Huawei in Canada: Doing Business in the Midst of Game of Thrones
Scholars of business have long studied how government politics, as one group of exogenous macro-level factors, can influence cross-border firm strategies. This chapter investigates Huawei’s business in the U.S. and its close ally, Canada. Adopting a case
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ber 1, 2018, Meng Wanzhou, CFO of Huawei and daughter of Huawei founder, Ren Zhengfei, was on one of her frequent international business trips. Her planned travel would take her to Mexico City, Costa Rica, Argentina, and France (Proctor 2018), but she wound up in a different location for the years to come: While transiting through Vancouver International Airport, she was held and interviewed for three hours by the Canada Border Services Agency (CBSA). This interview led to a provisional arrest warrant by the Royal Canadian Mountain Police (RCMP). Meng’s detention stemmed from an arrest warrant issued by a judge in New York in August 2018, and it was made in Canada under the terms of an extradition treaty between the U.S. and Canada (Fraser 2019). The arrest made headlines four days later when it was announced on December 5, 2018. China was quick to demand her release stating that “The detention without giving any reason violates a person’s human rights” (BBC 2018). Huawei took a similar position defending its H. Chapardar (*) • W. X. Wei • H. Chamseddine School of Business, MacEwan University, Edmonton, AB, Canada e-mail: [email protected]; [email protected] © The Author(s) 2020 W. Zhang et al. (eds.), Huawei Goes Global, Palgrave Studies of Internationalization in Emerging Markets, https://doi.org/10.1007/978-3-030-47579-6_6
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CFO. Later, her defense team would allege that Canadians were acting as agents of the Federal Bureau of Investigation (FBI) when it became clear that a Canadian officer had collected Meng’s electronics in anticipation of a request from the Federal Bureau of Investigation in the U.S. (Smart 2019). In fact, U.S. investigators had begun investigating Huawei for a possible violation of sanctions against Iran since 2016 (Freifeld 2018), which led to filing charges of fraud against Meng. This alleged fraud centered around Skycom, a company that did business in U.S.-sanctioned Iran. According to prosecutors, Skycom was a hidden subsidiary of Huawei with Meng serving on its board of directors (Proctor 2018). They add that Meng attempted to evade U.S. sanctions in relation to the movement of money out of Iran. Regardless of the interactions among politicians, which is out of the scope of this chapter, the case of Huawei is an interesting one from a business strategy perspective, especially if studied in the context of Huawei’s business in North America before and after the arrest. In fact, this case is an outstanding example of increased and disruptive interactions between firms and governments. Management and business scholars have long studied the impact of such interactions on business. In most of these studies, governmental politics takes the form of exogenous forces that influence business decisions, such as decisions about geographical targets for internationalization. These forces are often given: Firms take them for granted and adapt to them. With the growing power of multinational firms across the world, business actors have taken more agentic roles in their i
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