotion of competitor products, discriminatory procurement practices by sub-national authorities in mainland chinaware, and the strong encouragement for Microsoft to enter joint ventures with local anesthetic anesthetic firms. One main micro risk that Microsoft faced was when the capital of Red China municipal government avoided Microsoft by awarding operating system software contracts for 2,000 PCs to crimson Flag Linux.I see these risk increasing due to the concomitant that the Chinese Central Bank has put new restrictions to foreign alternate transactions in attempt to control the flow of convertible up-to-dateness out of the country. This restriction set in place by the Chinese Central Bank was described as a crackdown on outlaw(prenominal) transactions. This change will effectively make it mor e difficult for two domestic and supranational companies to move capital in and out of China. In leave alone, only increasing the risks for MNCs to do business in China.Another main reason why I see the risks increasing is that the Chinese government has not made an effort to control the piracy/counterfeiting issues. Counterfeiters are Chinas largest state owned factories. These risk are also bring in other developing countries such as India where piracy and counterfeiting is a big issue. After the U. S. China accord on intellectual prop rights in 1992, it encouraged Microsoft to explore further opportunities in China.In cabaret to manage political risk in China, initially, Microsoft signed motley agreements with Chinese PC producers to pre-load its software on their computers. Other approaches to manage political risk included opening Microsoft Research China (Microsofts second international research lab and the first one in Asia) and signed agreements with Chinas top four computer makers to preinstall Windows XP on their machines.One of the more or less notable approaches was when Microsoft signed an accord with the impress Municipal government whereby hold to help develop Shanghais software arena, expand its Shanghai regional support center into a global support center, and naturalize thousands of software architects. Ultimately, Microsoft continued to manage political risks throughout the years by continuing to build agreements with Chinese PC manufacturers, develop new coalitions and violate its relations with the Chinese government.I favor the strong ties that Microsoft built over the past two decades with the Chinese government and feel that all the techniques they utilise to manage political risk were needed in order to dish out profitable business in such a scrutinized country and economy. issue forward, Microsoft should continue to try and enforce IPR and keep healthy relationships with the Chinese for patent reasons. They should k eep developing partnerships and build a Microsoft oriented software sector in China through training/certification to settle the telephoners forecast.By having to deal with lower levels of government, it created an initial challenge to attract over the lower level of government in order to chant Microsofts overall relationship with China. Specific challenges included when the they signed agreements with Chinas State Development & Planning Commission to invest in education/training, signed a large investment and cooperation deal with the Beijing Commission on Science & Technology and struck partnership deals with various Chinese companies such as Petro China.Although Microsoft kept making strong efforts to strengthen the relationship with China, they still 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 ben efit the Chinese economy which in result helped them build a strong footprint in China. Yes other firms do entertain the same risk management 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 stir 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 however had to do so in rder to have success in China. By them giving back to the Chinese economy, in return a large percentage of software users are using Microsoft product legally and illegally. In result, the end user is most likely using a Microsoft product and creates brand awareness. Microsoft used t he appropriabiltiy theory to manage their risks by only share information with their partners that is only appropriate in order to make the partnership work.