Chapter 4
Ethical and Social
Issues in
Information Systems
Management Information Systems
Chapter 4 Ethical and Social Issues in the Digital Firm
OBJECTIVES
• Analyze the relationship among ethical, social, and political
issues that are raised by information systems
• Identify the main moral dimensions of an information society
and specific principles for conduct that can be used to guide
ethical decisions
• Evaluate the impact of contemporary information systems and
the Internet on the protection of individual privacy and
intellectual property
• Assess how information systems have affected everyday life
• Identify the principal management challenges posed by the
ethical and social impact of information systems and
management solutions
•
Management Information Systems
Chapter 4 Ethical and Social Issues in the Digital Firm
UNDERSTANDING ETHICAL AND SOCIAL ISSUES
RELATED TO SYSTEMS
A New Legal and Social Environment
• Industrial societies have become much less
tolerant of financial, accounting, and computer
crimes.
• Since the late 1980s in the United States, and
worldwide, legislation has been passed that
mandates severe penalties for managers who are
found guilty of a wide variety of financial, reporting,
and computer crimes
Management Information Systems
Chapter 4 Ethical and Social Issues in the Digital Firm
UNDERSTANDING ETHICAL AND SOCIAL ISSUES
RELATED TO SYSTEMS
A New Legal and Social Environment (Continued)
• In the past, firms protected their managers by
providing legal defense counsel. Today, however,
in order to force employees to cooperate,
prosecutors provide incentives to firms to not
mount expensive legal defenses.
• Managers today will have to be especially careful in
making ethical judgments.
Management Information Systems
Chapter 4 Ethical and Social Issues in the Digital Firm
UNDERSTANDING ETHICAL AND SOCIAL ISSUES
RELATED TO SYSTEMS
Ethics
• Principles of right and wrong
• Assumes individuals are acting as free moral
agents to make choices to guide their behavior
Management Information Systems
Chapter 4 Ethical and Social Issues in the Digital Firm
UNDERSTANDING ETHICAL AND SOCIAL ISSUES
RELATED TO SYSTEMS
Information technology creates ethical issues because:
(a) IT changes the distribution of decision-making rights,
power and other resources.
Example: IT makes it possible for millions of people to
download video files, weakening the exclusive rights of
movie studios to control distribution for their own profit.
(b) IT creates new opportunities to commit crimes.
Example: E-mail creates the conditions for extensive
“phishing” or online con games designed to defraud
ordinary citizens.
Management Information Systems
Chapter 4 Ethical and Social Issues in the Digital Firm
UNDERSTANDING ETHICAL AND SOCIAL ISSUES
RELATED TO SYSTEMS
Key Technology Trends that Raise Ethical Issues
• Changes in technology have some obvious
positive consequences, but also create some
potentially or actual negative consequences.
• Computing power doubles every 18 months:
Dependence on computer systems increases, and
it becomes more cost effective to process
massive amounts of personal information.
