Inadvertent Use or Distribution of Company Data - Research Paper Example

 Inadvertent Use or Distribution of Company Data Introduction Is industrial espionage ethical? The evidence provided indicates that it is a matter of perspective, dependent upon the position of the individual in retention of the sensitive knowledge. Deliberate disclosure of information in an attempt to seize opportunities or profitability from another entity, in today’s society, is the catalyst for retaliation by those parties affected, indicating that it is considered an unethical and immoral action. However, disclosure of information learned through experience and career development (inadvertent disclosure) could be considered a logical outcome in a typical knowledge management model in the business environment. The ramifications of industrial espionage are dependent on the long-term impact to business strategy and integrity in order to be labeled grossly unethical. National security issues, in the case of industrial espionage, are nearly non-existent as threats to corporate stability are a common outcome in a free market society. The Evidence The duties to clients that rely on business partners for information or opportunity are obvious in this case, as ensuring the longevity and health of the corporation is a mandated expectation as an individual with access to critical information. However, there is a genuine risk involved “as nearly anyone can be recruited – knowingly or not to spy against his or her own interests” (Chabrow, 13). Chabrow identifies a situation involving a salesclerk at a telecommunications company that was easily mislead to retrieve computer files by a corporate rival disguising as a covert operation within her own business leadership. The clerk received sizeable bonuses for her role, believing throughout the entire operation that she was upheld by her own governance and executive team. In this particular case, there were sizeable breaches in ethical behavior. A low-level employee was recruited to conduct internal corporate spying and then relay this information via a secret e-mail account. The goal in this case was to seize information and then use it for direct competitive purposes to undercut or create a similar operational or performance model using this recruited data. The clerk had been made an unwitting accomplice to industrial espionage, thus in a sense spared ethical ramifications through plausible denial. A bottom-up analysis of low-level career position security access would avoid these situations, however there is clearly little liability on behalf of the clerk. Ethical misconduct has occurred via a third party influence, though it will likely involve considerable analysis of the exchanged knowledge to recognize its potential financial losses to the business. The question still remains: Is industrial espionage ethical? There might be a handful of business executives that might differ, having established many different competitive intelligence units. These are divisions of the business that are devoted to performing the operation of gathering information on competitive activities, leading potentially to bribery or even tangible dumpster-diving (Naef, 2). In general, this division will likely not engage in these activities, however their function is clear: To ensure that knowledge regarding rival company efforts is classified and categorized. Businesses with this function will browse various forms of media for insight, driving a singular purpose of intelligence creation. Have ethical boundaries been crossed with a business model that sustains an internal division devoted to competitor analysis? History often favors the victor, however even the mid 20th century spy network in East Germany was built on “confirmatory surveillance”, ensuring that what was considered real was genuine (Zatlin, 49). Businesses that have developed these single-minded divisions for competitor analysis have violated no predetermined ethical standards if they use the governmental model of knowledge is power. It should be considered that the ethical dilemma is the extent to which individuals within this network are willing to take their efforts and the long-term damage imposed on business reputation or lost client volumes as a result. An expert in high-level information systems security compares one business branch to that of a vacuum cleaner in which articles, statistics, brochures, and information and continuously inhaled creating a vast knowledge collection system (Joyal, 6). This occurs as a natural outcome of conducting business. The development of an internal division devoted to some level of industrial espionage would only be enhancing the speed of knowledge collection, thus granting faster knowledge access to employees than would have occurred with a typical business evolutionary period. If knowledge involving competitor activities were inadvertently offered during the course of these efforts, ethical liability would be individualized and not necessarily the corporate leadership with full charge of lower-level employee actions. A recent alleged ethical situation occurred involving Hilton hotels, owned by Blackstone Group, in which thousands of sensitive documents were alleged to be the victim of industrial espionage. “The case has been an embarrassment for Hilton and its owners” (Lattman, B1). The negative publicity received by Hilton was occurring during a period where the company was attempting to build a lifestyle brand and alter its marketing image. The long-term impact of the proposed actions of previous executive leadership was a potential loss to shareholder equity and brand value. Hilton had acknowledged that many of these documents were not perceived to be of significant business value, thus their exchange was rather transparent; an inadvertent opportunity for industrial espionage. The Hilton case indicates that