Student paper  – business ethics – case discussions

Case 1

Question 1

This case is typical in business, which involves a lot of business ethics issues. A variety of complex reasons causes the final result.

I want to discuss this case from two aspects:

One side, we should clear the responsibilities which party is the root and which party is the leaf.

I think Argus Company is the biggest responsibility party:

  1. Susan, a direct participant, was the computer operations manager. She was responsible for lease, purchase, maintenance and disposition of all computer equipment and services for Argus.
  2. Craig, a direct participant, was the director of shared services. He was Susan’s immediate superior.
  3. Argus, signed the lease with TekUSA about leasing technology product, is the owners of the lease.
  4. Susan and Craig did not discover that the invoices were generated by TekUSA but Mr. Hayes’s name and address were in the receiver box.
  5. Craig overlooked the Notice of Assignment from TekUSA.

If they checked the invoices carefully or Craig did not ignore the notice, the result would be different.

TekUSA was an intermediate which caused the result:

  1. TekUSA transferred the rights to the lease payments and the equipment to Mr. Hayes.
  2. After sending the notice of selling its interest in the leased equipment to a third party, TekUSA did not ask for certified mail with return receipt requested.
  3. TekUSA accepted the payments and negotiated the termination of a lease that it had assigned to Mr. Hayes.
  4. There is a possibility that TekUSA may have been aware of the mistake but still accept payments and negotiate the termination. This possibility is subtle.

If TekUSA contacted with Argus actively or caught the error in time, the results would not be so.

Mr. Hayes was the last key.

  1. Mr. Hayes should collect payment by month.
  2. After signing an agreement with TkeUSA, he should notify Argus immediately.

In additional, Mr. Hayes might be unreasonable in his demands for a settlement because the valid lease did not expire.

In this case, there is no doubt that Susan and Craig represents the party which is the key link and the most responsible Party. If they neither destroyed the notice of assignment and nor denied they had received it, they would have some economic loss. However, all of parties should bear some responsibilities to a certain extent. Therefore, if all three parties take a step back, there is still a great opportunity to develop a “win-win” solution.

On the other side, I would like to point consequentialist theories and deontological theories respectively to analyze this case.

From the consequentialist theories, when we try to define what is right or wrong, consequentialist theories pay attention on the results or consequences of the decision or action. The more we maximize benefits to society, the better we make the ethical decision. When we are discussing, we should consider the interests of society not just for the parties concerned and those close to the parties concerned.

Firstly, we can discuss whether it is good or not to deny, then get the result of admission. We may have to weigh the costs and benefits. We should not only just pay attention on the gain and loss of Susan and Craig but also balance the result what would be the consequences of denying.

As illustrated in the case, the cost of denying is that more employees of TekUSA would be lost jobs. There might be no problem between Argus and Mr. Hayes. Mr. Hays’s problem is with TekUSA. However, TekUSA was struggling with a serious slump in safes, and 300 employees had been forced to lay off, one fifth of the total number of workers. The rate of getting the money back from TekUSA without suing was minimal. If the prosecution was successful, the number of unemployed people will be larger. On the other side, the cost of denying might that if Mr. Hays’s company could not get money from TekUSA, Mr. Hays’s company would also be impacted.

One benefit of denying would be that Argus might be excluded from this incident and avoid the economic pressure on the compensation. Also, Craig and Susan can still dream to make Argus the leader in their market. But they would be lost their reputation in their profession when the notice incident is revealed. If Susan and Craig avoid the current situation, their judgments will be compromised and it can severely damage their professional reputation.

However, by the preceding analysis, Argus was the most direct factor leading to the outcome. Susan and Craig were direct participants. Therefore, In terms of social welfare is maximized, or the results from the leading cause, Susan and Craig should not deny.

From deontological theories, the decisions should comply with ethical principles or values such as honesty, loyalty and respect for people and property. Instead, some actions would be considered wrong even though the consequences of the actions were good. How do we decide what rule, right, or principle to follow? We can be guided by tradition or moral intuition. In this case, if Susan and Craig are honest people, they should not deny. If they are loyal to their own career and reputation, they could not lie. If they respect for people and property, they will not tolerate to impose the result they can not afford to others so that others would lose their jobs and property. The Golden Rule provides an important deontological guide: “Do unto others as you would have them do unto you.”

