Rise in Corporate Crime: Corporate Espionage & Security Measures - Research Paper

Introduction

There has been a rise in the number of crimes committed in the corporate world. Such crimes have led to organizations to put up measures that will enhance security from both internal and external threats. Examples of crimes that exist in the corporate world that has seen organizations as well as individual greatly affected include corporate espionage. The term espionage is mostly related to international spies involving individuals that gather information from a foreign country to benefit their own country. From the corporate point of view, espionage involves gathering information so that the organization in question can have some commercial or financial advantage over the other (Fruhlinger, 2018). Corporate espionage can be viewed as being advantageous as well as costly. The key benefit of corporate espionage includes competition creation, which benefits consumers. The costly part of corporate espionage is that companies may suffer significant losses (Kozlovskaya, 2015). Corporate espionage offenders can be either insiders or outsiders both who may have some similarities as well as differences.

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The two main similarities between insider and outsider offenders of corporate espionage are that both involve obtaining the company's sensitive information as well as financial gain. Whether it is espionage that occurs internally or externally, trade secrets are the main target. Trade secrets from the opposing company enable an organization to have an overview of their different operational aspects, such as competitive advantage such and critical performance indicators. Such information can be duplicated or used to find alternatives. Corporate espionage is also conducted mainly for financial gain. Organizations wishing to acquire data from others are motivated by earning huge profits over other companies in the same industry (Business.com, 2017). Besides the similarities, there are also some differences between the two types of offenders.

Insider corporate espionage offenders include individuals who are contracted from inside the target organization to collect vital information. From the insider perspectives, espionage may occur from both authorized as well as unauthorized individuals in the same firm. Close to 21% of insider corporate espionage offenders perform the act by hacking into the company's system (Red Team Cyber Security, 2014). By having an unauthorized entry into the system, vital information can be stolen from such organizations.

In contrast to insider corporate espionage offenders, external corporate espionage offenders are hired by other firms to spy on companies. The act may involve different organizations within the same industry or an individual hired from a different country who spies on local companies. A good example is China, which is famously known for contracting individuals to spy on US companies (Schober, 2015). At the same time, US firms are also known to spy on Chinese companies.

The effects of corporate espionage from the two types of offenders differ. Insider espionage usually affects the corporates image and to some extent, external individuals such as consumers. Such as effect is realized from cases such as the insider trading that occurred at Enron. Being part of insider corporate espionage, Jefferey Skilling was involved in insider trading that saw 21,000 employees lose their jobs and savings. Skilling committed the crime while making $ 89 million in profits in the process (Malbanatwala1, 2015). On the other hand, the effects of corporate espionage from an outsider may lead to consequences such as trade wars. An example is the trade wars that are currently between the United States and China. The result of the trade wars has seen restrictions being put on companies from either country. As one of the measures to counter against corporate espionage US firms such as Google and Microsoft have disassociated themselves from Huawei, which is a Chinese multinational (Newcomb, 2019). The action results from the effects of outsider corporate espionage.

References

Business.com. (2017). Hacking comes from both insiders and outsiders. Business.com. Retrieved from https://www.business.com/articles/cybersecurity-inside-outside-threats/

Fruhlinger, J. (2018). What is corporate espionage? Inside the murky world of private spying. CSO. Retrieved from https://www.csoonline.com/article/3285726/what-is-corporate-espionage-inside-the-murky-world-of-private-spying.html

Kozlovskaya, M. (2015). Industrial espionage: Good or bad for the economy? University of Leicester. Retrieved from https://www2.le.ac.uk/institution/fpgr/archive-of-past-festivals/2015/meet/2015/posters/maria-kozlovskaya

Malbanatwala1. (2015, December 8). Corporate crime: Insider trading and trade secret theft through cyber espionage [Video file]. Retrieved from https://www.youtube.com/watch?v=YlfnvLFkeFg

Newcomb, A. (2019). Huawei wants to play nice with Google and Microsoft but has its 'Last Resort' ready. Fortune. Retrieved from http://fortune.com/2019/05/25/huawei-google-Microsoft/

Red Team Cyber Security. (2014, November 2). Corporate espionage 101. Insider threats- watch your employees carefully [Video file]. Retrieved from https://www.youtube.com/watch?v=TFgwvPVLkG0

Schober, S. (2015, August 3). What are the tools of corporate espionage? Cybersecurity expert Scott Schober on Arise TV Xchange [Video file]. Retrieved from https://www.youtube.com/watch?v=8b9fYVG1FuY