107 CH 4 - 241

Chapter 4
Copyright © 2013 Dorling Kindersley (India) Pvt. Ltd.

Ethical and Social Issues in
Information Systems
Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
Understanding Ethical and Social Issues
Related to Systems
• Recent cases of failed ethical judgment in business

• Lehman Brothers, Minerals Management Service, Pfizer
• In many, information systems used to bury decisions from
public scrutiny
• Ethics
• Principles of right and wrong that individuals, acting as free
moral agents, use to make choices to guide their behaviors
Related to Systems
• Information systems and ethics

• Information systems raise new ethical questions because they
create opportunities for:
▪ Intense social change, threatening existing distributions of
power, money, rights, and obligations
▪ New kinds of crime
4
IT Security, Ethics, and Society

• IT has both beneficial
and detrimental (harmful)
effects on society and people
• Manage work activities to
minimize the detrimental
effects of IT
• Optimize the beneficial
effects.
Related to Systems
THE
RELATIONSHIP
BETWEEN

ETHICAL,
SOCIAL, AND
POLITICAL
ISSUES IN AN
INFORMATION
SOCIETY
The introduction of new

information technology
has a ripple effect,
raising new ethical,
social, and political
issues that must be dealt
with on the individual,
social, and political FIGURE 4-1
levels. These issues have
five moralInformation
Management dimensions:
Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
information rights and
Related to Systems
• Five moral dimensions of the information age

• Information rights and obligations
• Property rights and obligations
• Accountability and control
• System quality
• Quality of life
Related to Systems
• Key technology trends that raise ethical issues

1) Doubling of computer power - More organizations depend on

computer systems for critical operations
2) Rapidly declining data storage costs - Organizations can easily
maintain detailed databases on individuals
3) Networking advances and the Internet - Copying data from one
location to another and accessing personal data from remote
locations is much easier
Related to Systems
Key technology trends that raise ethical issues (cont.)

4) Advances in data analysis techniques
i) Companies can analyze vast quantities of data gathered on
individuals for:
○ Profiling
(a)Combining data from multiple sources to create
dossiers of detailed information on individuals
○ Nonobvious relationship awareness (NORA)
(a)Combining data from multiple sources to find
obscure hidden connections that might help identify
criminals or terrorists
Related to Systems
NONOBVIOUS
RELATIONSHIP
AWARENESS

(NORA)
NORA technology can take
information about people
from disparate sources and
find obscure, nonobvious
relationships. It might
discover, for example, that
an applicant for a job at a
casino shares a telephone
number with a known
criminal and issue an alert
to the hiring manager.
FIGURE 4-2
10
Business Ethics for Executives

• Honesty
• Integrity
• Promise-Keeping
• Trustworthiness
• Loyalty
• Fairness
• Concern for Others
• Respect for Others
• Law Abiding
• Commitment to Excellence
• Leadership
• Reputation & Morale
• Accountability
Ethics in an Information Society
• Ethical analysis: A five-step process

• Identify and clearly describe the facts
• Define the conflict or dilemma and identify the higher-order
values involved
• Identify the stakeholders
• Identify the options that you can reasonably take
• Identify the potential consequences of your options
• Six Candidate Ethical Principles

• Golden Rule
▪ Do unto others as you would have them do unto you
• Immanuel Kant’s Categorical Imperative
▪ If an action is not right for everyone to take, it is not right for
anyone
• Descartes’ Rule of Change
▪ If an action cannot be taken repeatedly, it is not right to take
at all
• Six Candidate Ethical Principles (cont.)

• Utilitarian Principle
▪ Take the action that achieves the higher or greater value
• Risk Aversion Principle
▪ Take the action that produces the least harm or least potential
cost
• Ethical “no free lunch” Rule
▪ Assume that virtually all tangible and intangible objects are
owned by someone unless there is a specific declaration
otherwise
The Moral Dimensions of Information
Systems

• Privacy:
• Claim of individuals to be left alone, free from surveillance or
interference from other individuals, organizations, or state.
Claim to be able to control information about yourself
Systems
• Fair information practices:
• Set of principles governing the collection and use of information

• Basis of most U.S. and European privacy laws
• Based on mutuality of interest between record holder and
individual
• Restated and extended by FTC in 1998 to provide guidelines for
protecting online privacy
Systems
• European Directive on Data Protection:

• Requires companies to inform people when they collect
information about them and disclose how it will be stored and
used.
• Requires informed consent of customer
• EU member nations cannot transfer personal data to countries
with no similar privacy protection (e.g. U.S.)
• U.S. businesses use safe harbor framework
▪ Self-regulating policy to meet objectives of government
legislation without involving government regulation or
enforcement.
Systems
• Internet Challenges to Privacy:
• Cookies
▪ Tiny files downloaded by Web site to visitor’s hard drive to help

identify visitor’s browser and track visits to site
▪ Allow Web sites to develop profiles on visitors
• Web beacons/bugs
▪ Tiny graphics embedded in e-mail and Web pages to monitor
who is reading message
• Spyware
▪ Surreptitiously installed on user’s computer
▪ May transmit user’s keystrokes or display unwanted ads
• Google’s collection of private data; behavioral targeting
Systems
HOW COOKIES IDENTIFY WEB VISITORS

Cookies are written by a Web site on a visitor’s hard drive. When the visitor
returns to that Web site, the Web server requests the ID number from the cookie
FIGURE 4-3 and uses it to access the data stored by that server on that visitor. The Web site
can then use these data to display personalized information.
Systems
• U.S. allows businesses to gather transaction information and use

this for other marketing purposes

• Online industry promotes self-regulation over privacy legislation
• However, extent of responsibility taken varies
• Statements of information use
• Opt-out selection boxes
• Online “seals” of privacy principles
• Most Web sites do not have any privacy policies
Systems
• Technical solutions

