BULL STREET - The art of the Con

Corporate Espionage

After the Second World War ended, although there were severe skirmishes around the globe, the thinking had changed. It was no longer going to be the country that had the biggest army that controlled events; it would be the one with the most multi-nationals residing within its borders. We have gone from blackmail by brut strength to blackmail by sophistication and manufacturing prowess. Not that having a few hydrogen bombs in the old arsenal is not good insurance, but the game is no longer played that way.

Before World War II, there literally were no multi-nationals with the possible exception of a few in the oil business. However, it wasn’t long before all of the world’s major companies had some parts of their businesses that they wanted to keep secret from their competitors. All of them also wanted to know what the other guy was going to do next and soon, all the major companies in the world were in the espionage business. Some hired staffs to do their corporate espionage and were reasonably forthcoming about what they were doing and others hired private detective like people to go through their competitors garbage if necessary to get and edge. However, they are all either in the business of espionage or they are going out of business in the near future. The only thing that gives large companies any breathing room at all is by having intellectual property protection, patents, trademarks and copyrights, and that doesn’t help a lot. Countries such as India create regulations that actually help their pharmaceutical companies steal secrets from their competitors without any downside.

Knowing what your competition is going to do before they announce it is good business unless laws are broken and even then, this is a world of the survival of the fittest. American companies have a severe problem in the international arena, as they are not allowed to bribe anyone for their own gain. Bribery is considered a crime in this country and when the American business is up against its German competitor within the field of international commerce, their competition is playing is playing with a stacked deck. The playing field is far from level and not only are the foreign competitors allowed to spread bribe money all over the place, but if the payoff is made by the use of cash or whether it is accomplished by check, they are allowed to deduct the transaction as a business deduction. If the American company attempted to that, whoever paid the bribe would probably be out of job by morning and in the hoosegow the next day.

The Japanese Keritsus and the Korean Chaibols functioned almost as military units sending spies all over the world to garner the necessary corporate information in order effectively to compete. These folks became capable of reverse engineering the most complex products in days. Moreover, in Japan’s formative years they had about as much respect for patents as Jack the Ripper had for his victims. In the days when their products were considered shoddy and America was where high grade goods were produced, the Japanese went as far as creating a city called USA. Thus, they were able to stamp, USA on their goods and shipped them to ports all over the world making buyers think they came from somewhere else. Even in recent times, Japan has often found intellectual property rights, something for the other guy to believe in. They have to some degree treated them as a matter of convenience.

However, in the neighborhood that Japan lives in, they are the only reasonably honest citizen. China, Hong Kong and Thailand are of the belief that the restraints put on by following the rules are matters for the other guy. Recent admission by China into the World Trade organization will probably create a little restraint but not much. Particularly hard hit by the lack of serious regulation in intellectual property of the fields of movies, music and software where the stuff is copied as a matter of course and the phony editions are sold in local stores, hot of the press.

However, another problem with the big guys is that they don’t seem to think that the regulations are for them and in this country that can sometimes be a problem. The next story is about the same as the ant and the elephant. Texaco took on a company that was a fraction of their size, thought that they were going to be able to do whatever they wanted and found out very differently.



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