With the foregoing analysis and discussion, it would be a good business decision to not destroy the notice of assignment and not deny they had received it for Susan and Craig. In my opinion, business ethics is the foundation to guide business practices. Regardless of any difficulties, businessmen should hold a moral bottom line. If businessmen do not abide by ethics, business would cease to exist. Under the guidance of the moral, who can sure will Susan not gain a miracle of developing a win-win situation?

Question 2

I will develop a win-win solution, as much as possible to maximize the interests of all parties at the same time minimizing the harm. It is an unknown whether everyone would satisfy, but there is possibility of success. The conditions to achieve a win-win solution are as follows:

1) TekUSA agrees to repay the misdirected funds by reducing Argus’s monthly lease payments.

2) TekUSA and Argus both agrees to extend the deadline of the new lease which signed between Argus and TekUSA.

3) Mr. Hayes agrees to extend the repayment period.

4) Argus agrees to transfer the new leased equipment to Mr. Hayes unconditionally after the end of the new lease.

5) Mr. Hayes agrees to receive the new leased equipment.

6) Argus agrees with Argus own funds and a part of new lease payment to pay to Mr. Hayes by month.

7) Mr. Hayes agrees to take the money back by month.

The possibility of agreement might be reached as follows:

(1-1) TekUSA can not deny that they were seriously remiss in accepting the payments and negotiating the termination of a lease that it had assigned to Mr. Hayes.

(1-2) TekUSA is struggling with a serious slump in safes, and it had been forced to lay off a fifth of workers. TekUSA is now in financial crisis, there is no ability to repay the money.

(1-3) A part of funds of TekUSA comes from the profitable relationship with Argus. If Argus terminated cooperation and used the cost of terminating the new lease to offset the cost of terminating the old lease, there is no good to the status of TekUSA.

(1-4) TekUSA unreasonably destroyed the equipment which owned to Mr. Hayes.

(2-1) Mr. Hayes bears some responsibility by not detecting the missed payments and notifying Argus earlier.

(2-2) If Mr. Hayes would not make a concessions, he would be difficult to get the money. Because Argus would be reluctant to pay a second $380,000 and compensate for the equipment which destroyed by TekUSA. The dispute between Argus and TekUSA would last a long period and Mr. Hayes is likely to be involved in the dispute, which is not compatible with the interests of Mr. Hayes.

(3-1) Argus, and especially Craig, was at fault for overlooking the Notice of Assignment.

(3-2) It is really difficult to get the money back from TekUSA to return to Mr. Hayes.

Overall, three parties all should bear some loss because of their faults but to reach an agreement can minimize the loss.

Although Argus would be reduced monthly lease payments, it would still get profit from cooperating with TekUSA in a long period, which could alleviate the plight effectively. For Mr. Hayes, there is no better solution than reaching the negotiation in spite of recovery of funds. Argus got into trouble due to personal reason. Comparing with disputation, the loss of a little money is lucky.

It is easy to make a choice which alternative has greater risk. Susan has a reputation for resolving tough situation. Her usual strategy was to encourage all parties to cooperate in developing a win-win solution. If Susan works out a solution would put her reputation, and even her career, on the line. However, when Susan faced the responsibility she should not cower away. The courage should be owned by an enterprise manager. With own ability to solve problems, even failure will not regret it. On the contrary, if she destroyed the notice of assignment that may be safer for Susan, but comparing with the loss of business ethics, she would lose more. What could be greater risk than the loss of moral?

Question 3

In this case, Susan is facing an ethical dilemma.

As an employee, Susan has an obligation to follow orders and work for the best interests of the company. From this point of view, Susan should obey the order to destroy the notice of assignment and deny that she had ever seen it. Therefore, the problem will not involve Argus and Craig. However, Susan also has responsibility to give the right suggestions and recommendations to her superior. She could submit a win-win plan to help the superior make a proper decision.

Susan is not only an employee, but she is also an individual with her own sense of integrity and right conduct. If I were Susan,

Firstly, I would consider the problem from the angle of the company. Most companies are interested in being ethical in order to avoid a bad reputation. If I comply with my superior, I am unethical. Everybody knows that if you do not want others to know it, you’d better do not do it. Even if Craig said no one knows we have the document, and no one can prove that we ever got, there is also a risk. An unethical company is very difficult to do business with. Others can not trust us. The biggest challenge comes from the conflict between ethics and economy. When we own a moral, we can really believe that someone else may be moral. Company success depends on mutual trust and confidence in the ethics between it and its partner.

