no. 1-0095
The Ethics of Competitive Intelligence
P&G’s Bad Hair Day
In spring of 2001, John Pepper, then chairman of Procter and Gamble, discovered that
members of P&G’s competitive analysis department engaged in corporate spying
practices at its rival corporation, Unilever.1 The spying operation gathered about eighty
documents detailing Unilever’s plans for its U. S. hair care business over the next three
years, including information on its launch-plans, prices, and margins.2, 3 This information
came as a complete surprise to Pepper, who had not commissioned nor condoned this
operation.
How exactly did P&G gain this information? First, managers at the company hired an
outside firm to undertake the operation. These corporate spies allegedly operated out of a
safe house, known as, “The Ranch,” which was located in Cincinnati, the same city as
P&G’s headquarters.4 The spies participated in “dumpster diving” operations, or as some
in the industry called it, “rubbish archeology.” This included rummaging through
dumpsters on Unilever’s property in search of unshredded documents containing key
strategic plans. Dumpster diving was not thought to be a common practice in mainstream
corporate America. Prior to this incident, corporate intelligence experts purported that
searching for competitive secrets in a rival’s trash was an anomaly. When questioned
about the prevalence of such a practice, Alden Taylor, head of corporate intelligence at
Kroll Associates Inc. responded, “This is the sort of thing that gives legitimate business
intelligence a bad name. What we do is much closer to specialized management
consulting than it is donning Neoprene suits and diving into dumpsters.”5 And Donald
Greenwood, a Houston security consultant confirmed this sentiment by stating that
upstanding companies would rarely engage in such questionable behaviors. Neither
individual knew about P&G’s exploits when they made these comments. Obviously not
all corporate...