assessing whether ethics have been violated is being determined by business leadership. What had generally been considered invaluable or non-classified materials provided new opportunities to use that information as part of learning within a career portfolio. Hilton viewed it as a breach of ethical policy and demanded strict legal action as the outcomes were perceived to interfere with long-term strategy. However, had this material exchanged hands in the corporate vacuum of knowledge, it is likely immaterial that its departure from Hilton would have been very transparent and not labeled any form of ethics violation. The obligation to ensure corporate longevity and growth is the role of every employee in the business, from governance levels to support staff. The 1996 Economic Espionage Act makes a federal crime out of this practice. However, Alex Graham, senior director of the Society of Competitive Intelligence Professionals, stated “Most corporate practitioners of competitive intelligence would find this really suspicious and not touch that information” (MacArthur, 4). The law makes this practice a deterrent; however competitive intelligence officials within the business are making the determination as to whether or not this is acceptable, moral practice. It is an eye-of-the-beholder scenario that determines whether inadvertent information gleaned through business practices has become an ethics breach. It is sometimes the role of the business, itself, to be the victim of espionage that occurs as a product of foreign government bribery. The ultimatum of native worker training in key technologies can be a mandate of conducting operations in the foreign country, as one example (Winkler, 2). If this were a social scenario, it would likely be perceived as a form of extortion and be categorized as a breach of personal ethical guidelines. However, in this scenario, there is going to be significant learning impact as knowledge is transferred to foreign workers and it is accepted as routine, unavoidable business practices. This becomes an inadvertent exchange of industrial knowledge that avoids the label of unethical behavior. Since the business is being put on the defensive or into an accommodating position by a more regulatory force, business leaders are able to dismiss it as an ethical violation since corporate long-term interests will be secured as a product. When employees are exchanged as a natural turnover scenario, knowledge about their particular industry is going to be retained; “it is inevitable” (Winkler, 2). Companies are establishing new trade show events in the hopes of remaining current within their industry. However, they become much better at delivering information than gathering it in the process (Winkler, 3). Collection experts are sent to these events via third party competition or interested industries where marketing identities are clearly present as well as opportunities to network with internal staff about job role and expectations. It is considered practical career business sense to attend these trade shows. When an individual inadvertently offers knowledge regarding internal organizational policies or dynamics, the generic job searcher or even the collection experts have unlimited ability to use that knowledge to their personal or business advantage. However, the collection process is either over-looked or considered perfectly sound business practices and are therefore not in breach of ethical policies. This is significant for corporate security when mid-tier managers are acting as senior executives in functions that are not being controlled or managed by senior advisement panels. Individual espionage tactics at public fairs where corporate knowledge is offered in volumes could be posing as an interested executive recruit that establishes an immediate, positive social connection with trade show leadership. The end result could be a modest competitive edge or a burst of new product innovation ideas for a rival company. Free exchange of inadvertently-delivered information only enhanced researcher design concepts, even though a long-term competitive product now stands on the same market as a result. In this case, it would be the ethical responsibility of the senior-level managers to ensure that the information provided to public trade shows is not classified information and that mid-level managers do not have access to sensitive data. None of the given scenarios really prescribe to national security issues, as they generally involve use of intellectual property that is closely associated with branding and marketing imagery. Free market competitive tactics make some form of competitor analysis necessary, using a variety of formats that are both typical and somewhat unorthodox in order to sustain competitive edge as industries evolve to include higher competition. Rarely is this considered unethical behavior. However, internal employees would have a responsibility to ensure business longevity before utilizing third party information in a fashion that could erupt into bad publicity or a tarnished competitive image. Empowerment models and job rotation, two common business activities, have given employees much more exposure and visibility in the modern corporation, therefore inadvertent exchanges of knowledge from one business professional to another are going to occur. Again, ethical violations in this case are individualized and the liability falls on those responsible for the actions even though a large majority of the company could be affected by decreased shareholder value or brand equity. Another scenario recently occurred in which a large company manufacturing company experienced espionage in the form of product design theft. This was a family affair in which high-ranking brothers were passing this information to another family member in a rival corporation. Upon being observed covertly and