Three Quadrant Models of Organisational Culture

Just been looking at Whittington’s (“What is Strategy and does it Matter?”) four Generic Strategies and comparing them with Mary Douglas’s Grid-Group Cultural Theory (see Thompson’s “Organising and Disorganising”) and Cameron and Quinn’s Competing Values Framework (CVF) (“Diagnosing and Changing organisational Culture”).

It is interesting that all three approaches use a quadrant to describe what is, in effect in all three cases, institutional (or organisational) culture. However, there is nothing analogous to Grid-Group Cultural Theory’s (GGCT) Fatalism in the other two models. One way of looking at this comparison might be to say that GGCT is more psychological, that is better able to explain the thought style of an individual subject than the other two.

If we want to understand these models by comparing them, the best way is to focus on the axes rather than the quadrants. Thus:
– GGCT – individual/group – authority/community
– Generic Strategies – deliberate/emergent – profit-maximising/plural objectives
– CVF – internal focus/external focus – flexibility/stability

I think that it is useful to look at these models from a structuralist viewpoint since each one embodies a different pair of binaries. In fact, if we use the Levi-Strauss approach to cultural analysis, we might say that each one embodies a different set of myths about institutions.

But, let us be eclectic. There does seem to be some similarity between individual/group and profit-maximising/plural objectives and internal focus/external focus because they are all concerned with competitiveness versus co-operation, in some way. But the parallels seem a little forced. We could mix and match. For example, suppose you were to construct a grid with one axis individual/ group and the other flexibility/stability. But does this make a meaningful quadrant? Perhaps it might in the context of a specific organisation with a specific type of problem. But, why do some pairs of binaries seem to have more general explanatory power than others?

I suspect that the question, “What is different and what is similar in these three models?” might yield some interesting answers.

The Role of Authoritative Texts in Business Research

Over the past ten years a particular paradigm has become entrenched in the way that research in business schools has been conceived. This consists of the principle that empirical research is the key to all understanding; that knowledge acquisition is a cumulative enterprise where researchers move the frontiers forward one step at a time; that each research paper that is published takes into account the papers that have been published about that subject previously and therefore each new paper stands on the shoulders of its predecessors. Each paper has near the beginning of it a theory section where the researcher states what theoretical principles are being invoked for application in this study.

All of this begs a number of questions. The ones I want to draw attention to here are:

  • How can we be sure that all of the researchers really are looking at the same object of study?
  • How can we be sure that that with each of the small steps that is made by each researcher that the whole enterprise is moving forwards and not just going round in a circles?
  • Why, if the theory is a good one, should it not be explored at length and then used for a variety of studies?

Of course, lurking inside this research paradigm is the assumption that positivism is, if not the actual embodiment of truth, at least the nearest that we can come to it. (Positivism is a way of thinking in the social sciences that sees social phenomena as having independent existence and being amenable to the same kind of study as objects in the physical sciences).

In the physical sciences there is a fixed object of study which is the same for all researchers, like a sub-atomic particle or an extinct species and so on. Each researcher can take an aspect of the object and add to it. For example, one researcher may be interested in whether or not an extinct species of dinosaur had feathers; another might look at the geographical conditions in which it lived; another might be interested in its posture and so on. All of them would be adding, or attempting to add, to our knowledge of the object. However, social phenomena are not so straight forward. Whether a riot is an instance of collective insanity or a political protest might very well be a matter of opinion and there may be, however well argued the cases for different perspectives may be, no one “correct” view.

If the object of study is subject to ambiguity like this then it follows that different researchers will have different points of view and that one contribution may not take the discussion forwards in a straight line from the previous one but might take it in a different direction, or be completely unrelated. Researchers are required by the paradigm, embodied in the peer reviewers and journal editors, to cite other articles in support of their statements. This concern for citation has reached fever pitch and gone beyond its original, rational purpose. The effect is a tendency to make all researchers take part in one paradigmatic view of the object of study or, at the least, a small number of views. In a situation where originality and clarity of thinking ought to be virtues, they are labelled as vices and the overall view of the object of study becomes increasingly muddy.

The role of theory in business research might puzzle an outsider to this arcane practice. The theory section of a research paper is usually much smaller than the section devoted to the empirical research. There is rarely very much depth to it and it is very unusual for it to reach the level of abstraction where philosophy could be brought in to illuminate the matter. This bias towards the concrete evidence at the expense of the intellectual framework that is being used to comprehend it is surely a mistake.

