Where Do We Draw the Line Between Business Intelligence and Industrial Espionage - Research Paper Example

Where Do We Draw the Line Between Business Intelligence and Industrial Espionage? Table of Contents Table of Contents 1 Concepts 2 Analysis of Case Studies 3 Unilever V/s Procter & Gamble 3 Ericsson and the Swedish Government 4 Canal Plus v/s NDS 4 Review 6 Conclusion 6 References 8 Bibliography 10 Introduction Over the years the business scenario has gone through various transformations. The recent trend of business suggests competition to be cut throat and the sustainability of the business depends on the competitive advantage of the business units. One of the recent key factors in the development of a business has been that of ‘business intelligence’. Business intelligence can be defined as a descriptive subject that deals with the methods and applications to make the business decision making more efficient through information technology. It helps in other complementary activities of business decision making tool. Therefore, business intelligence is that force which helps an organization to grow in tough situations (Biere 2003). The determination of ethics in business is quite tough to judge. Therefore in recent times the business intelligence is getting mixed with that of industrial espionage. Industrial espionage is actually unlawful acquisition of trade secrets of rival companies. Often in present day business activities, industrial espionage is often termed as business intelligence but in reality there is a very thick difference between the two (Venzke 1996). Concepts Both business intelligence and industrial espionage are focused at the same outcomes but there is a fine line of difference between the two. The difference lies in the ethics and legitimacy of the business. Business intelligence is considered to be a legitimate action whereas industrial espionage is considered to be an illegitimate tactic adopted to compete with rivals. In many circumstances, it has been seen that the organizations try to collect some kind of relevant information regarding their competitor’s move. Many tactics like that of market scanning, industry profiling and also information obtained from recruiting managers of the competitor firm help in obtaining a number of useful information of the competitor’s firm. These sorts of activities are considered correct taking into consideration the fact that with each day the competition is getting fiercer. The acts of deception, lying and providing false information to the customers about the competitor’s product are commonly found in present day business tactics. These can be considered as industrial espionage as these are unlawful acts and not in the spirit of the business. But the main question that arises with significance to business operations is the consideration of legal and illegal act. Business concerns often make their illegal acts legal by using deceptive tactics. It is the duty of every business to be adopting competitive intelligence practices but avoid industrial espionage, in an attempt to be fair and ethical in their operations (Prescott n.d.). Analysis of Case Studies Unilever V/s Procter & Gamble Unilever V/s Procter & Gamble is one of the most highlighted cases of industrial espionage. Procter and Gamble had hired private investigators for getting information about the hair care business of Unilever. The investigators went through the dumps outside the office of Unilever in America and were able to gather valuable information from the discarded documents. Procter and Gamble earned valuable information that might have helped them undertake Clairol Hair Oil for which Unilever was also bidding. Though the efforts were made official by Procter and Gamble to come clean on the situation but already it had done enough harm to Unilever. Unilever filed a case against Procter and Gamble and finally went for an out of court settlement for US$ 10 million. It can be analyzed that most of the companies do not want to make their hand dirty; therefore they opt for outside parties for obtaining such information. Again this case has a lot to do with the dumping policies of different nations which is an external issue. But the obtaining of information through such practice was against the policies of Procter & Gamble. Therefore, it can be rightly said that the business intelligence turned out be an industrial espionage for Procter and Gamble (Roche 2008). Ericsson and the Swedish Government Ericsson apart from being a telecommunication company also made sophisticated missile guidance systems and radar for the Sweden’s Griper Fighter Plane. It was found that a few of the officials of the company sold out the company information to a foreign intelligence service. The Swedish government found out two Russian diplomats related with the spying. Ericsson got involved with the national security of Sweden and it was a very shameful act for the company. Even it resulted in a cold war between Sweden and Russia. This incident is an example of how an industrial espionage can affect a nation internationally. It can be critically analyzed from this case that relevant information which is sensitive should be handled confidentially. In this case, the junior officials were blamed for such a mishap, thus it is very important