Management Information Systems
Chapter 4 Ethical and Social Issues in the Digital Firm
UNDERSTANDING ETHICAL AND SOCIAL ISSUES
RELATED TO SYSTEMS
Key Technology Trends Raise Ethical Issues (Continued)
• Rapidly declining data storage costs: Lowers the
cost of creating huge national databases
composed of private information; lowers the cost
of storing and using illegal music files
• Data-mining advances: Increases the ability of
firms and governments to track the movement of
citizens throughout life
• Networking advances and the Internet: Remotely
accessing personal data
Management Information Systems
Chapter 4 Ethical and Social Issues in the Digital Firm
UNDERSTANDING ETHICAL AND SOCIAL ISSUES
RELATED TO SYSTEMS
Non-obvious Relationship Awareness (NORA)
Figure 5-2
Management Information Systems
Chapter 4 Ethical and Social Issues in the Digital Firm
ETHICS IN AN INFORMATION SOCIETY
Basic Concepts: Responsibility, Accountability, and Liability
• Responsibility: Accepting the potential costs,
duties, and obligations for decisions
• Accountability: Mechanisms for identifying
responsible parties
• Liability: Permits individuals (and firms) to
recover damages done to them
• Due process: Laws are well known and
understood, with an ability to appeal to higher
authorities
Management Information Systems
Chapter 4 Ethical and Social Issues in the Digital Firm
ETHICS IN AN INFORMATION SOCIETY
Ethical Analysis
• Identify and describe the facts
• Define the conflict or dilemma, the values involved
• Identify the stakeholders
• Identify the options
• Identify the consequences
Management Information Systems
Chapter 5 Ethical and Social Issues in the Digital Firm
ETHICS IN AN INFORMATION SOCIETY
Candidate Ethical Principles
• Golden Rule: Do unto others as you would have them
do unto you(putting yourself into the place of others)
• Immanuel Kant’s Categorical Imperative: If an action
is not right for everyone to take, then it is not right for
anyone
• Descartes’ rule of change: If an action cannot be
taken repeatedly, then it is not right to be taken at any
time
Management Information Systems
Chapter 5 Ethical and Social Issues in the Digital Firm
ETHICS IN AN INFORMATION SOCIETY
Candidate Ethical Principles (Continued)
• Utilitarian Principle: Take the action that achieves
the greatest value for all concerned
• Risk Aversion Principle: Take the action that
produces the least harm or incurs the least cost to
all concerned
• Ethical “no free lunch” rule: Assume that all
tangible and intangible objects are owned by
someone else, unless shown the contrary. If
someone has created something of value to you,
that person probably wants compensation for your
use ripple
Management Information Systems
Chapter 5 Ethical and Social Issues in the Digital Firm
ETHICS IN AN INFORMATION SOCIETY
Professional Codes of Conduct
• Promises by professions to regulate themselves in the
general interest of society
• Promulgated by associations such as the American
Medical Association (AMA), and the American Bar
Association (ABA)
Management Information Systems
Chapter 5 Ethical and Social Issues in the Digital Firm
ETHICS IN AN INFORMATION SOCIETY
Ethics Codes for IT Professionals
• Association of IT Professionals (AITP)
• ACM Codes of Conduct
• [Link]
• Geographic Information System Professionals
Code of Ethics
Management Information Systems
Chapter 5 Ethical and Social Issues in the Digital Firm
ETHICS IN AN INFORMATION SOCIETY
Some Real-World IT Ethical Dilemmas
• Using systems to increase efficiency, and
causing layoffs and personal hardships
• Using systems to monitor employee e-mail to
protect valuable assets, but decreasing employee
privacy
• Monitoring employee use of the Internet at work,
decreasing employee privacy
Management Information Systems
Chapter 5 Ethical and Social Issues in the Digital Firm
ETHICS IN AN INFORMATION SOCIETY
Some Real-World IT Ethical Dilemmas (Continued)
• Using huge databases to aggregate consumer
information, reducing the costs of granting credit,
but increasing the chance of losing personal data
to criminals, terrorists, or others
What ethical principles can we use to analyze these
situations?
