by Alexander Gordon
Modern age companies, unlike the traditional firms, are spending colossal amount of resources in two key areas i.e. a) undertaking research and b) training manpower. These resources contribute to firm’s hard earned intellectual property pool. Another key distinction among the firms of then and now is the growing decentralization wherein firms are no longer trying to stay in a cocoon and avoid any outsiders. This era is marked by growth through expansion and external investment. However any such growth or transition not only implies external investment but also is indicative of involvement of more players, of which many could not be trustworthy. But to succeed it is imperative to open out. Than what is the way out to prevent miss-use of such information spread among associates, colleagues and employees?
Enables Spread of Information in the Desired Form: A nondisclosure agreement with the information sharers proves to be a handy tool in such situations. This vital instrument helps prevention of flow of key research outputs and other such information to any undesired sources, while at the same time keeping the requisite details available for all concerned. Such an understanding among associates not only substantiates as a legal document in any eventual legal proceedings but the only existence of the same de-motivates all concerned to take any action against the company’s interest.
Keeps a Check on Competition: A nondisclosure agreement therefore acts as a preventive tool and at the same time curbs internal competition by preventing those involved from opening up their own individual initiatives in the same field of work in a specified area for a particular period. This is your information and therefore does not deserve to be used by others for personal use.
Acts As an Employee Retention Tool: A clearly defined nondisclosure agreement between the employer and employees also acts as an important instrument against increasing instances of employee fraud. A limiting factor, which discourages employee to join direct competition for better packages, is like magical wand to the disturbed employees who spend enormous amounts just to recruit, train and retain employees. Nobody wants to be training school, especially for competition, than why not prevent loss of such crucial intellectual property resources.
Various Non- Disclosure Agreements (NDA) are posted online and cane be referred to for making an NDA. However to ascertain if the same fulfills the desired guidelines and covers the loopholes depending upon the company’s functioning within the legal framework it is advised to get the same made form the professional. This would though entail a one time fee, yet this cost could save those enormous losses arising out of miss-management on account of information and resources i.e. company’s valuable intellectual property.
Alexander Gordon is a writer for http://www.smallbusinessconsulting.com – The Small Business Consulting Community. Sign-up for the free success steps newsletter and get our booklet valued at $24.95 for free as a special bonus. The newsletter provides daily strategies on starting and significantly growing a business.
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