for the organization to have a strict policy on the flow of information relating to sensitive matters. This act of industrial espionage could prove fatal for the Swedish government and had been a threat to national security. Therefore, in no way this can be considered as business intelligence, it was actually a cheap tactics of obtaining information (Nasheri 2005). Canal Plus v/s NDS Both Canal Plus and NDS, being the subsidiaries of two rival groups namely Vivendi Universal and News Corporation respectively operated in the media industry. According to the allegations made by Canal Plus, NDS unlawfully cracked their codes and made it open for the hackers to hack their technology of pay TV systems. It resulted in the free viewing of the pay sites all over. Another company named ITV Digital that dealt with the canal plus cards suffered great losses for this piracy which resulted in the winding up of the company. Huge sum were invested in law suits between the companies but the case was later dropped because of mitigations between the two parent companies with a deal in Italy. From the illustration, it can be learnt that it was actually a wrong example of business intelligence. Business intelligence is aimed at better running of the company but not at the cost of illegal activity which causes harm to any other rival competitor. Fairness is very important in any business operations. The authenticity of the allegations made by Canal Plus is questionable but if it was so then it was also a very cheap stuff made by the NDS, whereas it can be vice versa if it is a defamatory act undertaken by Canal Plus to hamper the image of NDS (Crane 2005). Review In order to understand the difference between that of business intelligence and industrial espionage there are few basic factors which are needed to be considered. The tactics used in obtaining the information, the nature of the information and the purpose for which the information has been gathered is very essential in understanding the difference. There are several ways of obtaining the information. A clear cut illegal way of breaking into the office and stealing important documents or other means such as infiltrating and hiring detectives. And on the other hand there is a way of market research, which is tough, but is the better and legal way. Obtaining of confidential information by any means is related to industrial espionage, irrespective of the purpose. Again, the purpose by no means should harm the public interest. Any action not fulfilling these requirements can be termed as industrial espionage (Crane 2003). Conclusion There is a vast difference between business intelligence and industrial espionage. At times both the terms are taken synonymously but the truth is that, occasionally business intelligence extends to industrial espionage. Industrial espionage can never be supported. Any business without ethics in its operation cannot operate in the long run. Business is based on the basis of trust and reliance. To have favorable operations, the support of its stakeholders is very essential. A business entity by no means can afford to lose the support of its stakeholders and it can be obtained only through fair and legal operations with implementation of business intelligence, essentially avoiding industrial espionage (Watson and Wixom n.d.). References Biere, M. 2003. Business intelligence for the enterprise. New Jersey: Prentice Hall PTR. Carr, A. 1968. Is Business Bluffing Ethical? Harvard Business Review. http://www.myteacherpages.com/webpages/RGunnar/files/Carr%20Is%20Business%20Bluffing%20Ethical%20_edit_.pdf (accessed September 15, 2010). Crane, A. 2003. In the company of spies: The ethics of industrial espionage. ICCSR http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.127.7646&rep=rep1&type=pdf (accessed September 15, 2010). Crane, A. 2005. In the company of spies: When competitive intelligence gathering becomes industrial espionage. Kelley School of Business. http://crrm.u-3mrs.fr/web/IMG/pdf/In_the_company_of_spies_-_When_competitive_intelligence_gathering_becomes_industrial_espionage.pdf (accessed September 15, 2010). Nasheri, H. 2005. Economic espionage and industrial spying. Cambridge: Cambridge University Press. Prescott, J. n.d. The Evolution of Competitive Intelligence. Proposal Management. http://files.paul-medley.webnode.com/200000023-97ce398c7e/Competitive%20Intelligence%20A-Z.pdf (accessed September 15, 2010). Roche, E. M. 2008. Corporate Spy. New York: Barraclough Ltd. Venzke, B. N. 1996. Economic/Industrial Espionage. https://webhost.stealth-iss.com/documents/pdf/Economic.pdf (accessed September 15, 2010). Watson, H. and B. H. Wixom. n.d. The Current State of Business Intelligence http://www.teradata.com/library/pdf/IEEEComputerWatsonWixom.pdf (accessed September 15, 2010). Bibliography Coombs, W. T. 2008. PSI Handbook of Business Security. Westport: Greenwood Publishing Group. Fleisher, C. S. and D. L. Blenkhorn. 2003. Controversies in competitive intelligence: the enduring issues. Westport: Greenwood Publishing Group. Howson, C. 2007. Successful Business Intelligence: Secrets to Making BI a Killer App. New York: McGraw-Hill Professional. Murphy, C. 2005. Competitive intelligence: gathering, analysing and putting it to work. London: Gower Publishing, Ltd. Read More