Management Information Systems
Chapter 4 Ethical and Social Issues in the Digital Firm
UNDERSTANDING ETHICAL AND SOCIAL ISSUES
RELATED TO SYSTEMS
A Model for Thinking About Ethical, Social,
and Political Issues
• Illustrates the dynamics connecting ethical,
social, and political issues
• Identifies the moral dimensions of the
“information society,” across individual, social,
and political levels of action
Management Information Systems
Chapter 4 Ethical and Social Issues in the Digital Firm
UNDERSTANDING ETHICAL AND SOCIAL ISSUES
RELATED TO SYSTEMS
The Relationship between Ethical, Social, and Political Issues
in an Information Society
Figure 5-1
Management Information Systems
Chapter 4 Ethical and Social Issues in the Digital Firm
UNDERSTANDING ETHICAL AND SOCIAL ISSUES
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
Management Information Systems
Chapter 5 Ethical and Social Issues in the Digital Firm
THE MORAL DIMENSIONS OF INFORMATION SYSTEMS
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. The claim
to be able to control information about yourself
• Fair information practices: Set of principles
governing the collection and use of information
on the basis of U.S. and European privacy laws
Management Information Systems
Chapter 5 Ethical and Social Issues in the Digital Firm
THE MORAL DIMENSIONS OF INFORMATION SYSTEMS
U.S. Federal Privacy Laws
General federal privacy laws:
• Freedom of Information Act, 1966 Privacy Act of
1974
• Electronic Communications Privacy Act of 1986
• Computer Matching and Privacy Protection Act of
1988
• Computer Security Act of 1987
• Federal Managers Financial Integrity Act of 1982
Management Information Systems
Chapter 5 Ethical and Social Issues in the Digital Firm
THE MORAL DIMENSIONS OF INFORMATION SYSTEMS
The Fair Information Practices Doctrine
Developed in the early 1970s, FIP is the
predominant U.S. doctrine
• Notice/awareness (core principle)
• Choice/consent (core principle)
• Access/participation
• Security
• Enforcement
Management Information Systems
Chapter 5 Ethical and Social Issues in the Digital Firm
THE MORAL DIMENSIONS OF INFORMATION SYSTEMS
The European Directive on Data Protection
Informed consent:
• All uses of personal private information (PII) require
the informed consent of data subjects, and require
the data gatherer to provide the data subject with all
facts needed to make a rational decision
Management Information Systems
Chapter 5 Ethical and Social Issues in the Digital Firm
THE MORAL DIMENSIONS OF INFORMATION SYSTEMS
Safe harbor:
• Private self-regulating policy and enforcement
mechanism that meets the objectives of
government regulators but does not involve
government regulation or enforcement.
Example: U.S. corporations doing business in
Europe must process their data in a “safe
harbor” where the European rules of privacy are
in force
• “Safe harbor” status is granted by the EU after
certification by a trusted third party, e.g.
a recognized public account firm.
Management Information Systems
Chapter 5 Ethical and Social Issues in the Digital Firm
THE MORAL DIMENSIONS OF INFORMATION SYSTEMS
Internet Challenges to Privacy
Cookies:
• Tiny files deposited on a hard drive
• Used to identify the visitor and track visits to the
Web site
• May or may not be used to gather personal
private information
• In some cases, only a visitors customer number
is maintained, not any personal information. In
other cases, personal information can be
gathered
Management Information Systems
Chapter 5 Ethical and Social Issues in the Digital Firm
THE MORAL DIMENSIONS OF INFORMATION SYSTEMS
How Cookies Identify Web Visitors
Figure 5-3
Management Information Systems
Chapter 5 Ethical and Social Issues in the Digital Firm
THE MORAL DIMENSIONS OF INFORMATION SYSTEMS
Internet Challenges to Privacy
Web bugs:
• Tiny graphic files embedded in e-mail messages
and Web pages. When the user views the e-mail,
or views the page, a message is sent to the
server, or to a third-party server without the
knowledge of the user.
• Designed to monitor online Internet user
behavior. In the case of e-mail, the e-mail
address is known to the server.
Management Information Systems
Chapter 5 Ethical and Social Issues in the Digital Firm
THE MORAL DIMENSIONS OF INFORMATION SYSTEMS
Spyware:
• Software downloaded onto a user’s computer—
usually without knowledge—that tracks Web
behavior and reports that behavior to a third-party
server
• Spyware is also used to call for ads from third-
party servers, or to divert customers from one site
to a preferred site.
Management Information Systems
Chapter 5 Ethical and Social Issues in the Digital Firm
THE MORAL DIMENSIONS OF INFORMATION SYSTEMS
Two Models of Providing Web Privacy
U.S. Opt-out model:
• Informed consent means permitting sites to
collect personal information unless the user
explicitly chooses to opt out by unclicking a box
or taking some action. The default is to assume
consent is given.
Management Information Systems
Chapter 5 Ethical and Social Issues in the Digital Firm
THE MORAL DIMENSIONS OF INFORMATION SYSTEMS
European Opt-in model:
• Informed consent means prohibiting an
organization from collecting any personal
information unless the users specifically
requests to allow such use by clicking a box. The
default is to assume consent is not given.