One of the most worrying developments of this approach to research is that authoritative texts from other fields such as sociology or philosophy that are invoked are treated in the same way as the objects of study. Researchers are expected to cite other researchers in support of statements about what an authoritative text says. This is like privileging what the friends, enemies and acquaintances of a person say that his opinions are over and above what he says that his opinions are. It is not a reasonable way of approaching the matter.

There is a misunderstanding here and it is a misunderstanding of the nature of a text. Here is a book; it has size and weight like any other object. But, we are not interested in the book as a physical object but as a text and the text only ceases to be a collection of black marks on white paper when it is read. In other words, it is the reading of the text that is significant and the text is not a static object but a performance. Of course no two performances will be identical even if it is the same text and the same reader but at different times, or if it is the same text by different readers at the same time. For example, readers read with different purposes. A reader might read Foucault’s “Discipline and Punish” because he is interested in Foucault, another because she is interested in the penal system; another because he is interested in Foucault’s ideas about power while another might just enjoy the horrors of the early chapters. Any of these motives could be the basis of a different reading.

If researchers are expected to cite each other instead of reading an authoritative text afresh, the possibility of original thinking about anything occasioned by the text is banished. And, let us clear up a common misconception, a reading cannot be anything that happens to be in the reader’s head when he or she is reading the text. A reading must be justified at every point by reference to the text and only to another text if there is justification that can be shown. Textual analysis is an exacting discipline, just as exacting as empirical scientific analysis but it follows different rules – rules that are appropriate to the object of study.

If business researchers were to add the skill of reading, of textual analysis, to their repertoire of methodologies, the subject would be much richer and the possibilities of usefully innovative thinking would be vastly increased.

[For a discussion of the multiplicity of possible readings of a text see: Stanley Fish, “Is There a Text in this Class? – the Authority of Interpretative Communities”, Harvard UP, 1980]

Case Study: Services Marketing

This is a scenario for use in teaching services marketing.

Chain Hotels is a chain of 43 mid-market hotels in the UK. They are popular with business travellers who comprise 85% of customers. Locations are edge of town, motorway and A-road services and town centres. They are all company operated. Restaurants are basic with a limited menu which does not vary. All have business centre facilities, meeting rooms, wi-fi etc. Room décor is one of four standard decors. Any one property may use any or all of the four for their rooms but only these four are available for the whole chain.

Despite being a largely successful business, the hotels tend to have high staff turnover and suffer from a persistent failure to live up to service standards. There is also a problem with low occupancy at weekends.

Chain Hotels has recently acquired another smaller chain called Croft Hotels – 20 properties. All the hotels in the Croft chain are owner operated. They have a variety of locations: seaside resorts, provincial town centres and in the countryside. They generally maintain a very high standard of service and this was the main concern of the founder of the chain, though there are no properly defined service standards. The restaurants vary from property to property but are mostly high quality. Market research in the past has shown that Croft has a small but remarkably loyal following. Owners are committed to the brand and its values of high customer service. Staff turnover is low. However, profits are also low. Nowadays the chain lacks a definite brand image. There are no chain wide promotions. None of the Croft hotels has business centre facilities and most offer no wi-fi. Room décor is the decision of the managers of the particular property.

The CEO of Chain Hotels has recently been replaced and the new CEO is worried about the acquisition of Croft. She wants to take a fresh look at the situation and has called in your team of independent consultants to advise.

Your preliminary investigations reveal:

• Croft Hotels do not know the profile of their customers. They are probably a mixture of business travellers, private travellers and tourists but it is not known in what proportions.

• Croft hotels all have very high quality toiletries and cafetieres in all rooms.

• The Croft web site has not been updated for 5 years. It does allow bookings but the site is generally difficult to use.

• In the Croft chain it is the seaside properties that perform the best in terms of occupancy and profit.

• Chain Hotels have tried offering leisure break promotions to fill rooms during slack periods but have had no success.

The CEO of Chain asks you to consider these questions and report back to the board:

1. What should the brand architecture be? Should they be integrated into one brand or kept as two distinct ones. If kept distinct, should it be made apparent that Croft is under the Chain umbrella?

2. What can Croft learn from Chain? What can Chain learn from Croft? How would you recommend that knowledge transfer could be brought about?

3. Using the services marketing mix, in broad outline recommend a marketing strategy for the company.

4. The CEO is worried about the issue of charging for wi-fi. What would you recommend?

Why Does Business Need Post-Structuralism?

