Non-Disclosure Agreeement (NDA)

Edited by Sam Mishra

Unless you are a business like the HP Printer Division which touts (as per a fairly recent keynote by its division head Vyomesh Joshi) that its arrangements with Japanese manufacturers don't even have a formal written contract, you are better off, for multiple reasons, to get that NDA or Non-Disclosure Agreement signed by various stakeholders.
Two examples follow to illustrate why  companies  like  to get NDA's signed by  all possible  stake-holders. Since we live in the Internet age of Web 2.0 at the time of this writing (June 2009), the example of blogs (or web logs) is used to illustrate the importance of NDAs as an important business tool.

Example 1: The Second Internet Boom (also known as Web 2.0)

The advent of blog sites and other web 2.0 technologies on the Internet requires businesses to be even more stringent in terms of enforcing NDAs (non-disclosure agreements) signed by various stake-holders: third-party contractors, employees, and even board-members in case of fledgling start-ups. Why? These stakeholders can easily leverage the information and pass it on to competitors.

Example 2: Product Strategy to Create Cool Products

Let us take the hypothetical case of a great product company, which prides itself as the most innovative product firm in the world. Part of its product and business strategy is to routinely surprise the markets with new products, and  it succeeds in keeping the competitors guessing what it will roll out next. However, it has some employees who are so proud / happy / delighted / ecstatic to be working on these cutting edge products that they go and blurt out the cool products they are working on, on some blog site. What happens to their employer? If the employees keep doing this, eventually the employer erodes its competitive advantage in terms of cool product creation. So what does the employer do? It changes its employment contract and enforces NDAs with its employees; and any employee who violates the NDA by spitting out information in advance is fired.