• The Platform for Privacy Preferences (P3P)
▪ Allows Web sites to communicate privacy policies to visitor’s
Web browser – user
▪ User specifies privacy levels desired in browser settings
▪ E.g. “medium” level accepts cookies from first-party host sites
that have opt-in or opt-out policies but rejects third-party
cookies that use personally identifiable information without an
opt-in policy
Systems
THE P3P STANDARD

FIGURE 4-4
P3P enables Web sites to translate their privacy policies into a standard format that can be
read by the user’s Web browser software. The browser software evaluates the Web site’s
privacy policy to determine whether it is compatible with the user’s privacy preferences.
Systems
• Property rights: Intellectual property

• Intellectual property: Intangible property of any kind created
by individuals or corporations
• Three main ways that protect intellectual property
▪ Trade secret: Intellectual work or product belonging to
business, not in the public domain
▪ Copyright: Statutory grant protecting intellectual property
from being copied for the life of the author, plus 70 years
▪ Patents: Grants creator of invention an exclusive monopoly on
ideas behind invention for 20 years
Systems
• Challenges to intellectual property rights

• Digital media different from physical media (e.g. books)
▪ Ease of replication
▪ Ease of transmission (networks, Internet)
▪ Difficulty in classifying software
▪ Compactness
▪ Difficulties in establishing uniqueness
• Digital Millennium Copyright Act (DMCA)
• Makes it illegal to circumvent technology-based protections of
copyrighted materials
Systems
• System Quality: Data Quality and System Errors

• What is an acceptable, technologically feasible level of system
quality?
▪ Flawless software is economically unfeasible
• Three principal sources of poor system performance:
▪ Software bugs, errors
▪ Hardware or facility failures
▪ Poor input data quality (most common source of business
system failure)
Systems
• Quality of life: Equity, access, and boundaries
• Negative social consequences of systems

▪ Balancing power: Although computing power decentralizing,
key decision-making remains centralized
▪ Rapidity of change: Businesses may not have enough time to
respond to global competition
▪ Maintaining boundaries: Computing, Internet use lengthens
work-day, infringes on family, personal time
▪ Dependence and vulnerability: Public and private organizations
ever more dependent on computer systems
Systems
• Computer crime and abuse
• Computer crime: Commission of illegal acts through use of

compute or against a computer system – computer may be
object or instrument of crime
• Computer abuse: Unethical acts, not illegal
▪ Spam: High costs for businesses in dealing with spam
• Employment:
• Reengineering work resulting in lost jobs
• Equity and access – the digital divide:
• Certain ethnic and income groups in the United States less
likely to have computers or Internet access
Systems
• Health risks:

• Repetitive stress injury (RSI)
▪ Largest source is computer keyboards
▪ Carpal Tunnel Syndrome (CTS)
• Computer vision syndrome (CVS)
• Technostress
• Role of radiation, screen emissions, low-level electromagnetic
fields

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Chapter 4

Copyright © 2013 Dorling Kindersley (India) Pvt. Ltd.

• Recent cases of failed ethical judgment in business

Copyright © 2013 Dorling Kindersley (India) Pvt. Ltd.

• Information systems and ethics

Copyright © 2013 Dorling Kindersley (India) Pvt. Ltd.

IT Security, Ethics, and Society

Copyright © 2013 Dorling Kindersley (India) Pvt. Ltd.

The introduction of new

• Five moral dimensions of the information age

Copyright © 2013 Dorling Kindersley (India) Pvt. Ltd.

• Key technology trends that raise ethical issues

Copyright © 2013 Dorling Kindersley (India) Pvt. Ltd.

Key technology trends that raise ethical issues (cont.)

Copyright © 2013 Dorling Kindersley (India) Pvt. Ltd.

Copyright © 2013 Dorling Kindersley (India) Pvt. Ltd.

Business Ethics for Executives

• Ethical analysis: A five-step process

Copyright © 2013 Dorling Kindersley (India) Pvt. Ltd.

• Six Candidate Ethical Principles

Copyright © 2013 Dorling Kindersley (India) Pvt. Ltd.

• Six Candidate Ethical Principles (cont.)

Copyright © 2013 Dorling Kindersley (India) Pvt. Ltd.

Copyright © 2013 Dorling Kindersley (India) Pvt. Ltd.

Copyright © 2013 Dorling Kindersley (India) Pvt. Ltd.

• European Directive on Data Protection:

Copyright © 2013 Dorling Kindersley (India) Pvt. Ltd.

Copyright © 2013 Dorling Kindersley (India) Pvt. Ltd.

Copyright © 2013 Dorling Kindersley (India) Pvt. Ltd.

• U.S. allows businesses to gather transaction information and use

Copyright © 2013 Dorling Kindersley (India) Pvt. Ltd.

Copyright © 2013 Dorling Kindersley (India) Pvt. Ltd.

Copyright © 2013 Dorling Kindersley (India) Pvt. Ltd.

• Property rights: Intellectual property

Copyright © 2013 Dorling Kindersley (India) Pvt. Ltd.

• Challenges to intellectual property rights

Copyright © 2013 Dorling Kindersley (India) Pvt. Ltd.

• System Quality: Data Quality and System Errors

Copyright © 2013 Dorling Kindersley (India) Pvt. Ltd.

Copyright © 2013 Dorling Kindersley (India) Pvt. Ltd.

Copyright © 2013 Dorling Kindersley (India) Pvt. Ltd.

Copyright © 2013 Dorling Kindersley (India) Pvt. Ltd.

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