Business is a very practical activity requiring concrete solutions to concrete problems. Post-structuralism, on the other hand, belongs in the realm of pure thought. It is all about philosophy and point of view. Much of the business literature (eg. the books of Tom Peters) perpetuates the view that in business it is action that is important and that talk and thought are just things that you should spend as little time on as possible before you act.

I would like to briefly examines some of the assumptions implicit in this way of thinking and show that post-structuralism does have something of value to offer business.

The paradigm which is chiefly used in business schools is that of positivism; that is a paradigm which assumes that the social sciences should use the same procedures, ways of thinking and methods as the natural sciences. When a researcher has a question to answer he will gather evidence, examine it objectively and draw conclusions. This approach is perceived to be the one that will be of most use to business. This is the method that business follows, or would follow if it had the time; so the recieved wisdom goes. The emphasis here is on rationality, objectivity, measurability and reasoning from evidence. This is a view of the world that is based on the scientific method and one which banishes magic, confusion and arbitrary imposition of a point of view.

I think that there are two problems here. Firstly, business organisations as groups of people are shaped by political forces and rational argument based on evidence is only one of the tools that might be implemented. In my experience, in business being right is no guarantee of winning an argument. Secondly, there is a deeper problem: the problem of the validity of positivism itself.

The positivist approach seems at first sight to inspire a lot of confidence. It is objective and based on evidence which is, as far as possible, measurable. What it tends to gloss over are matters such as how the question was framed in the first place; why this question and not another one; who is qualified to gather and interpret the evidence and what counts as evidence. I am not arguing that positivism has no value, far from it. I think that positivism has a great deal of value in so far as it suggests a methodology but its use as a research paradigm should always be tempered by an understanding of its limitations.

The analogy of Newtonian and Einsteinian physics illustrates the point. If you want to do some research into the workings of an internal combustion engine, Newtonian physics will give you the right way of thinking and the right methodology. However, if you want to study the universe at large, or what goes on at a sub-atomic level, you would have to use an Einsteinian approach. Similarly, if you want to know how a business can best allocate the resources that it has right now, a positivist approach would be just the right thing whereas if you want to know how to fundamentally change an organisation’s culture, you are likely to find that a post-structuralist approach gives you a better set of tools.

Inside real businesses power, who has it and how it is used, is far more significant than objective truths, even where they actually exist. Also, the prevailing business culture lays down that action is more important than talk or thought – discussion or strategy. In this situation it is essential to understand power, which post structuralism is good at to make a convincing case for discussion and strategy so as to avoid costly blunders.

Post structuralism puts language at the centre of its approach. According to this paradigm organisation culture is created through language. Meaning and truth are not universal as they are in positivism but are relative to the position of the particular member of the organisation. Since social phenomena like organisations were created through language they can be understood and changed through language. Post structuralism has a lot to say about power and how it operates through discourse.

Whereas positivism treats social phenomena in the same way as the natural sciences treat physical phenomena, it is at a loss to explain the mechanisms by which they were created in the first place. Positivism studies what has happened but has a problem with studying change. Positivism assumes that there is one, correct, point of view which is accessible to everyone and cannot explain differing points of view except in terms of error.

Of course, post structuralism would be an overly complex way to look at operational business problems, a positivist approach is entirely appropriate to such local issues. However, if you want to tackle higher level strategy or fundamental organisational change, post structuralism gives you subtle and sophisticated tools.

Knowledge Cafes with David Gurteen

On Tuesday, 13th December, I attended a workshop run by David Gurteen of Gurteen Knowledge on the subject of Implementing Knowledge Cafes. I have attended public cafes in London organised by David Gurteen and I have always found them to be immensely stimulating so I was keen to find out how I could organise an event like this myself.

David describes how he came to formulate his knowledge cafes. He says that at one time he was involved with seminars that consisted of a ‘death by PowerPoint’ presentation followed by questions. Often the speaker would speak for too long so there was no time left for questions. After the seminar everyone would go the pub and just talk. David noticed that the best part – most enjoyable, most productive – of the event was the discussion in the pub and he wondered how he could make a whole event as good as that. He used the American ‘World Café’ as a model and adapted it.

