Corporate espionage is an illegal activity though it is on rise in industrial settings. Organizations consider it as one of the techniques to increase their market share and beat the competitor. Various laws have been approved to combat these practices on domestic and international levels. Violation of these acts can result is heavy fines and suspension from business sector.
The advent of information technology has revolutionized the business practices. It has facilitated business operations to a great extent. In the modern 21st century, no organization can expect its existence without information technology. However, every man made system has flaws. Information technology has posed serious challenges for organization with reference to their competitive advantage in the market. As many organizations work on creative and novel solutions to attract the customers, the market value is possible as far as the offers are unique. As soon as other organizations copy the style of the market leader, the competitive edge is lost and demand of a particular product becomes elastic.
In order to protect their uniqueness, the corporate world has introduced the concept of intellectual property. The term property gives the ideas that something is possessed by an entity and its use by any other entity is illegal. The term intellectual shows that the property is intangible. It can be an idea, design, feature etc. The combined term of intellectual property means that the ideas and designs belonging to one organization are actually owned by them and others should not copy them. They are like property of an organization and their use by others will be a crime no less than a theft. Every organization has corporate secrets which are related to product development. The process of spying in an organization to find some confidential information is known as corporate espionage.
This paper casts light on the various aspects of corporate espionage.
History and Origins of Corporate Espionage
Business organizations are established to serve the needs of people through offering various products and services. According to market structure, the number of competitors varies. Generally speaking, there are competitors in every market and growth of one organization results in retrenchment of the products and services of other organization. Hence, organizations are always in the battlefield to compete with each other. The corporate ethics focus on the need of promoting one's products and services and adopt the best business practices. There are many organizations which bypass the ethical standards and try to build their strengths on the weaknesses of other organization. In order to get information about weaknesses of the competitors, corporate espionage is in practice.
It goes without saying that such practices are in place since the inception of business activities.
Competitive Intelligence vs. Corporate Espionage
It is important to mention that there is significant difference between corporate espionage and competitive intelligence. Competitive intelligence refers to the process of staying informed about the offers made by competitors in the market. It is one of the needs of business organizations so that they can match their standard with that achieved by the competitor.
Organizations usually develop a department of competitive intelligence whose job is to keep an eye on the performance and activities of competitors. The personnel serving this department are the users of the products and services offered by competitors. Through the use, they get an idea about the quality and features. They compare them with the ones offered by them. In case of discrepancy, they propose the same or better features for their product.
The competitive intelligence department has few other functions as well. It is impossible in every industry that competitor's products and services are actually consumed. Hence competitive intelligence department keeps an eye on the features which are marketed in their above the line and below the line advertisements. Sometimes, the advertisement tactics are also copied in addition to feature enrichment. In case of seasonal packages and deals, competitive intelligence department becomes highly active.
Hence, the difference between competitive intelligence and corporate espionage is clear. The former one is an unethical and in certain domains illegal activity. The latter one is the requirement of business organizations and highly recommended.
Forms of Corporate Espionage
The methods to peep into the competitors' firm to steal corporate secrets are changed. Previously there have been the methods to have friendship with an employee (Javers, 2011) of competitor's firm who is offered a sum of money to leak their secrets. Organizations also involve themselves in head hunting activities in which they look for the competent employee of competitors and offer him job. In this way they can use the talent and get benefit from the experience which he has have during his service in competitor's firm.
The roots of every spying related activity is found in defense activities. Hence the advancements taking place in military forces' mechanism is reflected in the business activities as well. As mentioned earlier, information technology facilitated business operations, it is important to mention that the first computer network on the face of earth was established for defense forces. It was the project of U.S. Department of Defense which was named as the Advanced Research Project Agency Network (ARPANet). The purpose was to ease communication between the various entities of U.S. Department of Defense. As its utility was affirmed with the passage of time, its use was expanded in commercial organizations for civilian purposes. Gradually, universities, business organizations and other governmental sectors introduced computer networking in their systems. The common backbone was established and the connectivity was given to every entity seeking use of networking facilities. The network continued to expand and it is named as Internet.
As there has been common backbone for information communication, spying in the information transferred by business competitors became easy. Organizations developed systems to spy into the information that is transferred by the competitors.
Agents and the Process of Information Theft and Sabotage
The spying agents have multiple options to temper with the information that is communicated using the computer networks. Either they steal the information so that it is not delivered to the destination or they manipulate it so that wrong information is delivered to recipient. In both ways, the attackers get access to genuine information and use it to hurt the interest of competitor. Information theft and sabotage both are undesirable activities and modern corporate lawyers are trained to protect the interests of their clients.
Information is transferred on the computer networks in the form of signals. Though there are many encryption techniques and networking hardware is developed keeping in view the requirements of information security, the software experts have ways to peep into the information being transferred. Hacking and cracking are most common activities in this digital age and organizations need to have data security experts who design unique and specialized encryption algorithms to protect their data.
Notable Cases of Corporate Espionage
As mentioned earlier, corporate espionage is in practice since long, there are uncountable cases reported in this regard. It is important to mention that the organizations conduct these activities disguised in competitive intelligence or report as if they have come across this information by chance. In high tech industries the use of corporate espionage is more common as investment is high and it is almost impossible to change the product once it is launched. Below are a few cases of corporate espionage.
Boeing Aircraft Company is known to be the leader in the market of aircraft manufacturing. It has always been in rivalry with Airbus and both accuse each other of unprofessional and unethical practices. In addition, Boeing has been sued by U.S. defense giant for peeping in the bidding information (BBC, 2005).
Proctor & Gamble has been involved in corporate espionage against Unilever. Both the organizations are multinational and have a long product line. In order to cut the market share of Uni Lever, P&G initiated the activities of information stealing related to hair products (Business Pundit, 2011).
Laws, Provisions, and Restrictions against Corporate Espionage
As corporate espionage is on rise, business experts and researchers are looking for the ways to combat it. The issue is equally important for network specialists as well. Data security has become a burning question these days and it is important to have strict measures against it. Mentioned below are the steps carried out in this regard.
Virtual Private Networks (VPNs) are designed to ensure secure data transmission by the organizations. The use of generic email IDs and common Internet platform is discouraged for corporate communication. Organizations have intranet developed for their communication.
The information systems are developed using secure platforms like Oracle to prevent data theft attacks and phishing activities.
Various laws are passed on domestic and international level to ensure data security and privacy.
Domestic Laws to Safeguard Businesses from Intellectual Property Theft
As the issue of corporate espionage is rising in various parts of the world, the government officials are attending this issue seriously. The multinational organizations are particularly concerned about their intellectual property as their main objective…