• What do you think works best to protect the
privacy of individuals?
Management Information Systems
Chapter 5 Ethical and Social Issues in the Digital Firm
THE MORAL DIMENSIONS OF INFORMATION SYSTEMS
Property Rights: Intellectual Property
• Intellectual property: Intangible property of any
kind created by individuals or corporations
Three main ways that intellectual property is
protected:
• Trade secret: Intellectual work or product
belonging to business, not in the public
domain
Management Information Systems
Chapter 5 Ethical and Social Issues in the Digital Firm
THE MORAL DIMENSIONS OF INFORMATION SYSTEMS
Property Rights: Intellectual Property
Three main ways that intellectual property is
protected: (Continued)
• Copyright: Statutory grant protecting
intellectual property from being copied for the
life of the author, plus 70 years
• Patents: A grant to the creator of an invention
granting the owner an exclusive monopoly
on the ideas behind an invention for 20 years
Management Information Systems
Chapter 5 Ethical and Social Issues in the Digital Firm
THE MORAL DIMENSIONS OF INFORMATION SYSTEMS
Challenges to Intellectual Property Rights
• Perfect digital copies cost almost nothing.
• Sharing of digital content over the Internet
costs almost nothing.
• Courts have generally not interfered with the
commercialization of technology that creates
perfect copies of protected works as long as
the manufacturer could not control how
customers use its products.
Management Information Systems
Chapter 5 Ethical and Social Issues in the Digital Firm
THE MORAL DIMENSIONS OF INFORMATION SYSTEMS
IT: Accountability, Liability, and Control
• IT can challenge our ability to identify who is
responsible for actions involving systems that
injure people.
• IT can make it difficult to assign liability and
restore injured persons.
• IT raises issues about who should control
information systems that have the potential for
injuring citizens.
Management Information Systems
Chapter 5 Ethical and Social Issues in the Digital Firm
THE MORAL DIMENSIONS OF INFORMATION SYSTEMS
IT: Accountability, Liability, and Control (Continued)
• Example: [Link] is a leading provider
of decision-making information to businesses
and government agencies that helps reduce fraud
and mitigate risk. It lost to criminal business
firms 130,000 personal records of California
residents in February 2005. This loss may result
in the victims losing credit, being denied an
apartment, losing employment, or experiencing
an identity theft.
• What are the issues of accountability, liability,
and control in this case?
Management Information Systems
Chapter 5 Ethical and Social Issues in the Digital Firm
THE MORAL DIMENSIONS OF INFORMATION SYSTEMS
Ethics and System Quality: Data Quality and
System Errors
• No software program is perfect, errors will be
made, even if the errors have a low probability of
occurring. Errors in Windows operating systems
were notorious. At what point should software
“be shipped?” What kind of disclaimer
statements might be appropriate?
Management Information Systems
Chapter 5 Ethical and Social Issues in the Digital Firm
THE MORAL DIMENSIONS OF INFORMATION SYSTEMS
Ethics and System Quality: Data Quality and
System Errors (Continued)
• No database is without errors. In fact, most
consumer and government personal information
databases have errors ranging from 10-20% of the
data records being either inaccurate, incomplete, or
ambiguous. How should decision makers treat this
kind of information in order to be fair to data
subjects?
Management Information Systems
Chapter 5 Ethical and Social Issues in the Digital Firm
THE MORAL DIMENSIONS OF INFORMATION SYSTEMS
IT and Quality of Life Issues: Equity, Access,
and Boundaries
• Balancing Power: Center Versus Periphery: Is IT
centralizing decision-making power in the hands
of a few, or is it allowing many more people to
participate in decisions that affect their lives?
• Rapidity of change: Reduced response time to
competition: The business you work for may not
be able to respond to rapidly changing IT-enabled
market places. There goes your job offshore!
