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Licensing Proprietary Information to Foreign Competitors

Licensing proprietary technology to foreign competitors is the best way to give up a firm's competitive advantage. Discuss whether you agree or disagree with this statement.

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I would disagree with that statement for various reasons. Proprietary information can be divided in many ways to ensure that the company holding the license does not lose its competitive edge if part of the information goes to a foreign competitor.

When an organization creates a license, it ensures the license has what it is willing to share and what portion of its technology it will withhold. The invention, for example, can be written such that it may not be dissected through reverse engineering. Organizations such as Microstrain for example create patents so that foreign competitors are limited with what they can do and hence become dependent on the organization.
An organization can also license limited portion (selective licensing) or basics of their technology. The enhancements or ...

Solution Summary

In today's global market, sharing information has become a strategy that each organization uses to ensure they keep an upper hand in getting business and increasing revenues. Licenses are also written in such a way that the organization is still able to compete in the market, but also understands its competition.