Secondly, I would consider the problem from the view at manager angle. Many managers care about ethics in their companies and about company’s image in society. However, they overlook their own ethical issues. A responsible manager struggle for stakeholders’ maximum profit at the same time the manager should also care about justice. In this case, if I cover the truth, it is unfair to TekUSA and Mr. Hayes. As a manager, to work for the best interests is not my whole responsibility. Also, my behavior is a reference to employees. I totally oppose that manager responsibility is only to maximize profits for shareholders.

Thirdly, I would consider the problem from the view at Craig’ subordinate angle. From a personal emotional, I thank Craig for hiring me as a senior project manager four year ago. During that time I worked on a wide variety of projects under his direction. Then he promoted me to this position eight months ago. I know of him very well. I have never known Craig to suggest anything unethical. I am aware of the seriousness of the situation. I attempt to persuade him. I want him to know that we have always tried to compete in a fair and just environment. If this time we do not cross the ethical line, we could be a part of it. He may believe that he can help our company out of adversity by denying. Actually, company is shameful due to his behavior. I do not believe that reaching objectives is what matters and how you get there is not that important. If that, even if we succeed, we had lost the moral. Moral business can give us reputation. A reputation for ethics is a silent partner in all business, which can bring us more business.

Finally, if Craig neither agreed with my plan nor accepted my advice, on this premise, I would sign an agreement with Craig, specifying that I would be not responsible for all consequences.

Case 2

Question 1

Is dumpster diving an ethical way of acquiring information from a competitor? If companies do not take precautions, such as shredding vital documents, why should they be protected from prying eyes? Would it make a difference if the dumpster were on private property or on a public street?

In this case, the cause of the incident was due to the competition between Procter & Gamble and Unilever. Industry competition is normal, especially in the highly competitive business of shampoo and other hair-care products. First, if an enterprise wants to win in a commercial war, it is important to acquire available information about competitors’ production. For example, advertising plans, launch dates, production figures, and pricing. And then make the appropriate plan which makes the products more competitive. P&G invested a lot of manpower and resources to gather information on competitors. However, due to mismanagement, the spying operation was out of control.

Dumpster divingthe term refers to any general, useful information that is found and taken from areas in which it is discarded. These areas include dumpsters, trash cans, curbside containers and the like, from which information can be obtained at no cost. Malicious or curious attackers may find manuals, password files, diskettes, sensitive documents, credit card numbers, receipts, or reports that have been thrown away. “Dumpster diving” incident is that one person, who represented P&G, took trade secrets from a trash bins at Unilever’s Chicago office.

P&G claims that dumpster diving is legal, but I think the behavior is equivalent to theft, which is absolutely immoral. P&G’ behavior is an unethical way of acquiring information from a competitor. Some people think that there is no moral issue of competition, competition, what kind of tricks can be used to achieve the purpose as long as obeying the law. In my opinion, enterprises should participate in competition, but competition needs a good code of ethics. An unethical competition deteriorates the enterprise’s survival and competitive environment.

I have to admit that Unilever did not take appropriate measures to protect its trade secrets. However, I still support Unilever. I will discuss why Unilever should be protected from prying eyes.

Firstly, let us be clear the meaning of prying. When someone pries, they try to find out about someone else’ private affairs, or look at someone else’ personal possessions, often secretly; used showing disapproval. I compare the activity that misappropriating the trade secret of competitor by secret ways to prying eyes. In this case, P&G is the prying eyes. It acquired the trade secrets of Unilever by unethical means. From this point of view, Unilever should be protected, even through, Unilever did not take precaution. Any confidential business information that constitutes a competitive advantage can be considered a trade secret. In general, a trade secret is not known to the public, can bring economic benefits to the company. The definition of trade secret would not be changed wherever Unilever stored it.

Secondly, I want to discuss about the degree of precautions. If I think that P&G did not precaution because of the thrown secret information existence in the trash bins, what if shredded secret information was spliced back? How to measure precautions? For example, if I were not at home and put my money in my room on the floor, which is my precaution compared with leaving the money out of the house. If John saw my money on the floor and took the money away, do not laws protect my rights? My right whether or not should be protected, which does not depend on where I put the money. In this case, it is same. Unilever should be protected from prying even if it threw the trade secret in their trash bins.

Generally, trash is treated as abandoned property and is freely accessible. Whether it makes a difference if the dumpster were on private property or on a public street?

The statue varies from state to state and country to country. Most of the laws depend on if it is located in the organization’s own dumpster. It would make a difference if the dumpster were on a public street. A public dumpster is a receptacle which serves as a place to discard waste materials. If P&G picked the trade secret of Unilever from a dumpster on a public street, Unilever would be no right to ask P&G to assume the responsibility for issues. However, the case is truly not about dumpster diving, rather the case is about competitive intelligence corporate espionage. Unilever’ strategic plans were attained by P&G. There is no different whether the dumpster was on private property or on a public street.

