Competitive Intelligence

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Most companies want to be and claim to be on the right side of the fine line that demarcates ethical CI from low life espionage. Only, different people and companies draw lines at different places.

Let’s first distinguish between personal and corporate ethical lines. My friend works with the competition. Is it OK if he talks to me about his company when he has had a beer too many, and I share that information internally in my organisation? This lies in the personal space – am I willing to break my friend’s confidence?

Is it OK to invite someone from the competition for a job interview with the sole purpose of collecting intelligence? This is the corporate space and is falls under the ambit of company policy.

At one end of the spectrum, there are those that believe that there is no such thing as “unethical” CI – as long it is within the ambit of the law of the land. Personally, I don’t subscribe to this view. Instinctively, it feels right that there need to be rights and wrongs beyond what the law allows – just as we have social norms and courtesies in personal interactions.

The SCIP has a code of ethics for CI analysts, but it is only a guide. Each company draws (and needs to draw) its own lines. These lines also vary by geography. In general, companies in Asia and Latin America tend to have more flexible norms than those in Europe and US.

There are large grey areas in CI ethics. Mystery shopping, for instance is a widely accepted research methodology in most parts of the world, but viewed under the most stringent ethical framework, is a form of misrepresentation.

Leonard Fuld (in a recent blog) recommends that lawyers within companies should formulate their codes of ethics after familiarising themselves with the actual practices followed by their CI analyst – to ensure that the code that they draft is followed by the employees rather than broken on the sly. In other words, one is structuring the guidelines for ethical CI in such a way that the analysts can pretty much continue their current practices – as against taking a call on what is right, as ensuring that the analysts abide by it.

Fuld’s suggestion is pragmatic, but needs to be put into practice carefully. Admittedly, the code of ethics should not be so hard to follow that everyone breaks it. On the other hand, its formulators need not bend backwards to accommodate the not-so-ethical practices that may be followed by some practitioners in the company.

This brings us back to the point that each company needs to decide where to draw its own line. And this I think is determined by the culture, integrity and ethical standards of the company and the senior management as a whole.

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