Management Information Systems
Chapter 5 Ethical and Social Issues in the Digital Firm
THE MORAL DIMENSIONS OF INFORMATION SYSTEMS
IT and Quality of Life Issues: Equity, Access, and
Boundaries (Continued)
• Maintaining boundaries: Family, work, and
leisure: “Do anything anywhere” environment
blurs the boundaries between work, vacation,
and family time
• Dependence and vulnerability: There are few
regulatory standards to protect us from the
failure of complex electrical, communications,
and computer networks upon which we all
depend
Management Information Systems
Chapter 5 Ethical and Social Issues in the Digital Firm
THE MORAL DIMENSIONS OF INFORMATION SYSTEMS
IT and Quality of Life Issues: Equity, Access, and
Boundaries (Continued)
• Computer crime: Commission of illegal acts through
the use of a computer or against a computer system is
on the increase. Spam is now illegal (a federal and
state felony offense), and phishing to defraud people is
also a felony. But 70% of e-mail is now spam, and
phishing crimes are the fastest growing Internet fraud.
• Computer abuse: Unethical but not necessarily illegal
acts. Adware programs that alter a person’s browser
are not illegal but most of us would not want this to
happen (without knowing about it)
Management Information Systems
Chapter 5 Ethical and Social Issues in the Digital Firm
THE MORAL DIMENSIONS OF INFORMATION SYSTEMS
IT and Quality of Life Issues: Equity, Access, and
Boundaries (Continued)
• Employment: Trickle-down technology and
reengineering job loss: The rapid development of
the Internet has made it possible to offshore
hundreds of thousands of jobs from high-wage
countries to low- wage countries. Reengineering
existing jobs using IT also results in few jobs
(generally). While this benefits low-wage countries
enormously, the costs are paid by high-wage
country workers
Management Information Systems
Chapter 5 Ethical and Social Issues in the Digital Firm
THE MORAL DIMENSIONS OF INFORMATION SYSTEMS
IT and Quality of Life Issues: Equity, Access, and
Boundaries (Continued)
• Equity and access: While 500 million people
worldwide are on the Internet, billions of others
are not. Within the United States, the digital
divide has declined among ethnic groups, but still
persists. The divide between men and women has
largely disappeared.
Management Information Systems
Chapter 5 Ethical and Social Issues in the Digital Firm
THE MORAL DIMENSIONS OF INFORMATION SYSTEMS
Health Risks: RSI, CVS, and Technostress
IT has been the source of several diseases
Repetitive Stress Injury (RSI):
(RSI)
• Occupational disease
• Muscle groups are forced through repetitive
actions with high-impact loads or thousands of
repetitions with low-impact loads.
Management Information Systems
Chapter 5 Ethical and Social Issues in the Digital Firm
THE MORAL DIMENSIONS OF INFORMATION SYSTEMS
Carpal Tunnel Syndrome (CTS):
• Type of RSI
• Pressure on the median nerve through the wrist’s
bony carpal tunnel structure produces pain.
Management Information Systems
Chapter 5 Ethical and Social Issues in the Digital Firm
THE MORAL DIMENSIONS OF INFORMATION SYSTEMS
Computer Vision Syndrome (CVS):
• Eyestrain condition
• Related to computer display screen usage
• Symptoms include headaches, blurred vision,
and dry and irritated eyes
Management Information Systems
Chapter 5 Ethical and Social Issues in the Digital Firm
THE MORAL DIMENSIONS OF INFORMATION SYSTEMS
Technostress:
• Stress induced by computer use
• Symptoms include aggravation, hostility toward
humans, impatience, and enervation
Management Information Systems
Chapter 5 Ethical and Social Issues in the Digital Firm
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 Information Systems
Chapter 5 Ethical and Social Issues in the Digital Firm
MANAGEMENT OPPORTUNITIES, CHALLENGES, AND SOLUTIONS
Management Challenges:
• Understanding the moral risks of new technology
• Establishing corporate ethics policies that include
information systems issues
Management Information Systems
Chapter 5 Ethical and Social Issues in the Digital Firm
MANAGEMENT OPPORTUNITIES, CHALLENGES, AND SOLUTIONS
Solution Guidelines:
Management should devise policies and ethical
standards specifically for IT areas that cover the
following:
• Information rights and obligations
• Property rights and obligations
• System quality
• Quality of life
• Accountability and control