Corporate policy and the ethics of competitor intelligence gathering

Competitor intelligence, information that helps managers understand their competitors, is highly valued in today's marketplace. Firms, large and small, are taking a more systematic approach to competitor intelligence collection. At the same time, information crimes and litigation over information disputes appear to be on the rise, and survey data show widespread approval of unethical and questionable intelligence-gathering methods. Despite these developments, few corporations address the ethics of intelligence gathering in their corporate codes of conduct. Neither managers nor management educators have paid sufficient attention to this topic. From a review of questionable intelligence-gathering practices reported in various literatures, the author identifies some important ethical principles to help managers draw the line between legitimate and illegitimate methods of information acquisition. The paper also discusses the costs of failure to heed these principles and suggests steps managers can take to provide ethical leadership in this area.Lynn Sharp Paine is an Associate Professor at the Harvard Business School. A former lawyer and occasional consultant in business ethics, she has published articles on business ethics, moral philosophy, and jurisprudence. Her current research focuses on ethical questions related to the flow of information and ideas.An earlier version of this paper was presented at the European Business Ethics Network conference held in Barcelona in September 1989. The author is grateful to members of that group for their criticisms and suggestions. She also wishes to thank Professor J. Ron Fox for his detailed comments on a version of the paper and Gary Edwards, Executive Director of The Ethics Resource Center, for discussions of intelligence-gathering practices and for making the Center's resources available for research. In addition, the staff at the Defense Industry Initiative Clearing House were most helpful.