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Competitive Intelligence: What's Unethical About It?

Wednesday, 9 Mar 2011 | 11:54 AM ET

Where would you draw the line at collecting intelligence about competitors?

Flying Colours Ltd | Digital Vision | Getty Images

A new survey by consulting firm Fuld & Co. shows that while financial services firms and tech companies might be the most aggressive in collecting intelligence, other industries aren’t that far behind.

As reported by the WSJ, "104 business executives were presented with hypothetical scenarios that gave the executive an opportunity to collect intel about a competitor, but straddled the ethical line. Participants could rate the scenario as "normal," "aggressive," "unethical" or "illegal.""

The results seem partly on target, but mostly worrying.

For example, "One scenario asked whether it was all right for the executive to remove his identification badge during a trade show, which would make it easier to speak to competitors without them knowing his identity."

The result: "Most industries rated removing the ID badge as aggressive, while health-care and pharmaceutical executives thought it was unethical."

But the report didn’t restrict the questions to public forum etiquette. "The executives were asked if it was alright to sign up for an interview at a rival company's job fair to see what they could learn from a recruiter."

Result: "Every industry thought the tactic was unethical except for government, which merely found it aggressive."

While I'll let you get over the fact that this scenario suggests our government has a completely different outlook on ethical behavior, overall the report seems to give health care and pharmaceutical companies brownie points for being squeamish about their approaches.

One factor detailed by the Journal: The level of regulation weighs heavily on the consequent level of squeamishness.

While each industry seems to be toeing its own line of ethics vs. competitive intelligence, risk for most means higher profits, and as Larry Kahaner, author of Competitive Intelligence says in the report, "The more money that's involved, the less squeamish people become. "If companies have gotten away with stuff over the years, they don't clean up their act."

Is it then okay to assume that the surveyed companies probably have some sort of written guidelines on intel collection?

A third, says the report, neither have guidelines nor do they share them with employees. What you don’t know doesn’t hurt. Right?

Aman Singh is the Senior Editor, Corporate Social Responsibility with Vault.com and the author of Vault's CSR blog: In Good Company. She is a New York University alum and previously wrote for The Wall Street Journal. Her area of work includes corporate social responsibility, diversity practices and sustainability, and how they translate into recruitment and strategic development at companies. Connect with her on Twitter @VaultCSR.

Comments? Send them to executivecareers@cnbc.com

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