When it comes to dumpster diving, the old adage rings true: “One man’s trash is another man’s treasure.” Trade secret is not only the marrow of knowledge and wisdom but also an important part of corporate intangible assets. Protection of trade secrets is essential for enterprise survival and development.

Question 2

Although John Pepper acted courageously in notifying Unilever, was his action morally required? In view of the reaction from Unilever, did he act wisely?

John pepper, the chairman of Procter & Gamble acknowledged that competitive intelligence sleuths hired by P&G had obtained some important information by sorting through the trash bins at Unilever’ office. Unilever’ unexpected response to this notifying led to John pepper involve in a dilemmas. The important information referred to Unilever’ trade secret was about a product launch in February.

Broadly speaking, any confidential business information which provides an enterprise a competitive edge may be considered a trade secret. The unauthorized use of such information by persons other than the holder is regarded as an unfair practice and a violation of the trade secret. The subject matter of trade secrets is usually defined in broad terms and includes sales methods, distribution methods, consumer profiles, advertising strategies, lists of suppliers and clients, and manufacturing processes. If the rival accessed through immoral means and used the trade secrets, the competitive advantage would not exist. I think John pepper’ action was morally required. Even if the rival had not discovered yet, or would never discover, as a flagship enterprise in consumer-products industry, this conduct violated the company’s own code of ethics, at the same time it disturbed fair competition.

On the other hand, John pepper acted in notifying Unilever not only for moral reasons, he wanted to blow the whistle to spying operation. Just a few months, from the fall of 2000 to April 2001, the spying operation had spun out of control. The dumpster diving violated the P&G’ own code of ethics and its policies for competitive intelligence contractors. John pepper wanted to warn that Spy operation has reached the edge of a cliff, which needed to proceed with great caution. At the same time, it’s better to admit voluntarily to the public that the initiative was on P&G’ own side. If the truth was discovered by the rival or media in future, P&G would be positive.

John pepper was surely surprised by the reaction from Unilever. Because he not only contacted Unilever with full disclosure and a promise not to use any of the information gained, but also fired three executives overseeing the spying operation. John pepper hoped that the honest admission would reduce the impact of Unilever’s response to the incident. Unilever would will to negotiate to reduce the impact of incident to minimum level and control the damage to its public image.

However, Unilever had just begun to safeguard its rights. Unilever asked huge amount of economic compensation for its possible losses incurred from the unethical acquisition of information. In addition, Unilever proposed P&G to reassign key personnel who had read the information to other positions. What is more, agreeably to Unilever’ request, P&G should allow an independent third party to investigate P&G’ hair-care business for several years and to report to Unilever any situations in which improperly gained information might have been used.

From the perspective of Unilever, the resolution of this incident is also an opportunity to weaken the rival, whether from economy or reputation. So Unilever did not calm the situation, instead, Unilever put forward various demands, claiming that if the demands are not met, the company might sue in court.

In view of the reaction from Unilever, John pepper did not act wisely. In my opinion, John pepper did not fully consider the possibility of disclosure the “dumpster diving” incident in the fierce market competition. Instead, he got his hopes up Unilever. If John pepper internal resolved the matter, the result would not be so.

Question 3

Is Unilever owed any compensation? What harm has the company suffered for which they should be compensated? [Note: Compensation is due only for harm done. Compare this case to compensating the owner of an automobile in a crash]

Since P&G’s competitor intelligence obtained some critical documents related to Unilever’s strategies from dumpster diving, many analysts blamed Unilever for being negligent about protecting its confidential information. They pointed out that, by failing to safeguard its information, Unilever had put its market share, profits, and the entire business at risk. Analysts criticized Unilever for not taking even the basic steps to protect its information from rivals. Being a leading company in a highly competitive environment, Unilever should have at least taken routine precautionary measures such as using shredders to destroy its documents.

Should Unilever be compensated? The answer is “yes.”

The dispute between Unilever and P&G just likes a traffic accident. I compare Unilever to a bus; compare G&P to a truck simultaneously. Because the truck violated traffic regulations lead to collision with the bus. Motor vehicle accident claims are made when a person is involved in an accident and that the accident caused is due to the other party’s negligence. The owner of the bus was owed compensation for the loss in the crash. Because P&G has confessed its dumpster diving activity, there is reason for Unilever to protect its right for own intellectual property from plagiary and likely to be used by its rival. It is certain that in this commercial espionage, Unilever was the victim no matter it had responsibility to its own negligence. Therefore, Unilever is owned the compensation from P&G.

