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Rajita Chaudhuri
Dean, Centre for Undergraduate Studies
at
The Indian Institute of Planning and Management |
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Play by the rules
Corporate Espionage is an expensive & dangerous proposition. But that has not deterred the leaders of Global Inc. to get their hands dirty. They say, all is fair in war, business & politics. But is it?
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 A strange story leaked into the British press in the 90s about Richard Branson. It said that the garbage man refused to collect trash at a Branson owned nightclub because it included HIV infected needles. The story was baseless. However, it was not some gossip column that came out with this story. It was a well planned strategic move involving senior corporate executives of Virgin’s competitor, British Airways. Lord King, the British Airways Chairman, conducted a smear campaign against Branson – one of Britain’s wealthiest and best known entrepreneurs. BA’s PR Consultant, Brian Basham had been intentionally undermining him and his company’s reputation in the press – why? Well although Virgin was small, yet it posed a potential threat to the huge national carrier, BA, especially on key routes between London and United States and Asia. As a result, BA indulged in all kinds of espionage to destroy Virgin. It even went to the extent of spreading rumours about the unsafe conditions of the flights and how Branson does not allow his wife to fly Virgin due to safety concerns. In the end, in one of the most humiliating, most bitter and protracted libel actions in the aviation history, BA finally apologised to Virgin and even agreed to pay damages to the tune of £3 million.
Last year Oracle accused SAP of a grand scale corporate theft, of downloading and gaining illegal access to its computerised data, thus helping it to undercut its prices.
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 I Spy with my little eye
BA hacked into Virgin’s reservation system, called up Virgin customers, lied about cancellations and switched them to BA flights. It got caught. Procter & Gamble too indulged in corporate espionage against its competitor, Unilever. It learned all the myriad details of Unilever’s hair care business. If sources are to be believed, then P&G hired corporate spies so that its brands Pantene, Head and Shoulders and Pert could beat Unilever’s Salon Selective, Finesse and Thermasilk! When they feared the lid would blow off, P&G in the most unusual twist of cases, informed Unilever that it had engaged in this activity.
Last year, Mumbai police arrested a Tata-owned VSNL employee when he was suspected of leaking crucial information to a rival telecom company. The man, secretary to the MD, had given away the minutes of the meeting to a rival company.
Back in 1997, the engineer, leading the team, which was designing a new razor for Gillette, was sent to jail for leaking the confidential designs to competitors like Warner-Lambert. What’s more, even Oracle Chief, Larry Ellison, had himself ordered professional snoopers to pilfer the garbage of his arch-rival Microsoft’s Bill Gates.
GM found some blueprints of its super-efficient yet-to-be-operational assembly plant with Volkswagen. It was a plant with which GM believed it would topple VW’s dominance in the small car market, especially in emerging markets of Western Europe, China & elsewhere. Jose Arriortua, the head of purchasing for GM, suddenly switched to Volkswagen. It was rumored, he took 20 boxes of documents on research, manufacturing and sales. Though VW admitted no wrong doing, but in one of the largest international corporate espionage cases, VW agreed to settle the civil suit, by paying GM $100 million in cash and $1 billion on GM parts, over a period of seven years. Jose, who was responsible for the turnaround of GM, and had a stunning success record at GM, was also sadly responsible for creating the espionage case of the century. The case had such drastic consequences that it even threatened to spoil diplomatic relations between US and Germany.
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