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The secret to protecting trade secrets: How to create positive secrecy climates in organizations

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  • Robertson, Kirsten M.
  • Hannah, David R.
  • Lautsch, Brenda A.

Abstract

Many companies derive their competitive advantage from the use and protection of trade secrets. This means that if these companies’ trade secrets are misappropriated, it can be extremely costly and even jeopardize their survival. In order to try to prevent employees from inappropriately divulging trade secrets, companies will often implement rules and procedures such as non-disclosure agreements that limit what employees are allowed to do with trade secrets. In spite of the prevalence of these procedures, billions of dollars in trade secrets are leaked and stolen every year, most often by companies’ own employees. We argue that a key to the effective protection of trade secrets lies in the creation of positive secrecy climates, wherein keeping organizational secrets is strongly valued by employees and seen as a part of their formal role responsibilities. We explain how managers can develop positive secrecy climates in their organizations, and outline the risks and potential rewards of these climates.

Suggested Citation

  • Robertson, Kirsten M. & Hannah, David R. & Lautsch, Brenda A., 2015. "The secret to protecting trade secrets: How to create positive secrecy climates in organizations," Business Horizons, Elsevier, vol. 58(6), pages 669-677.
    • Handle: RePEc:eee:bushor:v:58:y:2015:i:6:p:669-677
    DOI: 10.1016/j.bushor.2015.07.004
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    References listed on IDEAS

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    1. Narda R. Quigley & Paul E. Tesluk & Edwin A. Locke & Kathryn M. Bartol, 2007. "A Multilevel Investigation of the Motivational Mechanisms Underlying Knowledge Sharing and Performance," Organization Science, INFORMS, vol. 18(1), pages 71-88, February.
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    4. Hannah, David & Parent, Michael & Pitt, Leyland & Berthon, Pierre, 2014. "It's a secret: Marketing value and the denial of availability," Business Horizons, Elsevier, vol. 57(1), pages 49-59.
    5. David R. Hannah, 2005. "Should I Keep a Secret? The Effects of Trade Secret Protection Procedures on Employees' Obligations to Protect Trade Secrets," Organization Science, INFORMS, vol. 16(1), pages 71-84, February.
    6. David R. Hannah & Kirsten Robertson, 2015. "Why and How Do Employees Break and Bend Confidential Information Protection Rules?," Journal of Management Studies, Wiley Blackwell, vol. 52(3), pages 381-413, May.
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    Cited by:

    1. Hannah, David R. & Fu, Felicity Yao & Parent, Michael, 2022. "CARD tricks: Understanding magical processes in organizations," Business Horizons, Elsevier, vol. 65(6), pages 751-763.
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    3. Langlois, Jonathan & BenMahmoud-Jouini, Sihem & Servajean-Hilst, Romaric, 2023. "Practicing secrecy in open innovation – The case of a military firm," Research Policy, Elsevier, vol. 52(1).
    4. Fedorenko, Ivan & Berthon, Pierre & Edelman, Linda, 2023. "Top secret: Integrating 20 years of research on secrecy," Technovation, Elsevier, vol. 123(C).

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