Joel V. Copeland,
President
CINErgy Media Communications, Inc.

David C. Smith,
President
Council for Ethics in Economics

In today's marketplace, new products and creative ideas are often the key to business success. Accurate information about competitors and their plans is essential. Companies undertake extensive efforts to gather information about their rivals.

Much of this competitive information exists in public sources; collecting it raises no ethical concerns (e.g., reviewing patent records). At the other extreme, some ways of acquiring information are clearly illegal (e.g.. wiretaps).

The tough ethical questions fall between these extremes. Managers in competitive industries sometimes face decisions about whether to acquire and use information obtained from a rival's employees or customers.

For this Conversation, David Smith, President of the Council for Ethics in Economics introduced Joel Copeland, President of CINErgy, Media Communications, Inc. as the primary moderator. Using video vignettes, Copeland presented various situations taken from one of the Council's case studies entitled "Ethical Dilemmas Regarding Competitive Intelligence". This was written by Thomas Furtado, Corporate Ombudsman, United Technology Corporation, United States. The following example from this study was presented.

You are the engineering director of a large international firm working on a new compact disk that will be able to produce high quality video on the same size surface as an audio disk. You have two formidable competitors and stakes are enormous. Not only must this small disk be capable of playing movies up to three hours duration, but to capture the video market from cassette tape, the equipment must have recording capability. All three of you have solved the first challenge, but no one seems to be breaking through on the recording issue. Your own engineers have had little success in this regard.

While attending a technical seminar on the subject whose participants also include representatives from your competitors, you listen to a presentation by an engineer from one of the competitors. The presentation touches on the recording problem in a way that makes you think they may have solved the problem.

The Council Conversation attendees were then asked: Which actions of the following would be acceptable?

a. Making notes for an internal memo summarizing the presentation.
b. Taking back to the office the written summary which the presenter distributed.
c. Asking the speaker for a copy of his presentation slides without identifying yourself, although you are wearing your name tag.

Responses

1. Since the seminar included participants from competitor firms, the speaker should know this and be careful not to share proprietary information from his firm. He should also know if it would be appropriate to share the slides.

2. A company sends a representative for learning purposes and this person is obligated to take back information and handouts for the company staff to read.

3. This person does not have any obligation to identify himself since the seminar was held for persons in the field and the speaker knows that competitors would be there.

4. These actions are appropriate.

J. Copeland then presented several more situations that might occur at the technical seminar and each time asked the Council Conversation attendees if the action taken was acceptable. Some of the responses are summarized for each situation.

Situation

You remove your name tag and ask for a copy of the speaker's presentation, pretending to be with a customer company.

Responses

1. When you remove your name tag, are you doing this to deceive or for other reasons? Attempt to deceive is wrong.

2. When you misrepresent yourself, it is wrong.

Situation

On the elevator later, you realize that the conversation next to you is between the presenter and a colleague. They are discussing details of the recording solution. You listen carefully and do not identify yourself.

Responses

1. Company personnel should not be careless about discussing proprietary information in a public place such as an elevator.
2. There is nothing wrong in listening in a public place.
3. The worst thing a company can do is not take advantage of competitor information in public places and public documents.
Situation

You look in the podium as the last people are leaving and see an internal briefing document the presenter left behind and you decide to take it. Is this the way to gather information? Does it matter if it is marked "proprietary"?

Responses

1. It doesn't matter whether if it is marked proprietary or not, it doesn't belong to you and should be returned to the speaker.

2. If the item is not a handout, then you have someone else's property. This is no different from picking up a tape recorder that is not yours. You should take it back and say you are interested and could I have a copy? If the speaker says no, it is clear that you should not have it.

3. Unfortunately, if you have read the information, it is in your mind even if you give the document back.

Situation

The presenter approaches you later and tells you he is disillusioned with lack of recognition and advancement opportunities. He confirms that his team has solved the recording problem and hands you the technical data that will enable you to keep pace. As he walks away, he adds that he would like to talk with you about coming to work at your company. You accept the data and share it with your internal team.

Responses

1. In a company where the pressure is high, a disgruntled employee might take this action. Many persons might think: Here is someone who has handed me this information; if he is stupid enough to do this. . . sure, I'll use the information. However, if the company who signs my paycheck would not want me to take the information, then I would not take it. 2. Are we prepared to profit from the unethical acts of other people? Am I willing to use information resulting from the act of an unethical person even though I haven't done anything unethical?

