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The art of war in the business world

    The birth of RAIDING, or corporate raiding, is attributed to the period of disintegration of the Soviet Union, more specifically to the period of Russian privatisation of public companies in the late 1990s and early 2000s, under the name of «Reiderstvo». The aim was to gain control or power over companies or to eliminate them from the market by using all kinds of mechanisms, legal, illegal or illegal.

    However, on the other side of the Atlantic in the early 1980s, a businessman, Asher Edelman, was giving lessons in corporate raiding using the teachings of Sun Tzu’s «The Art of War», albeit within the law, but possibly by blurring the boundaries of business ethics.

    The development of cyber technologies has boosted this type of activity in recent years, mainly for the following reasons:

    1. The possibility of attacking the target company from a distance, using even third countries where the legal framework is not yet in force. The police and judiciary are less strict with this type of measures, and police and judicial cooperation is more difficult to follow up on these activities.
    2. The use of technologies that manage to mask the identity of the attacker. This facilitates the creation of structures to serve these purposes, which are extremely profitable and efficient, and in many cases criminal.
    3. The lack of knowledge on the part of the victim companies of the real dimension of the risk to which they are subjected.
    4. The existence of a VUCA (Volatility, Uncertainty, Completeness, Ambiguity) scenario in the business world, in line with the world order.
    5. The globalisation of the economy, which multiplies the number of competing companies in the most remote places and logically strengthens their voracity and the instinct for survival. It should be borne in mind that raiding is not only limited to the use of technological or cybernetic mechanisms; the attacker or rider also relies on traditional business competition mechanisms, such as the hiring of key executives of the target company, price wars or the breach of essential agreements, and on the other hand, the use of ethically probable techniques such as defamatory campaigns or the spurious use of legal action to hinder the natural dynamics of the company. It is difficult to establish a numerus clausus of the mechanisms employed, and the raider‘s imagination is always on the alert for improvement and refinement. The raider uses criteria and methods based on war intelligence, which is why the defence against them must be based on global defensive intelligence criteria.

    The company’s defence must have a global, holistic vision. We need to secure the risk perimeters of: members of staff, managers, employees, customers, suppliers and also the company’s tangible or intangible assets. Sometimes the raider‘s best strategy will be an indirect attack, i.e. not focused on the company but on its environment. Unfortunately, a company may disappear as a result of raiding and the entrepreneur may think that it was due to bad luck or business misfortune.

    In order to be able to assume this defence role with guarantees, the company must have a minimum structure, made up of the compliance body, a specialist in intelligence and risk prospecting and a lawyer specialising in security and intelligence areas, the latter two of whom may form part of the company’s internal team or alternatively be external professionals. In any case, the steps to follow are:

    • Carry out a security audit of the company and related entities. To indicate existing vulnerabilities.
    • Establish a map of potential risks.
    • Predictive monitoring with intelligence criteria, based on own and sectoral alerts.

    Establishment of an internal and external action plan after the attack. What is clear, in my opinion, is that meeting the challenges of future business development requires companies to be aware of the real risks that exist and to have the intelligence tools to mitigate their effects. To paraphrase Sun Tzu, we could say that the entrepreneur who acts in isolation, who lacks strategy and who takes his adversaries lightly, will inevitably end up being defeated. Faced with the VUCA scenario ahead of us, the entrepreneur should read or reread Sun Tzu’s «The Art of War«

    José Riba Vidal
    Managing Partner of RibaVidal Abogados

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