Ethics of Corporate Espionage vs. Competitive Intelligence


              I will start by defining some basic principles for business ethics. Business ethics are the principles and values that guide behavior in the business world. Sounds pretty easy doesn't it?  However, what is the difference between principles and values? Principles are very specific boundaries that rule the behavior of a society. Values are the beliefs in what is right or wrong.

             The corporation or industry defines the principles and values its employees will adhere to by establishing a code of conduct or code of ethics. What happens when people disagree? Then, you have an ethical dilemma. I will define ethical dilemma as a condition or situation where a person or group is faced with a decision to test these moral or ethical codes. Also, ethics can change over time or location. For example, what was acceptable in the 1960s, isn't acceptable today, like DDT. Likewise, gift giving in China is acceptable, however, in the US it might be considered a bride. Within the accepted code of ethics, a company or industry must be socially responsible. Social responsibility is the obligation of a business organization to maximize its benefits while minimizing the negative social impact. In other words, balance their profits with the needs of society. Like what "green companies" are trying to do.

             Ethical dilemmas occur today when a company attempts to research their competitors. There are two very distinctive methods for a company to obtain this information, competitive intelligence and corporate espionage.

Corporate espionage is the gathering of information by deceptive or illegal means. Let me draw the distinction between competitive intelligence and corporate espionage.  Competitive intelligence differs from corporate espionage because it refers to the legal gathering of information from public assessable sources such as: newspapers, websites, trade shows, corporate publications and patent filings. Basically, any information that is obtained through legal and ethical means.  Whereas corporate espionage is the assembly of information that is not available to the general public.

There are two main targets in corporate espionage; first, intellectual property, for example: formulas and recipes, industrial manufacturing procedures or techniques or ideas.  Second, operational information such as: customer lists, pricing, sales, R & D, policies, planning and marketing strategies or prospective bids. Corporate espionage can take on many illegal forms; bribery, blackmail, surveillance or theft of trade secrets. The purpose of corporate espionage is twofold: either information theft or sabotage.

            Regarding the two systems of corporate espionage, information theft and sabotage, I will address information theft first. Information theft usually occurs in two distinct situations.  Either a disgruntled employee looking to harm their employer or to obtain financial gains.  Second, a competing company or foreign country seeks to advance their own interests. There are several effective methods of gaining this material. First, moles or spies are frequently used to infiltrate a company with the sole purpose of collecting data. This spying can take on many forms. You can utilize anyone who has legitimate access to the company such as, maintenance workers, custodial personal, inspectors, temporary employees or vendors. This information can be obtained from anything from trash receptacles to an unmanned computer in an office where data can be downloaded. Second, a “patsy” may be used.  You can target an individual within the company and get them to release seemingly harmless material. After the initial transaction, you ask for more and more sensitive information. The party complies due to the threat of exposure of his illegal act to his employer. Third, personal computers are one of the most effective methods of receiving material. These computers can be stolen from airports, hotels, coffee shops or anywhere a lab top is momentarily left unattended. Fourth, the internet is becoming the most vulnerable source to attain confidential and sensitive information. There are approximately 50,000 companies a day that are thought to be under cyberattack and it’s estimated this will double each year. Malware can be applied to gain corporate secrets or access employee’s mobile phones to activate their cameras or recorders and get a firsthand look inside their company’s inner workings.