Flagship Research Quarterly of the Indian School of Business (ISB). Find out more

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Past Issue • Jan-Mar 2016

To Reveal or Not to Reveal: Secrecy in Supply Chain Management

Given uncertain market conditions, electronic firms that outsource production to suppliers face a trade-off between revealing too much about their quantity decisions to competitors, thereby losing profits to well-informed second movers, and revealing too little, thus failing to signal quantity commitments. In full disclosure (FD) and non-disclosure (ND) scenarios, the relative informedness of the second mover and the supplier’s incentive to keep information confidential play a large role in the effectiveness and profitability of information concealment.

Steve Jobs announced the new iPhone at the MacWorld convention on January 9, 2007. However, it was only released months later on June 29, 2007. By the time the product was launched, Nokia and LG (KE850) had come up with their own prototypes, which had features eerily similar to the iPhone. A company known to keep its secrets close to its heart had revealed its product launch months in advance to huge media attention, thus exposing its product as well as its manufacturing component details to its competitors, such as Nokia and LG. Why was this a risk?

ABOUT THE AUTHORS

  • Milind-G-Sohoni

    Milind G. Sohoni

    Associate Professor of Operations Management and Senior Associate Dean, Faculty Alignment and Registrar Office at the Indian School of Business (ISB).
  • Aditya-Jain-Author

    Aditya Jain

    Assistant Professor at Zicklin School of Business, Baruch College, The City University of New York.
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