How to Create a Code of Ethics for Competitive Intelligence - dummies

How to Create a Code of Ethics for Competitive Intelligence

By James D. Underwood

When developing a code of ethics to govern competitive intelligence behavior throughout your organization, the goal must be unmovable standards — clear rules that aren’t open to interpretation.

How to establish an immovable set of ethical standards

Here’s an approach to creating ethical standards for your organization that establish clear directives and discourage creative moral thinking:

  1. Begin with the four basic rights that appear to be universal in all cultures and societies.

    State that all people have these rights and that every employee in the company must respect them:

    • Right to live (covers assault and life issues)

    • Right to own property (prohibits theft and fraud)

    • Right to freedom (bans discrimination and sexual harassment)

    • Right to be told the truth (prohibits fraud and deception)

  2. Add one more item to complete your ethics statement:

    Every person in the company must obey all applicable laws and regulations.

The absolute and universal nature of the ethical standards leaves little room for individuals to convince themselves that unethical behaviors are okay depending on the situation. When applied to CI, these universal standards may translate into the following rules of engagement:

  • Don’t lie, cheat, or steal.

  • No looking through another organization’s trash (also known as dumpster diving).

  • Don’t take or receive an organization’s proprietary information.

  • Don’t hack into an organization’s network.

  • Don’t listen in on conversations, spoken or written, that you’re not engaged in.

  • Don’t pay for confidential information.

  • Always identify yourself — your name, position, and the organization you represent — when requesting information.

  • Don’t mislead anyone or otherwise coerce them into sharing information.

  • Don’t request information from someone if the sharing of that information poses a risk to the person’s job or reputation.

  • Don’t ask new hires to share proprietary information from former employers.

Don’t let the board of directors or the senior executive team establish ethical standards for the organization on their own. They may be wise in operating a business, but they’re probably amateurs in establishing, encouraging, and enforcing ethical behavior because these positions tend to emphasize growth and profit over ethics.

How to avoid common pitfalls in codes of ethics

When you’re drafting ethical standards for your organization, be careful to avoid two common pitfalls: cultural relativism and legal limits.

Sidestep the false floor of cultural relativism

Cultural relativism essentially tells you to behave in whatever manner is acceptable in a particular culture. In some situations, employees may feel that doing business would be much easier if they compromised the organization’s unwavering ethical standards.

While certain practices may be culturally acceptable in the host country, they’re still violations of the law. The reality is that such behavior can threaten the existence of the firm because unless these behaviors are discouraged and perhaps even result in stiff penalties, employees will begin to think of them as acceptable. To prevent the cancer of cultural relativism, your organization’s leaders should do the following:

  • Remind employees that the firm’s ethical standards apply regardless of the situation and regardless of which country they happen to be doing business in.

  • Support people who uphold the ethical standards of behavior.

  • Correct — or if necessary, terminate — employees who decide to put results ahead of ethics.

Avoid the legal-limits approach

According to the legal-limits approach, actions are acceptable as long as they’re not illegal. It allows and even encourages some people to get as close to the line of illegality as possible without crossing it. This attitude is dangerous in business because it often ultimately leads to crossing the line into illegal behavior.

Even if actions don’t cross the line, they may create the perception that your organization bends the rules, which violates the rule of remaining above reproach. So to discourage legal-limits thinking throughout the organization, try the following tactics:

  • Reject legal-limits thinking whenever it arises.

  • Reinforce the unwavering standard of ethics as defined in the company’s ethics statement.

When conducting international business, you may need to work even more diligently to reinforce your ethical standards. Some countries have no limits. Regardless of how liberal the local laws and customs may be, your organization must act in accordance with its own higher principles.

Don’t let the pressure to maximize profits drive your organization to test the legal limits or compromise its own ethical standards.

How to communicate your ethical standards to the competitive intelligence team

Setting standards isn’t enough. Everyone in the organization needs to commit to these standards and adhere to them in any and all situations. To ensure adherence, do the following:

  • Clearly present your organization’s ethical standards to all personnel. Include your standards in your employee handbook and post them in locations where all employees can see them.

  • Stress just how important honoring these standards is to the reputation and continued success of your business. Especially educate your organization’s leaders so they can help build a culture of ethical behavior.

  • Set and enforce consequences for failure to adhere to any of the standards. Consider a system of warnings, penalties, and even termination for repeated or egregious offences.

Tap the power of symbolism to communicate to a large number of people the significance of upholding ethical standards. Here are two suggestions for increasing the impact of symbolic actions:

  • Engage higher-ups in symbolic acts. The higher the position of the person making the pronouncement, the deeper the impact of the message.

  • Include more people. The larger the audience, the deeper the impact of the message and the wider it spreads.

If you’re outsourcing CI, hire only professionals who have a solid reputation, and be sure that you communicate your ethical standards to them. If they break the law or use unethical or unprofessional means to produce intelligence, you may be held legally responsible, and their actions will reflect poorly on your organization.