Blurred Lines between Competitive Intelligence and Corporate Espionage

Blurred Lines between Competitive Intelligence and Corporate Espionage

Harish C. Chandan (Argosy University, USA)
DOI: 10.4018/978-1-5225-1031-4.ch001
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In today's globalized world, gathering Competitive Intelligence (CI) and using it strategically to gain a competitive edge has become a necessity. Integrating knowledge management and CI helps firms to respond quickly to changing business conditions. Organizational culture, ethics, and emotional intelligence influence knowledge sharing which enhances CI scanning. Employees, knowingly or unknowingly, can become the weakest link in a firm's efforts to protect business intelligence. There is reluctance in the organizations to address the issues of ethical and legal means to gather CI. Corporate espionage is a silent, enigmatic threat to the competitive position of firms and nations. Annual losses to corporate espionage are estimated to be US$300 Billion. A 3-step strategy of prevention, detection, and remediation helps to combat corporate espionage.
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Competitive Intelligence (Ci) Conceptual Framework

CI gathering helps a firm conduct benchmarking, manage marketing risk, and promote knowledge and innovation management (Carlton, 1992). There are ethical and legal issues regarding gathering CI (Attaway, 1998). The benefits of CI include identifying problems in the existing business, providing better customer assessment, uncovering new business opportunities, provide a basis for continuous improvement, increasing business volume, and improving speed to market and competitive survival. There are multiple roles of CI including supporting strategic decision-making, providing an early warning system of competitive threats and opportunities, benchmarking competition, supporting strategic planning and implementation, and supporting competitor tracking (Olszak, 2014).

The CI concept is well-grounded in the extended approach to resource-based view theory of strategy which includes intangible resources such as CI (Ahn & York, 2011). The concepts of CI and environmental scanning are related although CI is more specific than the broader environmental scanning. CI is different from BI which deals with analyzing mostly internal business processes for improvement. BI has the most impact on operational and tactical decisions. CI refers to the monitoring and analyzing external environment including competitors, customers, and suppliers, and also refers to the actionable knowledge gathered legally and ethically by an organization from publically available information and open sources for economic and strategic purpose (Olszak, 2014). CI represents the information about the present and future behavior of competitors, suppliers, customers, technologies, government, acquisitions, market, and general business environment (Vedder & Guynes, 2001, 2002). Competitor intelligence gathering involves the aggregation of competitive information to facilitate strategic development and a competitive advantage.

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