Many analysts pointed out that Unilever’s punishments were too unwarranted, exaggerated and heavy. After all, P&G voluntarily confessed the activities and asked for reconciliation. It seemed that P&G had done the right things what it could do. They also held that, in fact, P&G didn’t implement any activities to damage or destroy Unilever’s business planning, so there should be no need to compensate Unilever. However, the possession of strategic information on a rival company can be devastating to competition.  This knowledge can not only damage current plans, but also hinder plans for future operations. 

For example, Unilever had to pour huge manpower and material resources to rebuild a new business strategy. It might miss the right time to do the right thing, which could lead to a bad result. Or, a good idea proposed by the Unilever’s staff efforts could not be applied. On the other hand, P&G had known what Unilever was going to change, how could it evolve to meet the needs of their customers. So P&G could define its unique selling proposition and build a marketing strategy in dependence on the information they obtained from Unilever by unethical means. By doing this, P&G could effectively counter their strategies and sustain themselves in the market. It’s like going to war and give your adversary your war plans.

As the world’s largest manufacturers of commodity, Procter & Gamble and Unilever are fierce competitors in the consumer-products industry. They fight for every percentage point of the market share. For example, the U.S. laundry detergent market costs 60 billion dollars, if any company’s market share increased 1%, revenue would increase 60 million dollars. In such a high market competition, the importance of confidential information is self-evident. Commercial confidentiality plagiarism has a great impact on the development of the company. Unilever made the decision to ask P&G for financial compensation for its misappropriate to offset its potential loss in the market as well as the establishment of the third party investigators to monitor the following business activities of P&G’s. As mentioned above, Unilever’ claim should be accepted, which seems not too much.

Question 4

Should P&G accept a monitor? Could a monitor harm P&G in any way? [Note: a monitor would be bound by a confidentiality agreement.] Could a monitor really be effective? That is, could a monitor detect instances in which P&G had used misappropriated information?

From my point of view, P&G could have refused to accept a monitor, and it will be understandable if P&G do so.

As misappropriated information gained by P&G in this spy case was collected from dumpsters in Unilever. And dumpster diving is quite different from others forms of industrial espionage, though it is still a common form. Dumpster diving itself is usually legal, which is not specifically prohibited by law. Police (and possibly others) searches of dumpsters and like discards are also generally not violations; evidence seized in this way has been permitted in many criminal trials. So P&G did not violate U.S. law, which means it is no need for P&G to accept a monitor as a punishment.

On the other hand, Unilever should be responsible for being negligent about protecting its confidential information. Unilever should have at least taken routine precautionary measures such as using shredders to destroy its documents. By failing to safeguard its information, Unilever had put its market share, profits, and the entire business at risk.

However, from the perspective of P&G, it is better to accept a monitor to evaluator whether or not P&G uses any of the information it gained from the dumpster, which can help P&G to re-gain the respect and trust, as it did violate the company’s code of ethics. P&G has admitted that the rogue operators engaged in activities that “violated our strict business guidelines regarding our business policies”. So accepting a monitor is one way for P&G to show its support to fair market competition, and to control the damage to its public image.

Undeniably, a monitor could harm P&G in some ways. It is not convenient for a company to do anything under monitoring by a third-part auditor, even if it would be bound by a confidentiality agreement. Such monitoring would be an extremely rare, perhaps novel, intrusion in a private business for reasons other than criminality. According to the agreement, the third-part auditor would review the company’s (especially the hair care divisions’) plans for the next several years to make sure that P&G’s strategy was not shaped by Unilever’s plans. So P&G might also need to pour huge manpower and material resources to assist in the review. Beyond this, every time a new plan was made, for example, it would be first submit to the monitor (the third-part auditor) to review. And then it was allowed to perform by P&G. It might take the monitor a long time to review, if it was a very complex plan. And P&G might miss the right time to do the right thing, which could lead to a bad result. Or, a good idea proposed by the P&G’s staff themselves could not be applied, just as it happened to be the same as a certain idea on Unilever’s plan that P&G acquired, even if it was similar. As Warren Batts, an adjunct professor of strategic management at the University of Chicago Graduate School of Business, said ”Anything P&G does in the future Unilever will say, ‘By golly that was in our plan.’ If P&G turns over the plans, they can not refute it.” It made little sense for P&G to agree to such a monitor because it would be awkward and unworkable, and would have negatively impact on P&G.