Situation

Another conference participant (not affiliated with any of the competitors) sees you afterward and hands you an internal document from the competitor whose engineer made the presentation. You accept the document and share it with your internal team.

Responses

1. The question here is- - -Are you willing to gain an advantage through the unethical acts of others? Ask yourself: Is this the way I want to do business?

2. A person should know whether his company has a code of ethics in other words, would the company want me to take this information? It would be easier for an employee to make a decision about taking or not taking this kind of information if there is a code of ethics that was brought to his attention when hired.

3. People find justification for anything they want to do even though it may be unethical or illegal.

Situation

An anonymous person calls your hotel room and tells you (before you have a chance to raise questions) several key statistics that, together with the information presented publicly, give you enough data to take a new direction in solving the recording problem. Or, you simply find a critical document from the competitor in an envelope outside your hotel room door. You use the data or the document with your internal team.

Responses

1. How do you know the information from an anonymous source is accurate?

2. How do you know whether you have received stolen goods? Using it might be illegal as well as unethical.

The discussion brought forth other questions such as:

1. Should covert methods be used to expose practices that have health or safety implications for workers or the public? Answer: Before using such methods, an effort should be made to find other ways to determine the facts. You might have to weigh the stakes involved.

2. Do the ends justify the means? Usually "no" was the consensus of opinion.

3. What about the methods used by some investigative reporters? Different views were presented. One asks: Are covert methods used to advance public interest or are they merely for media sensationalism? The other suggests that here the means might be acceptable to the general public but at the price of a specific company's self interest.

4. Is a whistle blower who exposes wrong-doing violating the contract with his company when he is hired? i.e., I provide services in exchange for salary and I am a help to the company so we both gain by this relationship.There was no consensus on this question.

5. What about the employer who asks his employees to do something below their value systems? Answer: This could result in employees feeling that there is justification to do anything they want to do even though it may be unethical or even illegal.

In addition to these questions and the ensuing discussions, J. Copeland pointed out that competitive intelligence as a professional pursuit by many businesses has resulted in full time positions in this field of activity. This is the business of gathering information about a competitor, analyzing it and using the analysis to benefit the company who has the competitor. In 1986, the Society of Competitive Professionals (SCIP) was founded. The Society has 44 countries represented in its membership that now totals approximate 5,000 professionals. Ethical guidelines for its members have been developed by the Society and are posted on their web site (http.//www.scip.org/ethics.html). They are:

• To continually strive to increase respect and recognition for the profession.
• To pursue one's duties with zeal and diligence while maintaining the highest degree of professionalism and avoiding all unethical practices.
• To faithfully adhere to and abide by one's company's policies, objectives and guidelines.
• To comply with all applicable laws.
• To accurately disclose all relevant information, including one's identity, organization, prior to all interviews.
• To fully respect all requests for confidentiality of information.
• To promote and encourage full compliance with these ethical standards within one's company, with third party contractors, and within the entire profession.

REFERENCES

Competitive Intelligence: A Brief, Essential Reading List
Compiled by Jerry Greenberg, Fisher College of Business, Ohio State University

Ettore, B. "Managing Competitive Intelligence." Management Review, (October 1995),15-19.

Gilad, B. & Gilad, T. The Business Intelligence System: A New Tool for Competitive Advantage. New York: AMACOM, 1988.

Kahaner, L. Competitive Intelligence. New York: Simon & Schuster,1996.

ABOUT THE MODERATORS

Joel Copeland is President of CINErgy Media Communication, Inc. a Columbus, Ohio based video and multimedia company serving the not-for-profit markets. Since 1992 CINEgy has provided video services for the Council's conferences and educational materials. Currently CINErgy is helping the Council design and develop a series of interactive business ethics case studies to be distributed on CD-ROM and the World Wide Web.

Dr. David C. Smith is president of the Council for Ethics in Economics. For the past 19 years he has worked with leaders in business and the academy in developing new case materials for the improved teaching of business ethics in colleges, universities, and corporate training programs. Dr. Smith frequently leads seminars for companies and not-for-profit organizations using ethics case studies.

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