Answer the following questions regarding the case shownbelow:

1. In your view, why does SEEK's internationalisationstrategy focus on emerging markets?

With an initial dream to be "the destination of choice forAustralian job seekers", SEEK was founded in Melbourne, Australiain 1997 by brothers Paul and Andrew Bassat, together withco-founder Matthew Rockman. At the beginning, the entire businesshad a very simple purpose: "taking employment classifiedadvertising online and away from the city's newspapers". Sincethen, SEEK has established itself as one of Australia's fastestgrowing businesses, and one of the iconic start-up companies inAustralia.

Today, SEEK Limited, as an ASX/S&P 200 indexed company (anindex of the leading 200 listed companies in Australia), is aleading service provider in the online employment and trainingmarket in Australia and New Zealand. SEEK is best known by itsleading job searching engine, seek.com, which has over 150,000 jobsonline and is visited 14.7 million times each month. SEEK hasexpanded its global businesses by its rapid internationalisationprocess in the last 17 years. By observing the trajectory of thisprocess, it is evident that the company has a clear strategy tofocus on emerging markets. To date, SEEK has acquired interests infive online employment websites that operate in countries acrossSouth-East Asia, China, Brazil, and Mexico, with exposure to over 2billion people and approximately 20 per cent of the global grossdomestic product (GDP). Overall, SEEK has received over 375 millionvisits to its global products every month and has over 3 millionjob opportunities available at any given time and over 100 millionjobseeker profiles. Similar to many multinational enterprises(MNEs) in their early stage of international expansion, SEEK alsoexperienced management crisis together with a mismatch between itsrapid internationalisation and cross-culture managementincompetence. Although in its organisational culture statement SEEKclaims that it aims to promote a culture of excellence andacceptance in the workplace and celebrate the diversity ofemployees who contribute to the success of the organisation, thestatement does not accord well with the story of how it managed itsChinese subsidiary.

In October 2006, SEEK acquired an initial 24 per cent interestin one of the three leading online employment sites in China,Zhaopin Ltd (Zhaopin, hereafter), whose website received a largernumber of unique visitors each month than the number of peopleliving in Australia. The Zhaopin investment represented SEEK'sfirst investment in an online employment site outside Australia andNew Zealand. Since 2008, with the Australian investment bankMacquarie, SEEK had further invested US$110 million (A$120 million)in Zhaopin. From 2008 to 2010, SEEK had increased its investment inZhaopin to around 58.6 per cent.3 Along with the increase ofownership interest, SEEK faced more challenges of cross-culturemanagement. These challenges were to do with the extent to whichSEEK's headquarters should intervene in the daily business runningof its foreign subsidiary and how to manage the top management team(TMT) in its subsidiary. Over a period of 12 consecutive years,Zhaopin changed chief executive officers (CEOs) and theirassociated TMT members four times and adjusted a number ofmarketing plans. Under the leadership of the new CEO, Peng Zhao -who joined Zhaopin in 2005 as a director of marketing and was soonpromoted to chief operating officer (COO) then to his CEO position- the fourth quarter of 2009 was the first occasion on whichZhaopin achieved profitability, according to its officialdisclosure of financial information. Employees were pleased aboutZhaopin's capability to maintain its positive financial performancein the first quarter of 2010 and they felt their strategic goal ofhaving their company listed on the New York Exchange was one stepcloser, but most of them could not foresee a forthcoming,unprecedented crisis. Although it seemed at the time that thecrisis started with four dramatic corporate public emails,conflicts between the subsidiary's CEO and SEEK headquarters weredeeply rooted in the past several years.

On 23 July 2010, Daniel Phillips, a senior executive ofMacquarie Bank's Shanghai office, and his business partner, adirector of SEEK headquarters, turned up for boardroom duties atZhaopin's Beijing office, but they found that the Zhaopin Beijingoffice had locked them out. Following that drama, Zhaopin employeesreceived four emails from two factions of their senior managementteam from 23 to 26 July 2010. In the first email, CEO Peng Zhao, onbehalf of his "core" TMT, including the COO and two otherexecutives, announced the decision to dismiss four otherexecutives: the chief technology officer (CTO), the chief financialofficer (CFO), the vice president, and the director of technology,who were recruited by SEEK's headquarters and mainly worked inZhaopin's Shanghai office. More importantly, compared with the CEOand other TMT members, who are located in Zhaopin's main

office in Beijing, CTO Yongtong Yu and his core team were believedto have a closer relationship with SEEK's headquarters. Two hourslater, the second email appeared in all employees' mail boxes,stating that the last email sent by the CEO's office was notauthorised by the SEEK Board of Directors (BoD), and therefore theannouncement was invalid. As a result, the four "dismissed"executives, the CTO, the CFO, the vice president, and the directorof technology, would remain in office, while the CEO, Mr Zhao, andhis core team members were in turn dismissed.

