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Professional Responsibility and Leadership: A Case of the Pizza Plot

With the intensification of global competition, finding out about the products and processes of rival firms has transformed into a big business. According to Ferrell and Fraedrich, (2015), competitive gathering of intelligence is increasingly viewed as a significant and largely tolerable nature of market research. Unfortunately, in their bid to accomplish their competitive intelligence gathering goals, certain companies and individuals are resorting to practices that amount to industrial espionage (Ferrell & Fraedrich, 2015). Professionals and organizational leaders are willing to engage in unethical or illegitimate practices provided they gather competitive intelligence from their rivals. The case of the Pizza plot involving Schwan’s, Kraft, and Barry, the go-to guy, offers a perfect example of an act of industrial espionage. Schwan’s was convinced that the appropriate strategy that could enable it to effectively counter its principal rival, Kraft, was to learn about the capacity of production of Kraft’s plant in Sussex. The competitive intelligence that Schwan’s needed concerned the type of equipment housed by the plant, amount of production lines, sizes and types of pizzas produced at the plant, and quantity of pies coming off the plant’s assembly line every day. Schwan’s needed this information quickly and was compelled to assign the task to a consultant. The consultant was convinced that getting this information would call for the engagement in subterfuge, and proceeded to subcontract the duty to Bary, who acted as the consultant’s “kite” (The New York Times Magazine, 2018). To accomplish this goal, Bary resorted to acts of espionage.  In relation to this, the paper champions the argument that the actions embraced by Schwan’s, Bary, and the consultant amounted to industrial espionage owing to the tactics employed in securing the information, nature of information gathered, and negative purpose for which the information was gathered. The paper concludes by presenting the author’s opinion for an alternative ethical mechanism that could be employed by Schwan’s or the consultant to gather the intelligence.

Schwan’s, the consultant, and Bary embraced questionable tactics in securing information for the consultant, as they went beyond what might be considered ethical, acceptable, or legitimate business practice. According to Crane (2003), examples of questionable tactics employed in gathering information are searching via rivals’ rubbish, infiltrating rival organizations with industrial spies, hiring private detectives, and contacting rivals in fake guise like a potential supplier or customer. Schwan’s hiring of private detectives and infiltration of rival firm with industrial spies is evident in the hiring of a consultant, who was a member of the Society of Competitive Intelligence Professionals, to collect intelligence from the key rival firm, Kraft (The New York Times Magazine, 2018). The consultant proceeded to hire Bary for the task. Bary was compelled to employ questionable techniques such as disguising himself as a reporter, environmentalist, employee, customer, and student in order to acquire information from key information needed by Schwan’s (The New York Times Magazine, 2018). The tactics embraced by Schwan’s, Bary, and the consultant were of dubious ethicality, as they breach a duty to be truthful and honest in business dealings. These parties were aware that Kraft could not provide the information they needed to rivals, as it could jeopardize the company’s position or competitiveness in the market. As such, they chose to embrace illegitimate means of acquiring such intelligence.   

The nature of information that Schwan’s, Bary, and the consultant sought from Kraft was confidential or private. Confidential information involves any form of information which the firm feels should not be easily available to external parties and which should be some form of legal or moral protection. Opponents may claim that it is more difficult to ascertain a firm’s right to confidentiality than it is an individual’s, as companies have limited boundaries to describe the confidential corporate space relative to private individuals. Antagonists can also claim that firms deal with and consist of multiple individuals, which in turn complicate the regulation of information. Nevertheless, even though it seems difficult to completely ascribe a right to confidentiality upon firms, it is admissible to suggest that some information possessed by companies amounts to property and is bound by property rights (Crane, 2003). Examples of such information are trademarks, copyrights, patents, and trade secrets. All these forms of information are to certain extent legally enforceable intellectual property belonging to the corporation. Crane (2003) adds that intellectual property rights are applicable to several intangible properties including processing techniques, designs, recipes, formulae, music, software, inventions, theories, and product formulations among others.

Bary, Schwan’s and the consultant were seeking Kraft’s information related to production capacity. They wanted to know about the nature of equipment housed by Kraft’s plant quantity of production line, sizes and forms of pizzas produced, and amount of pies generated from the assembly line. It is clear that this information was related to Kraft’s trade secrets, designs, product techniques, recipes, and product formulations all of which are covered under intellectual property rights. Crane (2003) argues that the establishment of private information often involves firms in investments in research and development amounting to millions in terms of costs. Moreover, corporations always proceed to great lengths and allocate substantial resources in attempting to safeguard this information their rivals in order to benefit from their investments (Crane, 2003). As such, by seeking this information from Kraft without the firm’s knowledge, Schwan’s, the consultant, and Bary were liable for industrial espionage considering that this information could be employed negatively against Kraft.   

