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Corporate secrets and their impact on business activities. Case studies.



Kirjoittanut: Mikhail Filippov - tiimistä Sointu.

Esseen tyyppi: Yksilöessee / 2 esseepistettä.
Esseen arvioitu lukuaika on 3 minuuttia.

What do you think matters the most in our modern society? Social status, inherited from a respectable family? A luxury house in Seychelles? An expensive and rare sports car? No! In 21st century for society, which is connected to and influenced with countless amounts of social networks, information became the most valuable and desired asset, and the competition for the right to own some kind of exclusive knowledge has grown immensely. And it is not only applicable to daily news, but to confidential information of big corporations or businesses too. Over the time, these corporations or businesses have a lot of those secrets saved and stored, and when it somehow gets public, it can reveal a very shocking and disturbing information, or it can confirm certain theories and whispers. Depending on the way the power of these secrets is used, however, different results might be achieved. Let’s review what

 

A marketing opportunity.

 

We love secrets and myths, but for the company, it can be an opportunity to promote to us their new product or service. In some cases, it can even be used as a promotion of already existing product. Take, for example, KFC with its 11 spices. Announcement of the contents of it almost led to legal action against a couple, who found the recipe on a paper by chance (ABC News, 2001), but afterwards, it was leaked by a Sander’s nephew itself (Lu, 2023). And despite it becoming publicly available in that way, company still insists on the secrecy in its restaurants.

 

Another example will be a Coca Cola with its original recipe, which is claimed to be shelved away in the vault. It, however, it has been believed to be only a marketing trick, more than a real corporate secret (Mikkelson, 1999).

 

Downfall and reputational harm

Even though some companies may actively speculate on their commercial secrets as we’ve seen from the examples above, most of the time, however, disclosure of such confidential information causes massive public reaction, with the possibility of devastating financial loss or even sanctions being applied to them.

One of the examples of such harm took place in 2019, when a dispute between a electric car manufacturer Tesla, and an self-driving startup Zoox, when four employees of Zoox, who were previously employees of Tesla, were accused of stealing confidential information related to a Tesla’s software program, used to oversee the manufacturing, warehousing, inventory, distribution, and transportation of its products.(O’kane, 2020) This led to a claim against those four employees, and was settled with an obligation of Zoox to compensate Tesla with unidentified amount of money.

Another leak of corporate secret at a time has not significantly hurt the company, however, it affected the final product quite much. The case is a Valve’s Beta Half Life 2 leak. In 2003, a breach of Valve’s internal servers happened, and a lot of internal materials were compromised, including the unfinished build of the game, which later were leaked to the Internet, causing not only financial loss, but also demotivation of the development team (Parkin, 2016). Luckily for players and for the company, the game’s release was not harmed, and it was a well-received game, but it is said (and technically proven) that it underwent significant changes making it very different from the original, leaked concept.

 

Conclusion

 

In my opinion, corporate secrets are a very tricky type of information. Some of them are relatively innocent and are used as a bait in marketing and promotion by company, but they, most likely, may own a mythical status, but most of the time, public disclosure of any of them causes resonance, and damages to the company. The importance of some leaks, however, is different, as it may disclose severe offences of law, or shocking and disturbing information, for example social issues, like overwork of employees at the companies, usage of child labor, poisoning etc. Companies definitely spend many resources to protect these informational assets, but nonetheless, I, and many others may predict, that with the further development of the Internet, the amount of the secrets revealed will only grow, and the companies should be ready for that.

 

REFERENCES:

 

  1. ABC News, 2001. KFC Drops Suit Over Original Recipe (https://abcnews.go.com/US/story?id=94260&page=1)
  2. Lu, G., 2023. The Top Secret KFC Recipe for fried chicken was once leaked. Boss Hunting. (https://www.bosshunting.com.au/lifestyle/eat/kfc-recipe-leaked/)
  3. Mikkelson, B. 1999. Coca-Cola’s Secret Formula. Snopes.(https://www.snopes.com/fact-check/coca-cola-fomula/)
  4. O’Kane, S. 2020. Former Tesla employees brought stolen documents to self-driving startup Zoox. Zoox “regrets the actions of those employees”. The Verge. (https://www.theverge.com/2020/4/15/21222763/tesla-zoox-startup-lawsuit-settlement-autonomous-driving)
  5. Parkin, S., 2016. Catching up with the guy who stole Half-Life 2’s source code, 10 years later. ARS Technica. (https://arstechnica.com/gaming/2016/06/what-drove-one-half-life-2-super-fan-to-hack-into-valves-servers/)
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