In addition, the third party how to measure what should report to Unilever. Whether they can discriminate what information is involved in Unilever’ trade secret. If they can not grasp the scale and abuse the power, what is the difference from dumpster diving? No doubt, if this possibility became a reality that is a disaster for P&G.

Whether a monitor really be effective, and could it detect the instances in which P&G had used misappropriated information

Under the monitoring, P&G obviously could not used misappropriated information directly in some public marketing activities such as pricing, promotional strategies etc., but it had known how Unilever was changing, how could they evolve to meet the needs of their customers, So it could define its unique selling proposition and build a marketing strategy in dependence on the information they obtained from Unilever. By doing this, they could effectively counter their strategies and sustain themselves in the market.

In view of it, it would be difficult for the monitor to detect every instance in which P&G had used misappropriated information or determine the fact that P&G did used misappropriated information. So the effect of a monitor is limited, it did not really work out that way.

Question 5

Was Unilever overreaching, punishing P&G when its chairman had acted properly? Or is the idea of a monitor a creative solution to a difficult problem? [Note: the sole purpose of a monitor is to ensure that P&G does what Pepper promised, and the cost of the monitor would be inconsequential.]

In spring of 2001, John Pepper, then chairman of Procter & Gamble, discovered that members of P&G’s competitive analysis department engaged in corporate spying practices at its rival corporation, Unilever. The spying operation gathered about eighty documents detailing Unilever’s plans for its U. S. hair care business over the next three years, including information on its launch-plans, prices, and margins. This information came as a complete surprise to Pepper, who had not commissioned nor condoned this operation.

In recent decades, the competition between these two companies kept on increasing as both of them expanded to the major markets in the world. Being leading companies in a highly competitive environment, P&G and Unilever competed in almost every part of their operations such as new product development and launches, pricing and promotional strategies and entering new markets.

As can be seen, for both of them, competitive intelligence would play a very important role in toggling the rival’s leading position while sustaining its own position in the market. But with respect to competitive espionage, it is discouraged.

Competitive intelligence is an ethical and legal business practice, while competitive espionage which is illegal. “Everyone does competitive intelligence work, but we are shocked at the levels to which they (P&G) went” as Unilever Spokesperson said. P&G went too far.

Fortunately, in this spying case, Mr. Pepper, P&G’s chairman had acted properly. They voluntarily notified Unilever of the activities, and fired people directly involved in. It was believed that P&G could not have addressed this problem any better, and we could not expect P&G to do more.

However, it was also reported that P&G first did not return to Unilever the whole documents they obtained at the begging. That is, P&G admitted to spying, but did not reveal how much they had learned first. So Unilever had reasons to doubt the level of P&G’s cooperation, which partly caused a severer punishment on P&G. And to say that the corporate spying event should never be happened again is too early. The competition between P&G and Unilever exist all the time and will be increasing over time. And where there is competition, there is corporate spying.

In my opinion, the response of Unilever was intended to show a strong attitude towards competitive espionage. Then next time P&G or other rivals attempted to gather information about them, they would select an appropriate method.

As we all know, most of the competitive espionage cases which came to light were ended up with a huge amount of penalty. But corporate espionage still occurs from time to time. As the only way to punish, penalty obviously could not prevent the occurrence of corporate espionage.

What else could we do? Is there an effective way?

The choice of Unilever was placing P&G under monitoring to make sure that misappropriate information P&G acquired would not be used, in addition to demanding a payment of about $20 million. Such monitoring would be an extremely rare, perhaps novel, intrusion in a private business for reasons other than criminality. In this sense, the idea of a monitor is a creative solution to a difficult problem. The sole purpose of a monitor is to ensure that P&G do what Pepper promised, and the cost of the monitor would be inconsequential. It just made the one who is wrong to protect the victim’s interest actively.

In this spying case, P&G was also demanded to reassign some of their hair care managers and to put some restrictions on their marketing of their hair care lines, which might have influence on their original strategy. So the spying case not only did harm to Unilever but also affected P&G itself. However, as monitoring involves many factors, it is complicated to operate in real life, such as the selection of a monitor. Whether it worked or not is not so important. The more important is to show that competitive espionage activities should be punished more seriously in future. Companies which take an illegal way to gather information about competitors must be more responsible for their behavior. It helps to build a healthier and fairer competitive environment.

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