Talk:Competitive Intelligence

Ethics is an important subject in many aspects of the businesses, it is particularly important when talk about competitive intelligence. When the businesses are motivated to actively gathering information about competitors, it is particularly critical that practices are conducted in compliance with ethical codes and legal guidelines. In the economic environment today, businesses often find their competitive landscape tightened due to the mass information available to their customers. To compete and survive in the market, businesses are looking to be more prepared and educated about their competitors. Sometimes, they risk the ethic when ignore the ethical guidance to gather information for a short period of time. However, managers must understand the importance of standardize ethics practices when gathering competitive intelligence information. The main reasons for businesses to collect competitor information are often the same: strategy planning, pricing planning, technology advance, etc. Managers want to find competitive advantage by making decisions with information lead to competitors’ weaknesses. New services surfaced to meet this kind of demands, like research companies and newsletter publishers. But the main questions resides whether the competitive intelligence are gathered within the ethical boundary. Many times, businesses only focus on results and intentionally ignored the ethical problem within. In the long run, such action will harm the business. Competitive intelligence can be obtained through many different channels and sometimes may have legal implication throughout the process. However, there are mainly 3 broad categories when talking about competitive intelligence ethics. First of all, some information can be gathered with misrepresentation. This can happen if some information was intentionally concealed or deliberately ignored when communicating with the source personnel. In today’s environment, multiple communication channels make misrepresentation a lot easier. With emails or other Internet tools, company can ask to obtain competitor information without direct contact in person. Businesses can also try to influence with rewards or incentives to undermine judgment. Seasoned professionals can be great resource for competitor information and they can reveal valuable information on key competitors. Many businesses fought to provide benefit to competitor’s employees for information. On the other hand, businesses should also consider that internal employees might someday become competitor’s great resource. When an employee is confused about what information should or should not be disclosed, they are more likely to slip on identify confidential information. If the business is unclear on ethic codes, employees may think the business is acting the same way. Another category involves the practices on the borderline of legitimate and legal definitions. Giving the P&G dumpster diving incident, businesses are clearly eager to learn competitor’s key information. In addition, consumers are more empowered with Internet right now to freely share their knowledge about products and services. Companies are more open in terms of information availability than ever before that increases the chance for information sharing in the public place. The article by Lynn Paine was written in 1991 when large firms just started to look at this subject. However, reading the article today, the information and guidance still applies to a lot of businesses right now after two decades. With the advanced technology, information is now being processed faster and the communication involved multiple channels. This enables the businesses today to gather competitor information in different ways. But managers also need to be aware of that company internal information can also be venerable to be retrieved by competitors. This calls for an even better understanding and definition on competitive intelligence ethics. Although the definition may be ambiguous for some practices, a clearly defined competitive information ethics guideline establishes the foundation of a framework to reduce possible illegal activities from employees. The Pratt & Whitney case is a good example on aspects involved when setting up a competitive intelligence ethics code. In the aero-engine manufacturing industry, the competition is intense among the top players. In order to be prepared to bid on new projects and orders, information about competitors can be very useful. Information about competitor’s pricing strategy is important when customer is cost conscious that Pratt & Whitney can offer lower prices to win over the business. Competitor’s technology research information is also critical for Pratt & Whitney as the industry is very innovative to introduce new technology solutions to customers. United Technologies started its ethics initiatives with a main purpose to provide guidelines when employees gather competitor information through informal channels. Some common practices described in the guideline to argue their legitimacy. Some feared that the guideline would limit company’s ability in searching for information because employees will be discouraged to find information like before. However, this practice is really going to help Pratt & Whitney in the long run because their employees are more educated to respect competitor privacy and their own company’s confidential information. This was still a new concept in the business world at the time where the legality on some competitive intelligence practices was yet unclear. For a business engaged in a highly competitive industry, focus can easily be set to business development and overlooking the hidden risk during the process. It is not easy to change company culture and perception and the code of ethics has big impact on business operations. Many questions brought up by the employees were seeking for clarifications and detail instructions. One approach can be utilized is to establish a continuous knowledge base with field employees because competitive intelligence subject will continue to impact the business operation. Frequent seminars or information sessions can be a good format to engage employees to ask questions and discuss the different aspects they came across in gathering information from their sources. Today, UTC is recognized for its responsibility and operational excellence. Ethic is considered as one of company’s Key Performance Indicators and the management believes ethical practice would eventually reward the company with trust, respect, and integrity. Giving that many big companies had experiences in negative competitive intelligence practices, UTC’s approach to create a formal and organized environment on the subject can be viewed as solid foundation for its growth. Although UTC’s own practice won’t necessary change the industry culture, but the company is reducing its own risk by restricting itself from any illegal activities. I think for any company to sustain a long and steady growth in a competitive industry, it should have better defined code of ethics to guide the employees to avoid possible illegal conducts and better prepare themselves to identify situations they should not be engaged.