Reference no: EM131531892

Question: A company manufactures a commonly used household material and is part of a privately owned, and somewhat secretive, international organisation with headquarters overseas. Like its competitors, there is a considerable amount of technological innovation taking place at this time (the late 1980s) with computer-controlled machinery being introduced to improve both quality and productivity. However, the market is fiercely competitive and it is unlikely that all current rivals will survive. The group which owns the company also owns the leading equipment manufacturer in this sector, a fact which is not widely known. This latter firm works with many of the company's rivals in the UK and overseas in developing new systems and maintaining them during use.

All the competitors in effect gain from this arrangement as successful machinery is made more widely available. However, there is a suspicion that the equipment manufacturer passes on information to the company about its rivals' investment plans, manufacturing performance and financial health. Company management argue that, whatever rules governments may wish to enforce to preserve fair competition, sensitive and valuable information will inevitably flow between organisations by all sorts of mechanisms. Following this line of thought, the best thing the company can do is to become good at playing this game, though without resorting to grosser forms of illegality such as theft and blackmail!