The knowledge café has very little structure. It is an event that usually takes about 2 hours or so where 20 to 30 people meet to have conversations with each other. It begins with a keynote speaker talking about a topic. The delegates sit in groups of 4 or 5 people round a circular table or in in a circle of chairs. The speaker is briefed to speak for five minutes and is allowed fifteen at the very most. Usually the speaker introduces a question which he may do by, for example, telling a story about a problem he or she has encountered. When the speaker has finished the delegates discuss the question in their groups. After about 20 minutes, the organiser asks some people to move to another group and the discussion continues with people bringing to their new group ideas from their previous group then after another 20 minutes the groups change again. When the third group discussion is brought to an end the furniture is rearranged by the delegates so that everyone sits in one big circle. The discussion then continues until time runs out.

One of the features of the café is that the emphasis is very much on the discussion between the people taking part. Delegates can make their own notes if they wish but nothing is formally captured. You can get a good idea of how the café works by looking at the slideshow on the Gurteen web site. The groups do not have any formal reporting back which tends to give a platform for dominant personalities. However, there is no output in the form of report backs or flip charts to take away because the point of the café is the generative power of the dialogue itself: the output is in the heads of the participants.

The philosophy of the café is that new knowledge is created by dialogue about existing knowledge. This insight is a profound one because the effectiveness of the café often surprises delegates who have not attended one before. In many work situations this creative dialogue is impeded. Firstly, it is impeded by the fact that often people work in functional silos or because of accidents of geography or office layout they just don’t meet the people who they could benefit from talking to. Secondly, it is impeded by the fact that most conversation in the work place is task orientated so there is not enough time for conversation that might lead to innovation. As David puts it, “… I would put communication first as connecting people, improved communication and better conversations ultimately leads to effective decision making and innovation”.

David tells how at the beginning he thought of the café as just a better way of doing a seminar presentation, as a way to share thoughts and information. Then, one day, he went to organise a café for the employees of an organisation. He quickly discovered that the café conversations were bringing to the surface all kinds of problems and suggestions about how the organisation was running. Managers from the organisation asked that the discussion be temporarily halted so that it could all be captured for more in-depth discussion and consideration after the café and David realised that the café was an even more powerful tool than he had previously thought.

I had only ever seen the café in action as a public event. In some ways, this is the purest form of the café because the delegates are self-selecting and from a variety of different organisations. This situation means that conversation is uninhibited by the constraints of organisational culture and hierarchy. The main thing that I took away with me from the workshop was ways in which the café format could be adapted to use within an organisation. For example, capturing ideas usually gets in the way of the dialogue but sometimes it is valuable to have some sort of formal capture.

In line with the philosophy that in the cafe ‘the knowledge is already in the room’ and that ’knowing more is not as good as the group understanding what it knows’ during the course of the workshop some useful points emerged which were contributed by the delegates. One point was that organisational hierarchies get in the way of creative conversation which must be sociable to be at its most effective. Another was that stories may be used to break through taboos and that breaking these taboos could be very fruitful indeed. A delegate described how he had used stories about corruption in general to address issues of corruption in organisations he was dealing with. If he had broached the subject head-on, he would have met with a brick wall but by getting delegates to discuss stories of corruption in general he found that they became more comfortable about relating these stories to what was happening within their own organisation.

There was some discussion about whether conversation needs to be face-to-face or whether it could be at a distance perhaps using social media. The consensus was that it would depend to some extent on the culture of the participants, some people taking to social media more readily than others, but that face-to-face conversation is preferable.

Following on from this topic, David talked about ‘flip-teaching’ and ‘flip conferences’. The thinking behind these concepts is that people do not learn well from sitting in rows in lecture theatres or seminar rooms listening to speakers. But, they do learn well from group activities and dialogue with others. In flip-teaching the students watch a video on You Tube at home before the class then the class time is spent in group activities based on the information in the video and group discussion, for example, how to apply the knowledge in the video to a specific problem. Similarly, in the case of a flip-conference, delegates would watch videos of keynote speeches on You Tube before going to the conference then spending their time at the conference discussing what they had heard. Surely, this has to be the right approach, especially for conferences. I wonder if any conference will be done in any other way in twenty years’ time.

Some books were recommended by delegates and these included:

  • Levine/Locke/Searls/Weinberger/Newmark/McKee, The ClueTrain Manifesto – the way to look at marketing in the age of the internet
  • Lynda Gratton, Hot Spots: Why Some Companies Buzz with Energy and Innovation – and Others Don’t

I have read the summary information on Amazon and I shall be reading them both as soon as a have some free time.

The day was a very worthwhile event. I now feel confident that I could organise knowledge cafes myself. It was also great to meet the other delegates, talk with them and learn from them.

