Of late the US government has shown its disapproval to the business activities of Microsoft in China. Since the mid-1970s when Bill Gates was a student at the Harvard University and a few years later when he incorporated Microsoft, there have been numerous difficulties faced by the company, most of them created by the company itself in its quest for expansion and venturing out in contentious territories. The recent issues regarding the presence of Microsoft in China, especially the cosy relationship between the company and the Chinese defence forces, have been escalated due to the tense relationship between the United States and China due to the tariff war. The advancing frontiers of technology require cooperation and support from several quarters in research and development and also by providing well-trained personnel and a ready market. On these parameters, China has been a fantastic destination for Microsoft and for a very long time, Bill Gates had turned a blind eye to rampant piracy and use of illegal software in China. All this had happened despite the stringent action taken by Gates in the form of legally binding end-user license agreement. It is well known that Gates was the frontrunner to enforce strict legal compliance, which might have been inspired by his father, who was a lawyer in Seattle. However, expansion of business being the primary goal made Gates put the legal issues on the backburner. There has been a strong legacy in Microsoft of using the best talent available anywhere in the world and China has been able to provide talented individuals along with tremendous opportunity for doing business. With the political leadership being threatening, the American companies are finding it difficult to do business in other countries not only because of the hostility shown by them, but because of the nationalistic and protectionist measures taken by the American government itself. These measures have been a part of the long-term strategic decision making with the aim of providing sufficient cyber security and taking care of the national interest. Satya Nadella has been in the driver's seat just for the last five years or so, and a substantial time period has overlapped with Trump's presidency. China wants Microsoft in China, if and only if, it succumbs to Chinese demands. So far, Microsoft has played ball. But, Trump won't let it continue like this. Whether one likes it or not, any business corporation cannot, in all practicality, go against its own government. We are already witnessing protectionist tendencies in the world and certain measures are being taken by extremely powerful countries to strengthen their strategic positions in the comity of nations. In the digital world, there are hardly any geographical or territorial boundaries. Still, there are countries which have been paranoid – some experts may call it being hard core realistic – about the data of their citizens as well as country's vital information. China is one such country. It has been able to force big multi-national corporations to bow to its demands of installing physical servers on its land, and not on foreign soil, and also not allowing several websites, domain names, software, etc. In such a scenario, it is quite surprising, rather shocking, that Microsoft has been into a business relationship for development of artificial intelligence and machine learning technologies, which are knowingly used by China for face-recognition, surveillance and several oppressive controls. Understandably, there is a direct conflict between business interests and human rights. Ethical norms have been, to say the least, quite obviously ignored, and that too by risking one's national interests. Strong stand taken by the US government will undoubtedly force Nadella, heading Microsoft, to rethink the company's strategy of doing business in China. It is not going to be easy for him as the trade tensions between the two countries do not appear to be ebbing. Alignment of the business strategy with political and legal strategy, keeping in mind the long term risks, seems to be the only answer to Nadella's problems, and the sooner he makes his company's business in sync with the government's current thinking, the better for the company. The author is a professor at IIM-A, akagarwal@iima.ac.in

Stay updated with all the Ahmedabad Latest News headlines here. For more exclusive & live news updates from all around India, stay connected with NYOOOZ.