interviewed for their alleged transgressions, both brothers eventually resigned (Isaacs, 1). In this case, the business was not willing to experience reputational damage caused by over-publicizing the event, essentially letting the matter rest without legal intervention, thus allowing the brothers to continue about their executive careers. The process or product knowledge gleaned by a variety of third party professionals in this scenario would be an inadvertent exchange of knowledge to the rival industry. Ethics violations occurred not only within the manufacturing company, but in the third party accused as well as the corporate leadership. By not seeking ethics violation charges in an attempt to maintain marketing face, it could deliver the message that there are some ethical violations that can be swept under the proverbial rug so long as the corporate objective is best served. This could act as a model for another group of employees in other industries to mold their behaviors against this case study with the notion that job abandonment could be an easy method to avoid ethics charges since the business will favor reputation as priority and let the matter rest. Chabrow’s depiction of the scenario involving a naive salesclerk inadvertently distributing vital corporate information at the hands of third party knowledge collection agents reinforces the need to improve security in the business environment. Even without proper security protocols, employees who do not carry the same organizational values on ethics might have ample opportunities to spread staff, product or internal management dynamics to individuals they believe are generic shopping consumers. It is of considerable importance to businesses that companies develop a risk management model to assist in identifying what constitutes ethical behavior related to protecting corporate secrets. The line between what is deemed paramount and sensitive information needs to be drawn in order to effectively state that an ethics violation has been breached. Conclusion The extent of corporate interests being unprotected by routine or suspicious internal staff activities seems to dictate whether such knowledge exchanges are deemed unethical or ethical. Assessors generally, at first, involve internal executives or governance leadership that must weigh potential shareholder value, brand equity, and advertising image in the event of an ethics risk. It is commonly respected that many corporate officials are looked toward as mentors or transformational leaders with employees looking toward their management team as mentors and job coaches. Therefore, establishment of internal organizations or factions that gain competitor knowledge through intense external analyses (such as trade show masquerades) might be modeled as acceptable behavior and then travel throughout the top-down business hierarchy. Breaches in non-verbalized ethical contracts are deemed most unethical when potential loss to brand equity is perceived and thus action is taken against businesses or individual staff members. National security issues are largely irrelevant since free market economies provide for innovation in competitive positioning and intelligence gathering. Employees are still conducting industrial espionage, however some of these situations are not making it into the legal environment to avoid what might be corporate expenditures or simply just protecting the organization and its strategic goals for positive corporate responsibility. In an environment where managers and employees have high access to multiple business functions and products, their knowledge transfer becomes more of a risk even though the ethical contract is virtually non-existent other than what is considered the ethical norm in the majority social culture. When business leaders are determining what is unethical and the level to which any retaliation should be pursued, ethics violations have occurred when there is potential loss to the profit model or competitive positioning. Even though the companies have opportunities to ensure further innovation, the legal system protects the business when ample evidence can be provided that proves espionage has occurred. Otherwise, no ethical violations are generally considered and inadvertent information exchanges are forgiven and forgotten. It can be said, based on the business evidence provided, that there are times when industrial espionage can be considered ethical. It is merely a matter of perspective. Individual or corporate violations will vary, but the outcomes of ethical allegations differ by the authority that judges them. Works Cited Chabrow, Eric R. “A Corporate Spy Story”, CIO Insight, Iss. 94, Jun 2008. Isaacs, Richard B. “Industrial Espionage”. The Lubrinco Group, Inc, 2005. Viewed August 23, 2010 at http://www.feeinc.com/articles/Security%20Management%20Online%20Business%20Practice%20Reference.pdf Joyal, Paul M. “Industrial Espionage Today and Information Wars of Tomorrow”. Integer Security Inc, 1996. Viewed October 22, 2010 at http://csrc.nist.gov/nissc/1996/papers/NISSC96/joyal/industry.pdf Lattman, Peter. “Starwood Lobs New Allegations at Hilton”, The Wall Street Journal, Jan 15, 2010. MacArthur, Kate. “Is your marketing plan really safe and sound?”, Advertising Age, Vol. 77, Iss. 28, 2006. Naef, Wanja E. “Economic and Industrial Espionage: A Threat to Corporate America”. IWS – The Information Warfare Site. Viewed October 23, 2010 at http://www.iwar.org.uk/infocon/economic-espionage.htm Winkler, Ira S. “Case Study of Industrial Espionage through Social Engineering”. National Computer Security Association, 1996. Viewed October 22, 2010 at http://csrc.nist.gov/nissc/1996/papers/NISSC96/paper040/WINKLER.PDF Zatlin, Jonathan R. “Out of sight: Industrial espionage, ocular authority, and East German communism, 1965-1989”, Contemporary European History, Vol. 17, Iss. 1, 2008. Read More