One of the things that struck me about the day’s workshop was that although there was a wide spread of ages and of professional backgrounds all the delegates were the same type of person. Some were from academia, some from the public sector, some were self-employed consultants, some from large corporations and some from the voluntary sector. Yet all the people attending were intelligent, articulate, analytical yet people orientated, pro-active and concerned to make things better. They are the sort of people who you would want to come to your organisation as consultants because they would make a connection with your people quickly and be genuinely interested in understanding your organisation’s culture. Similarly, as employees they are the kind of people who are the most valuable employees, the glue of an organisation, because they will always expect the best of themselves and encourage and enable the best from their colleagues. In other words, the people who voluntarily attend knowledge cafes are just the ones who least need to and the world needs them to take the café idea out to the people who really need it – which is what this workshop was all about.

The Three States of Money

At the core of most stories in the news media that have to do with politics is the issue of money. There is debate about its generation, it’s expenditure, how much should be raised in taxes, how much executives should be allowed to earn, how much pension people should expect in retirement and so on. There is an assumption among journalists that everyone understands the basics, after all, we all have a few coins in our pockets don’t we? But, of course, many consumers of news feel that they do not understand much of what they are being told and skip over the economics stories until they find something which has more readily accessible content. Journalists see their role as being disseminators of information but, in the main, they make very poor teachers.

 The trouble is that money is a strange substance though it is with us all the time. It is a bit like water. When water is cold, water it is a solid. Normally, we experience it as a liquid. And when it is very hot, it turns to steam and becomes gaseous. I would like to suggest that just as water has three states which vary according to its temperature and pressure, it is helpful to think of money as having three states which vary according to its quantity and use.

For want of more elegant terminology, let us call small amounts of money ‘Money 1’, middling amounts of money ‘Money 2’ and large amounts of money ‘Money 3’. Economists have the terms ‘micro economics’ and ‘macro economics’ and in this suggested classification ‘micro economics’ roughly corresponds to Money 1 and Money 2 whereas ‘macro economics’ corresponds to Money 3. I suggest that the three states of money model paints a clearer picture.

Money 1 is the money that individuals and families spend on an everyday basis. It falls within the limits of their income. It is the money that is used for daily expenses such as food, travel, mortgage payments and so on. The wisest approach to managing Money 1 is not to allow expenditure to exceed income. If it does, there is an extra cost which reduces spending power in the longer term. The time horizons of Money 1 are short and the amounts are small. The emphasis is on income, directly or indirectly arising from labour. Risk is to be kept to an absolute minimum and, if possible, eliminated altogether.

Money 2 covers a range from amounts required to buy domestic properties and small businesses up to amounts turned over by large commercial organisations and may run into billions of dollars. The keynote of this state of money is investment: it is money used to make money.

The aim of a purchaser of a domestic property in taking out a mortgage loan, in preference to renting accommodation, is to pay it off so that housing ceases to be such a significant cost and to acquire an asset which stores value and, perhaps, increases in value. For a business, Money 2 is an input which is used to invest in means of production which, in due course, generates wages and dividends – Money 1 – paid to employees and shareholders. Without Money 2 there would be no Money 1. Money 2 is money for investing.

Money 3 is money in such large quantities that its use affects the nature of reality. It is money spent by government. It cannot be seen as investment in the same sense as Money 2. In Money 2, for example, two commercial organisations engaged in similar activities could decide to invest similar amounts of money in different ways. Shareholders or commentators can then compare the effects over a period of time and make a judgement on which organisation made the wisest choice. This cannot be with Money 3. By applying Money 3 the nature of the whole situation is altered. For example, there was a time when the British Government was faced with a choice of building a tunnel under the Channel or building a bridge over it. Once the tunnel was built the nature of the situation had been altered so there could only be a theoretical comparison made. Governments cannot own money; they can only direct its flow from taxes into expenditure. Money 3 is money for spending.

The essence of Money 1 is ownership, the nature of Money 2 is investment and the nature of Money 3 is expenditure.

The fundamental structure of our society (capitalist) is tripartite. The terminology varies from writer to writer. We could, for example, use Hegel’s terminology from the ‘Philosophy of Right’: ‘Family, Civil Society and Government’. In this schema ‘Family’ is the realm of the private where people know each other and are mutually dependent. ‘Civil Society’ is where people meet as strangers, for example, to take part in market activities. It is the realm of business. ‘Government’ is where the common interests of all individuals and groups come together and its function, which may be achieved with varying degrees of success, is the maintenance of the common good and its realm is that of justice. We could make a parallel here and say, roughly, that Money 1 is the money of Family, Money 2 is the money of Civil Society and Money 3 is the money of Government.