The two conflicting corporate messages shocked most employees.Although it is quite common to see personnel changes for a foreigninvested enterprise (FIE) in China,

such a sudden occurrence of TMT infighting, in particularexecutives' infighting between a subsidiary and the foreignheadquarters, is unusual. After a long and exhausting day, when MrZhao left his office, he undertook a brief interview with ChinaBusiness News reporters outside the gates at midnight. He commentedthat the crisis that he and seven of the top managers had sackedeach other or been sacked by the Australian directors "can beviewed as a corporate bloodbath, replete with imagery of World WarII. When Pearl Harbour has been attacked, how could I wear aswallow-tailed coat to face the media and the public?"

After the weekend, Daniel Phillips and a SEEK director returnedwith their lawyers and around 10 newly employed security officersto Zhaopin's Beijing office on the morning of 26 July 2010. Soon,the third email appeared in employees' inboxes.The email confirmedthe dismissal of Mr Zhao's team and explained the BoD's decision asarising from the former CEO and the other three executives havingdamaged the company's daily operations, threatened Zhaopin's futureinitial public offering (IPO) in the international capital markets,and having sought to increase their own personal gain bysacrificing other employees' interests within the company. Todefend his rights and reputation, Mr Zhao, in his own name, sentthe fourth public email to staff, and stated that all theseaccusations were neither reasonable nor acceptable. In his letter,he argued that, as an executive and CEO, who owns the most optionsof the company, he would not do anything to block the corporate IPOplan, simply because the future IPO would bring more benefits to himself rather than to other

TMT members. He stated that, in order to protect the commoninterests of the company, he would not disclose more details of TMTconflict, especially conflict related to investors (that is, SEEK).Further, Mr Zhao emphasised, "since we don't speak the samelanguage, I had already prepared to resign from the company"; buthe was sorry that SEEK's biased decision was made on the basis oftheir differing views and communication incompetence. Since thedismissal had become a firm decision from the SEEK BoD, Mr Zhaomaintained his calm and undertook a long interview with reportersfrom China Business News. He reflected on the entire drama and hiscareer with Zhaopin, and commented:

"Zhaopin is just like a child, but Chinese and Westerners treattheir child in different ways. I used to have a chat with SEEK'sBoD chairman. He told me that,

when he was a CEO, he spent 30% of his time communicating with hisBoD members, while 70% of his time was used on running businesses.However, in the past, I could only spend 10% of my timecommunicating with the BoD. Think about it: we could only have onetelephone meeting per month, and one face-to-face meeting perquarter. I was still very unfamiliar with these BoD members after ayear".

Mr Zhao felt he was strongly distrusted by investors and theBoD. He provided an example. Back in December 2009, he made adecision that Zhaopin's Shanghai office,

which is mainly in charge of technology development, must be mergedwith its Beijing main office, and employees who were in theShanghai office could be relocated to the

Beijing office. He explained to all TMT members:

"I always believe that our technology department plays a rolelike a heart to the human body, but the main office should worklike the human brain. To function well, brain and heart should staytogether. To be specific, Zhaopin has a technology team of 90employees, of which some stayed in the Beijing main office whilethe others worked in the Shanghai office. This caused significantproblems for our daily management, but I knew the barrier toimplementing my decision was from our CTO Mr Yu, because his familyis in Shanghai."

As anticipated, Mr Yu immediately denied this, explaining hisreasons to the reporter in another interview:

"There were some historical issues in this company history. Iused to lead my own software company. Zhaopin was just one of myclients. Several years ago, when the former CEO, Mr Liu, invited meto join Zhaopin, I took all my core technology team members withme. I was promised by the former CEO that I would be allowed tostay in Zhaopin's Shanghai office. It was a pity that the formerCEO resigned from Zhaopin in August 2009. When the new CEO, MrZhao, took power, he started to dismiss my team members, includingmy key technology assistant."

Two weeks later, Paul Basset, the co-founder of SEEK inMelbourne, Australia, who was one of Zhaopin's BoD members,formally undertook an interview with reporters from the SydneyMorning Herald, and concluded: "peace had been restored ... We'veresolved our differences with the particular executives on anamicable basis... The business achieved profitability and cash flowprofitability this year and we're happy with the trajectory".

After another four years, on 12 June 2014 Zhaopin eventually wentpublic on the New York Stock Exchange. The successful IPO raisedUS$75.7 million with a market capitalisation of US$674 million at aprice range midpoint of US$13.50 per share on the day.14 However,people wonder whether the IPO would have come much earlier if therehad not been such infighting among the TMT and BoD members. Afterall, profitability started in 2009 under former CEO Zhao'sleadership.