Information sought by Bary was to be employed against the public interest, and both the consultant and Bary were informed about this intention. Ferrell and Fraedrich (2015) assert that in situations in which information sought is to be used against the interest of the public, any undertaking to acquire such information is considered espionage or unethical. Ferrell and Fraedrich (2015) add that using information against public interest can involve a company gathering information about a rival or rivals and employing such information in advancing anticompetitive behavior including blatant ruin or removal of competitors. Schwan’s motive for seeking information about Kraft’s production capacity was to have a competitive edge over Kraft in terms of market competition.

Market failures often result in certain ethical dilemmas for firms and consumers (Ferrell & Fraedrich, 2015). The inability of Schwan’s to beat its rival, Kraft, subjected it to an ethical dilemma between maintaining corporate social responsibility and satisfying financial interest. In such a situation, proponents of the egoistic approach could argue that Kraft was justified to embrace a decision that produced the greatest level of good for the company. Nonetheless, it is undeniable that Schwan’s, Bary, and the consultant would not wish the same action to be done to them.  Therefore, the three parties can be criticized from the deontological perspective, which holds that a party should do unto other parties what such a party would have others do unto it. Kant’s categorical imperative maintains that actions are only embraceable if a party is ready to permit the maxim or rule underlying the act to be globalized or universalized for all (Ferrell & Fraedrich, 2015). Thus, this test poses challenges for some forms of intelligence gathering such as the one adopted by Schwan’s because once they are embraced into business practice all companies are always adversely impacted. For example, the industry may experience surfeit of trust and company may be compelled to incur enormous costs to safeguard their private information. 

Schwan’s, Bary, and the consultant could have employed the duty and consequentialist frameworks in address the ethical dilemma they faced. The duty framework focuses on the obligations and duties that parties possess in a certain situation and consider the ethical obligations that individuals have and things shy should never perform (Ferrell & Fraedrich, 2015). As a company, Schwan’s had an ethical obligation to act in an ethically sound manner towards the society, which in this case included its rival, Kraft. By embracing the consequentialist framework, these parties could have focused on the future impacts of the actions they made by considering the individuals who could have been affected directly or indirectly.  

In my view, I believe that Schwan’s and Bary could have embraced several options to address the situation. For example, by focusing on the utilitarian approach, Schwan’s could have focused on an act that could have offered the most good. The most good could have been realized by not subjecting Bary and the consultant to a situation that demeans their integrity and not acquiring private information from Kraft without its consent. If I were Bary I could have embraced the common good approach in addressing the situation. Welsey (1872) emphasizes this approach by stating that individuals should embrace the notion of gaining all they can without harming their neighbors. For example, I could have resorted to acquiring information about Kraft from authorized bodies such as Statista. In this manner, I could have provided the information needed by Schwan’s and the consultant, and, at the same time, not contravened Kraft’s intellectual property rights.

I also believe that ethical leadership concerns compassion, openness, honesty, trust, and respect. Virtues related with leadership should be enacted through deeds and words. As such, leaders should embrace alternative forms of making ethical judgments when confronted with situations that contravene their personal and professional values. Embracing codes of conduct and professional standards enables leaders and individual to act in ethically sound ways when confronted by ethical dilemmas. For example, being a member of the Society of Competitive Intelligence Professionals (SCIP), the consultant was aware that the SCIP’s code of conduct prohibited deception or misrepresentation when interviewing a target on a client’s behalf (The New York Times Magazine, 2018). Nonetheless, the consultant proceeded to act contrary to the requirements of the professional code of conduct. Such an unprofessional approach to addressing issues subjected him to the involvement in industrial espionage. When confronted with the same situation, I could have also employed the 4v model in making an ethically sound judgment. The 4v model focuses on the aspects of values, vision, voice, and virtues (Steenkamp, 2014). By applying this model to the situation, I could have discovered my own core value and share them with others such as Bary and Schwan’s.

In conclusion, it can be argued that Schwan’s Bary, and the consultant were involved in industrial espionage, as they employed dubious tactics in securing information from Kraft, sought private information from Kraft without the organization’s consent, and aimed to use the information against Kraft. Embracing the virtue, duty, and consequentialist frameworks along with the ethical approaches such as the utilitarian approach, the common-good approach, and rights approach could have enabled these parties to address the dilemma they faced in an ethical manner. If I were caught in the same situation, I could have focused on these ethical frameworks and approaches.