How the Rules Change the Game :  A Study on the Effect of China’s Institutional Framework on the Collection of Competitive Intelligence

Abstract:

The competitive intelligence (CI) process has previously been extensively investigated; however its relation to the internal environment of the firm dictates most of the existing research. The relationship between CI and the external environment has been researched to some extent, concluding on the importance of adapting CI practices to ‘the rules of the game’, i.e. the institutional framework of the market from which one aims to collect information. This adaptation is stated to be especially important in emerging economies since they differ vastly from developed economies in this matter. Multiple authors suggest the relationship between a market’s institutional framework and the collection of CI as the base for strategic decision-making. Nevertheless, to the researchers’ knowledge, no research has previously set out to mainly investigate this relationship further, to gain more understanding about the effect of the institutional framework on the collection of information, in order to provide empirical support on how to adapt CI practices in a sufficient manner. In relation to this, China has been given attention due to its complex institutional framework. However, previous research have not focused on the complications and problems that Western CI professionals could face when adapting their CI practices to collect information from China due to lack of knowledge and understanding of the market’s ‘rules of the game’.

Hence, this study set out to address this research gap by investigating and explaining how the institutional framework of China affects the collection of information and for CI professionals from developed economies. This is done by researching the effect that the institutional framework has on the quality of information sources, from the perspective of Western CI professionals. This includes investigating the effect that the institutional framework of China has on the quality of HUMINT and OSINT information sources, and researching how the quality of HUMINT and OSINT information sources affects the usage of these sources for Western CI professionals. With this gained understanding, Western CI professionals will be able to determine how to adapt the way in which they collect CI from HUMINT and OSINT information sources in China. Also, CI professionals may use the results of this study to reconfigure their current approach of collecting information from China.

This research was conducted through a qualitative case study of five Western CI professionals that have experience of collecting information in China. The empirical data for the purpose of this study to form the base for the analysis was collected through semi-structured interviews.

The interview questions were grouped under the concepts of information sources, the quality measurements ‘intrinsicality’, ‘representability’ and ‘accessibility’, formal institutions and informal institutions. The data was analyzed and compared to conclude on the concepts relationship to each other as an explanation for how the ‘rules’, the institutional framework of China, affect the ‘game’, the collection of CI. The researchers conclude that the most important implication of how the institutional framework of China affects the collection of CI, from a Western CI professionals’ point of view, is the required emphasis on building and maintaining relationships to access high quality information and the utilization of a wide number and variety of HUMINT and OSINT sources to verify the information collected.