When practitioning Competitive Intelligence, you always balance on the line between what information is available, and what information isn’t, but can be made available. In the latter situation the question is at what price this information can be obtained. Does it involve a visit to the competitor’s showroom while portraying oneself as a customer? Or making employees of your competitor believe they are participating in a market research project while you’re collecting interesting information for your own benefit? When thinking about these situations, questions about ethics come forward. According to Julia Evans, the writer of the interesting paper ‘Misrepresentation in CI: An Ethical Analysis’, the most common ethical questions in CI concern misrepresentation:
Misrepresentation occurs whenever a CI practitioner lies or misleads a competitor about their identity in order to gain access to information.
Julia Evans distinguishes two forms of misrepresentation: misrepresentation by commission, and misrepresentation by omission. Misrepresentation by commission occurs whenever a CI practitioner intentionally uses a deceptive strategy in order to obtain information. Misrepresentation by omission occurs whenever a CI practitioner doesn’t correct a mistaken assumption about one’s identity or purpose. This is the case for instance when a competitor thinks a CI practitioner is a costumer because he or she is looking around in a showroom. When engaging in a conversion while the CI practitioner doesn’t inform the competitor about who he is or what he’s doing, it is misrepresentation by omission. Taking it a step further, when the CI practitioner is for instance playing a role as costumer and tries to negotiate about prices, it is a misrepresentation by commission. The difference between misrepresentation by omission and by commission lies in the fact that the former is about holding back information about oneself and one’s activities, while the latter is about giving the wrong information, or in other words just telling lies.
While lying as such isn’t illegal, when there is a particular situation, lying can be classified as ‘fraud’, which is illegal (although Julia Evans concentrates on US law, I can imagine that this would also apply in Europe):
If a lie is 1) a misstatement of material fact, 2) known by the speaker to be false and intended to induce the receiver to rely upon it, and 3) was justifiably relied upon and caused the receiver to suffer actual damages, then it meets the legal definition of fraud (Ehrlich, 2006). Fraud has not only the risk of criminal law behind it; it runs the risk of civil law as well.
The obtaining of information via misrepresentation can be seen as stealing as well:
If confidential business information is property, than obtaining that information through misrepresentation is stealing.
To avoid illegal and unethical behavior it is desirable to create an ethical code for CI. There are several reasons why this should be done. First, it is good for the CI profession as a whole, because it can protect and repairs CI’s (not always positive) reputation. It also is beneficial to corporations, because bad ethics concerning CI can damage the company’s reputation as well. Second, a code of conduct can help CI practitioners respond to criticisms from outside the industry. The third and last reason is that a set of standards is one of the marks of a true profession.
Julia Evans mentions some writers and organizations that have ideas about the contents of an ethical code for CI. The Society of Competitive Intelligence Professionals (SCIP) for instance, encourages intelligence professionals in The Code of Ethics for CI Professionals to accurately disclose all relevant information about themselves and their purpose prior to all interviews.
A survey by Treviño & Weaver showed that ‘the intent to deceive’ can be perceived as a guiding principle among the investigated CI practitioners. The results also showed that overt deception shouldn’t be approved, while hiding information (misrepresentation by omission) is not perceived as serious misbehavior. This feeling intensifies whenever the obtained information is available in the public domain.
However, Shing & Spence (writers of the article: Investigating the limits of competitive intelligence gathering: is mystery shopping ethical?), maintain that any misrepresentation is unethical, no matter how small. They claim that sales information isn’t available in the public domain, because retailers can withhold information to anyone they want, including their competitors. Although this sounds ideal, Weiss, writer of the article How Far Can Primary Research Go?, says it is an untenable position, because it is impossible to draw the line between ethical and unethical acts in order to obtain information. Weiss concludes that in that case only the investigating of secondary material about competitors is ethical.
Collins & Schultz (writers of the article A Review of Ethics For Competitive Intelligence Activities) maintain also that misrepresentation is justifiable, because of the nature of the business realm. According to Collins & Shultz the duty to keep a secret (a trade secret for instance) falls on the owner of the secret, and not on the one who is attempting to gain the knowledge. Julia Evans questions this position, and according to my opinion she does this rightfully. I think that, for instance, taking a document with confidential information from someone’s desk is not approvable, and certainly not just because the owner of the paper should have taken better care of it. According to me, this is still stealing and therefore unethical.
There are obviously many viewpoints to perceive an ethical code for CI. Think about what it means to you to be ethical. Does it involve a little lie now and then, or do you portray yourself to be someone else for your own (and your companies) benefit? The whole discussion wraps around the question when or why lying is allowed. Is it, as Shing & Spence say, never allowed to misrepresent yourself? Or does this compromise the field of CI, and make primary investigation impossible, as Weiss maintains? Immanuel Kant, a famous philosopher, claims that one should only act according to a maxime (which is a practical principle, like ‘lying is allowed whenever this is in your own benefit’) if you want this maxime to be a universal law (The Categorical Imperative). This means that you should act the way you want others to act. If you look at our subject from this point of view, do we want everybody (in the CI profession) to misrepresent themselves whenever this seems usefull? I don’t think we do, but what do you think? Is honesty the best policy?
Article: Misrepresentation in CI: An Ethical Analysis by Julia Evans