How to Stay Within Ethical Boundaries | Business Town

How to Stay Within Ethical Boundaries

  While looking for information about your competition you need to respect the law! In this episode, Michael Sandman explains how to stay within ethical and legal boundaries.


How can you
gather information intelligence about competitors in a way that’s legitimate and that doesn’t get you or anyone else into difficulty? I’m Mike Sandman and I’m going to be talking about the basic rules of staying out of trouble while you’re getting useful business intelligence.

Do What’s Legal, Ethical, and Comfortable

The basic rule is to do not just what’s legal or not just what’s ethical, but what’s legal and ethical and what you are comfortable with. We call that area the green zone, you want to stay within that boundary. So lots of times, people say well something’s legal why can’t I do it, it must be ethical. Not necessarily, and similarly things that are ethical are not necessarily legal. I’m going to give you perhaps an extreme example to make the point: adultery is legal in most jurisdictions, but certainly I don’t think any of us would say it’s ethical. Are people comfortable with it? Well some people are and some people are not. But we’re looking for things that have a green thumbs up all the way across. So let’s look at another situation: going 5 miles per hour over the speed limit is not legal. Is it ethical? I don’t know, but I’m afraid I break down all the time, so very clearly I’m comfortable with it. Calling up a competitor and lying in order to get information under some circumstances is not illegal. If it was illegal to lie, most of us would have served time. But it’s not ethical to do that, and again there are people who are comfortable but we don’t want you to be one of those people. Calling somebody and not lying to get information is perfectly legal and it is ethical, as long as you identify yourself and explain that you’re looking for information about the business or about the marketplace. You don’t have to say that you’re thinking about competing in their marketplace, but you should be comfortable doing that and if you’re not don’t do it.

It’s Not Hard to Be Ethical

Stick with public sources and with talking to people who are not direct competitors. And finally mystery shopping is something that’s been practiced for years and years in the retail industry. It’s certainly legal, it’s considered to be ethical in some businesses and not in others, and you have to know the industry in order to decide whether or not you’re willing to do that. Learn by using the intelligence you can gather from inside the green zone. Use online resources: Google, company websites, public documents, social networking sites, look at public records, building permits, building plans, tax records. Observe, look at the businesses already in your intended market, see what they do and learn from them. Look at their mistakes and look at their successes. And talk to people – customers and suppliers, economic development officers, trade associations, chambers of commerce, competitors outside your immediate geographic area, and if you’re comfortable doing it, competitors that you’ll be facing, as long as you don’t try to deceive them. And then when you’re all done with it, build an analysis for your market that goes back to the five forces model developed by Michael Porter. Develop a strategy for success based on your own goals, your own capabilities, and your own assumptions about the market, and on what you’ve learned from the competition.

About Michael Sandman

Michael Sandman is Executive Director and founder of IFCIP, the International Fellowship of Competitive Intelligence Professionals.  Prior to forming IFCIP, he was Senior Vice President of Fuld & Company, preceded by a career of over twenty years as a senior operations manager of the composites industry, industrial textiles, and industrial process control systems. Mr. Sandman also has an extensive background in international business, including the transfer of technology to licensees and joint venture partners in the Pacific Rim, Switzerland, England, Mexico and Brazil.

Mr. Sandman started his career with a privately held composites manufacturer, and he subsequently became chief operating officer of a division of the Dexter Corporation, a multinational producer of specialty materials. At Dexter, he had responsibility for operations in North America, Europe and the Pacific Rim. He joined Fuld & Company in 1991, where he  was the managing partner until his retirement in 2014. In addition to his current role at IFCIP, he continues to do consulting in the field of competitive intelligence.

He is an adjunct faculty member at University of California-Irvine’s Paul Merage Business School and he has been a guest lecturer at Columbia University Business School’s advanced management program for senior executives, the University of Wisconsin’s Management Institute, the Boston University School of Management and Harvard Business School.  Mr. Sandman developed CI 101® and CI 202®, the courses he taught and were sponsored by the Strategic & Competitive Intelligence Professionals (SCIP). He has served on the peer review board of the Competitor Intelligence Review, and he is the author of the chapter on competitive intelligence analysis for Millennium Intelligence, edited by Professor Jerry Miller and published in 2000. He was elected to be a Fellow of the Strategic & Competitive Intelligence Professionals and received the prestigious Society’s Faye Brill Award in 2012.

Mr. Sandman received his B.S. (Economics) from Clark University in Worcester, MA and a M.B.A. from the Johnson School of Cornell University in Ithaca, NY.

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