I suggest that this idea of the three states of money is a simple model and easy to grasp. For example, politicians over recent months have frequently used the analogy that the British economy is like ‘a credit card that has been maxed out’. Now a credit card is Money 1 and the British economy is Money 3. They are fundamentally different so the analogy is obfuscatory and confusing.

I would also like to suggest that the model is helpful for understanding other issues. For example, social class or whether or not experience in business is useful for a politician.

Let us take social class. Everyone is familiar with Money 1. It is not possible to be a fully functioning adult and not have a thorough grasp of Money 1. It’s laws are simple: don’t borrow unless you must; save for a ‘rainy day’; if you want to spend more, you must earn more. However, the degree to which a person is middle class depends on their grasp of Money 2. If you see all expenditure as just expenditure you cannot grasp the concept of investment. Middle class people think in terms of making investments: in buying houses, businesses, investing in education and training. Thus, they are able, to some extent, to escape the cycle of income and expenditure which working class people are trapped in. Class is a state of mind and it is, essentially, a state of mind about money.

In order to understand how the world works and make good decisions about our lives, how to vote and how to plan for the long term, it is essential that people should come to understand much more about economics than they do. An understanding of the three states of money would be a good starting place.

Security as a Barrier to Knowledge Creation

As the sharing of information has become more sophisticated the ways in which information can leak have become more subtle and insidious. Unguarded moments of committing thoughts to social networking sites have caused embarrassment to many and so has accidentally putting the wrong name in an email address field. On another level, the actions of hackers and serious cyber criminals have become an everyday hazard. We have a culture of paranoia where security is seen to be an intrinsically good thing and yet this is not always so.

Organisations have always been anxious about their secrets. As a business lecturer I have often come across resistance when it comes to work based assignments, for example. I have had students who have been told that they cannot say anything at all about their work because they might release sensitive information of use to competitors. In my experience, the employer has always relented when they have realised that this kind of information will not make it into the student’s assignment. Nevertheless, it demonstrates a general anxiety that organisations have about confidentiality.

The thinking goes like this. We have a process which goes from x to y to z. This process is the basis of our profits and if anyone were to copy it, they would be able to steal market share. Of course, this line of reasoning is full of misconceptions and half-truths. It is as misconceived as to think that the window cleaner looking in at the office window would then be in a position to steal the business.

I suggest that information that organisations consider to be confidential falls into three categories. Let me illustrate with the example of a manufacturer of widgets. The first type of information is information like the details of the manufacturing process. The widgets are manufactured using a well-established process that has been used for more than a decade. There are a number of companies in the same geographical area which have from time to time lost employees to each other. Though you could not find a description of the process on the internet, you could say that the process is part of a community of practice (Wenger 1998) which is not the property of any one company. This is the sort of information that companies try to keep secret but fail in due course.

The second type of information is information about a new development. Let us say that our company has discovered that they can manufacture the widgets to higher tolerances by carrying out part of the process in refrigerated conditions. This will give them a competitive advantage and the other companies would be able to copy it if they found out. The news will get out because of informal networks in the industry and because personnel will move from one company to another over a period of time. This kind of advantage can only ever be temporary and, probably, short-lived.

The third type of information is very specific to the business. It would include things like the bid price on a tender and is unequivocally useful to a competitor in a way that would almost certainly damage the business. This kind of information is usually kept confidential even within the company and only revealed on a need-to-know basis.

Bearing in mind these three types of confidential information let us compare them with the junior employee of the company who attends college on day release to learn some general principles that will make him or her more useful as an employee. No one feels uncomfortable because of that kind of information. All the present and potential future employers would say that this kind of knowledge transfer is a good thing. And yet, where is the boundary between that and the first kind of confidential information that I have described? And where is the boundary between the first kind and the second kind? Are the first two categories of information that companies commonly see as confidential properly confidential at all?

The manufacturers of widgets might give consideration to the basis on which they compete. Since it is not the details of the process which differentiates them, perhaps they would be better off to collaborate on research and development. If the whole industry could become more efficient, all the competing companies would be in a better position to resist competition from substitutes. While each company barricades itself in a bunker of confidentiality it may be damaging its future competitiveness.