Gemar Estrella, MBA 2

BA 939 Strategic Management

Assignment No. 1 (60 points)

1. What are some of the legal and ethical issues involved in collecting competitor
intelligence in the following situations? (30 points)
a. Hotel A sends an employee posing as a potential client to Hotel B to find out who
Hotel B’s major corporate customers are.
b. A firm hires an MBA student to collect information directly from a competitor
while claiming the information is for a course project.
c. A firm advertises a nonexistent position and interviews a rival’s employees with the
intention of obtaining competitor information.

ANSWER:

A. Hotel A sends an employee posing as a potential client to Hotel B to find out

who Hotel B’s major corporate customers are.

There are a number of legal issues that must be considered in the context of
collecting competitor intelligence. First, there is the potential for deception. Hotel
A sends an employee posing as a potential client to Hotel B to find out who Hotel
B’s major corporate customers are. Hotel A could be trying to collect information
about rival businesses, which would be illegal if it was done in order to compete
with those businesses.

Second, there is the issue of privacy. Hotel A may not be able to obtain
information about competitors without their consent. If they were allowed to do
so without obtaining consent, they could potentially embarrass them or violate
their privacy rights.

Third, there is the issue of intellectual property protection: it may be illegal for
Hotel A to use any information obtained from its competitor in order to compete
with them directly.

B. A firm hires an MBA student to collect information directly from a competitor

while claiming the information is for a course project.

This is a clear case of fraud, and could lead to criminal charges against the firm
and/or the student. The student would be acting as an agent of the company,
which means they are acting on behalf of their employer, who is also acting on
behalf of its competition. For example, if the student were to take notes on
 competitors' strategies and then share them with the firm's management team,
that would be an act of espionage for which both parties could be charged with
violating anti-trust laws.

The student could also be charged with theft if he or she did not have permission
from his or her professor to collect this information without a signed contract
from the firm allowing him or her access to company records or data—this would
be illegal theft under law.

However, if it were found that there was no intention of sharing this information
with anyone else besides his or her professor (and even then it may not be
ethical), there would likely not be any legal consequences for what was done.

C. A firm advertises a nonexistent position and interviews a rival’s employees with

the intention of obtaining competitor information.

This is an unethical practice, because it violates the firm’s duty to not

misrepresent its employment opportunities. In addition, it may also violate anti-
discrimination laws in some jurisdictions. In this situation, the firm is violating
federal law by engaging in unfair or deceptive practices. The law generally
prohibits employment agencies from advertising positions that are not open to all
applicants, as well as from using individuals or companies who have no
relationship with the agency to fill out applications or provide information to such
ads. Furthermore, if an interviewer produces false information in their interview
with the firm, they may be charged with wire fraud.

2. What are some of the ethical implications that arise when a firm tries to exploit its
power over a supplier? (10 points)

ANSWER: In the context of supply chain management, there are a number of ethical
implications that can arise when a firm tries to exploit its power over a supplier.

First, moral issues related to exploitation often center around the failure to
compensate the supplier fairly. For example, if a firm tries to exploit its power by
paying less money than what it would otherwise pay for goods or services, it may be
exploiting the supplier financially. Similarly, if a firm takes advantage of an out-of-
date product and then fails to replace it when it becomes obsolete, this could also be
considered exploitative behavior by the firm. In these cases, consumers will not
receive products or services they need at fair prices—and they may even suffer
financial losses due to the reduced quality of their purchases.

Second, moral issues related to exploitation often center around interpersonal

relationships between suppliers and buyers. This relationship is one where both
 parties have unequal power—the buyer has more control over what happens with
his/her product or service than does the supplier (who must rely on other buyers for
sales). In many instances where there is unequal power between two parties in an
exchange transaction (such as when one party is financially stronger), an exploitative
relationship can develop between them.

3. What are some of the ethical issues that arise when a firm becomes overly zealous
in advertising its products? (10 points)

ANSWER: The ethical issues that arise when a firm becomes overly zealous in
advertising its products are that it can be seen as deceptive, which is illegal. It can
also lead to people being misled and therefore not getting what they want. The firm
would have to take a stand against this kind of behavior and inform their customers
about what they're doing. A major ethical issue is when a firm is willing to pay people
to write positive reviews of their product. This can lead to a situation where
companies are able to only publish positive reviews, and if there are negative ones,
they are not published at all. This creates an imbalance between the number of
positive reviews vs. negative ones that can result in unfair competition and a lack of
transparency for consumers.

Companies should also consider whether they have an obligation to share

information about customers who have been harmed by their products. For example,
if one person develops skin cancer because they used a certain sunscreen product
and shared their experience with other users online—would the company be
required by law to disclose this information?

4. How might exemplary human resource practices enhance and strengthen a firm’s
value-chain activities? (10 points)

ANSWER: People are the core of any organization, and the quality of their work, in
addition to their education and training, is what gives a company its competitive
edge. A firm's value-chain activities—the processes that involve the creation, sale,
and maintenance of a product or service—depend on the employees who perform
them.
The first thing that exemplary human resource practices can do is enhance and
strengthen a firm’s value-chain activities.

First, they can help to ensure that the people in a firm are competent. This is
important because if you have competent people, then they will be able to do their
jobs well, which means they will be able to produce more goods or services at lower
cost than if you had incompetent people.
Second, exemplary human resource practices can help to reduce costs by reducing
turnover rates and increasing productivity. In this way, they also help to ensure that
the firm has a high rate of return on its investments in new equipment or software
because it doesn't need to replace so many of its employees as often as it would
otherwise have done.

Finally, exemplary human resource practices can help improve morale by providing
an environment where people feel valued and respected by their coworkers and
leaders alike.