C4- Social, Legal, and Ethical Issues in the

Digital Firm

Ethics

• Principles of right and wrong that individuals, acting as free moral agents, use to make choices to guide their behaviors

• Unethical Behavior in Firms – several recent examples (e.g.

Enron) – role of IS: financial reporting

systems used to bury decisions from public scrutiny

Five moral dimensions

•Information rights and obligations•Property rights and obligations•Accountability and control•System quality•Quality of life

Key Technology trends that raise Ethical Issues

• Computing power doubles every 18 months• More organizations depend on computer systems for critical

operations

• Rapidly declining data storage costs• Organizations can easily maintain detailed databases on

individuals

• Data analysis advances• Companies can analyze vast quantities of data gathered on

individuals to develop detailed profiles of individual behavior

• Networking advances and the Internet• Easier to copy data from one location to another and to

access personal data from remote locations

Ethics in an Information Society

Ethical Analysis– 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 consequences

of your options

Make Ethical Decisions • religious codes • well respected authority • appeal to known

principles • put self in place of

affected parties• utilitarianism: rank order

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Spyware

• Software downloaded onto a user’s computer – usually without the user’s knowledge – that tracks Web behavior and reports that behavior to a third-party server– Often used to divert customers from one site to a

preferred site

Internet Challenges to Privacy

Internet monitoring software

Internet Challenges to Privacy

Information rights

• Privacy and freedom in the Internet Age– Privacy: Claim of individuals to be left alone,

free from surveillance or interference from other individuals, organizations, or the state.

– Personal Information Protection and Electronic Documents Act (PIPEDA) establishes principles for collection, use, and disclosure of personal information

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Internet Challenges to Privacy

Fair Information Practices

• Principles – Notice/Awareness– Choice/Consent – Access/Participation – Security – Enforcement

• Internet Challenges to Privacy:– Ability to collect data on

online activities– Cookies are used to collect

information from Web site visits

– Web bugs and spyware can be installed surreptitiously

• Opt-in versus opt-out models of informed consent

Internet Challenges to Privacy

Cookies to identify Web visitors

Internet Challenges to Privacy

Web bugs

• Tiny graphic files embedded in e-mail messages and Web pages

• Designed to monitor online Internet user behavior

• When a user views the e-mail or the page, a message is sent to another computer without the knowledge of the user

Internet Challenges to Privacy

Challenges to Intellectual Property Rights

• Perfect digital copies cost almost nothing• Sharing of digital content over the Internet

costs almost nothing• Sites, software, and services for file

trading are not easily regulated. • A web page may present data from many

sources, and incorporate framing

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Accountability

• if software causes injury, who is liable? • producer of software has some

responsibility• how about manager? programmer? IT

head?

System Quality

• data quality • system errors • ship it, even when not quite right (e.g.

Microsoft releases)• problems include:

– software bugs – hardware failures – poor input quality

• most common source of business system failure = data quality

Quality of life

• Family, work and leisure • Computer crime/abuse - e.g. spam • Job losses due to technology

– redesigning business processes: middle managers, clerical

• Digital divide • Health risks

– carpal tunnel syndrome

Spam

• Junk e-mail sent by an organization or individual to a mass audience who have expressed no interest – Laws against spamming in Europe – Serendipity desired by some – Spam filtering software

• costs very little; growing in use

Management opportunities, challenges, and solutions

• Management Opportunities:– Managers have the opportunity to use

information technology to create an ethical business and social environment.

– This does not mean management actions will always please all stakeholders, but at least management actions should take into account the ethical dimensions of IT-related decisions

• Management Challenges:– Understanding the moral risks of new

technology – Establishing corporate ethics policies that

include information systems issues

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