Ethics and the Conduct of Business Eighth edition Chapter 6 Privacy Copyright © 2017, 2012, 2009 Pearson Education, Inc. All Rights Reserved

Modules Introduction: Privacy 6.1: Challenges to Privacy 6.2: Meaning and Value of Privacy 6.3: Privacy Away from Work 6.4: Privacy of Employee Records 6.5: Big Data Analytics 6.6: Using the Internet Conclusion: Privacy Copyright © 2017, 2012, 2009 Pearson Education, Inc. All Rights Reserved

Learning Objectives (1 of 2) 6.1: Identify how different business practices challenge the privacy of employees in the workplace and consumers in the marketplace 6.2: Explain the concept of privacy and how the utilitarian and Kantian arguments defend privacy as a necessary right of all individuals 6.3: Evaluate the reasoning that leads a company to monitor its employees and the measures undertaken to limit such monitoring Copyright © 2017, 2012, 2009 Pearson Education, Inc. All Rights Reserved

Learning Objectives (2 of 2) 6.4: Determine what ethical issue(s) are associated with a particular handling or use of employee records and whether the action is justified or a violation of the employee’s privacy 6.5: Describe how big data analytics enables companies to profile and target consumers and the potential ethical issues with this process 6.6: Analyze the ethical issues associated with collecting and using information about consumers’ online activities, and the adequacy of the rules and principles created to protect Internet privacy Copyright © 2017, 2012, 2009 Pearson Education, Inc. All Rights Reserved

Introduction: Privacy Psychological testing at Dayton Hudson case Telecommunication companies compelled to provide information Internet the most recent challenge to privacy Government surveillance impacts the privacy of individuals Understanding of right to privacy is important Copyright © 2017, 2012, 2009 Pearson Education, Inc. All Rights Reserved

6.1: Challenges to Privacy Objective: Identify how different business practices challenge the privacy of employees in the workplace and consumers in the marketplace 6.1.1: Privacy in the Workplace Available tools Why do companies collect personal data? Why is evaluation important? 6.1.2: Privacy in the Marketplace Information gathering Database marketing Issues in database marketing 6.1.1: Privacy in the Workplace Point 1- Available tools Pencil-and-paper test Drug test Employer-issued mobile devices Concealed cameras Point 2- Why do companies collect personal data? Due to changing nature of work Potential for misuse and costly errors To avoid employee theft and stealing trade secrets To provide safe workplace Greater concerns create greater dangers to employee right to privacy Point 3- Why is evaluation important? For predicting job performance For identifying potentially troublesome employees For assessing if the employees meet employer expectations For determining the termination of employee during lay-offs 6.1.2: Privacy in the Marketplace Point 1- Information gathering Corporations use same tools employed for employees Consumers are the main target Point 2- Database marketing Utilization of Internet Provides tailored information Use of database marketing Internet advertising Point 3- Issues in database marketing Control over information Potential misuse Copyright © 2017, 2012, 2009 Pearson Education, Inc. All Rights Reserved

6.2: Meaning and Value of Privacy (1 of 2) Objective: Explain the concept of privacy and how the utilitarian and Kantian arguments defend privacy as a necessary right of all individuals 6.2.1: History of the Concept Overview Acceptance 6.2.2: Defining Privacy Right to be left alone Right to control access to personal information Having secrets remain secrets 6.2.1: History of the Concept Point 1- Overview Followed from the nineteenth century No mention in Bill of Rights 1890 article in Harvard Law Review Warren and Brandeis proposed privacy of private life Theory was rejected by court Point 2- Acceptance Privacy declared as constitutionally protected right in 1965 Griswold v. Connecticut 6.2.2: Defining Privacy Point 1- Right to be left alone Warren and Brandeis definition Critics argue it as overly broad Narrow in few situations Privacy involves information Point 2- Right to control access to personal information Control over information about ourselves Too broad and too narrow Privacy cannot be identified with control Point 3- Having secrets remain secrets Certain facts of a person are not known by others Undocumented personal information Copyright © 2017, 2012, 2009 Pearson Education, Inc. All Rights Reserved

6.2: Meaning and Value of Privacy (2 of 2) Objective: Explain the concept of privacy and how the utilitarian and Kantian arguments defend privacy as a necessary right of all individuals 6.2.3: Utilitarian Arguments Arguments Drawbacks 6.2.4: Kantian Arguments Two Kantian themes Common utilitarian and Kantian arguments 6.2.3: Utilitarian Arguments Point 1- Arguments Personnel decision making using inaccurate information harms the individuals Employees lives are disrupted Harm continues to occur when employees unable to examine their files Point 2- Drawbacks Appeals to consequences Rests on an unapproved assumption Assumes that more harm than good will result Considers only possible harmful consequences 6.2.4: Kantian Arguments Point 1- Two Kantian themes Autonomy Respect for persons Point 2- Common utilitarian and Kantian arguments Privacy important to dignity and well-being Privacy not absolutely necessary for either one Privacy an important value in our culture Privacy is like luxury that soon becomes necessity Copyright © 2017, 2012, 2009 Pearson Education, Inc. All Rights Reserved

6.3: Privacy Away from Work Objective: Evaluate the reasoning that leads a company to monitor its employees and the measures undertaken to limit such monitoring 6.3.1: Justifying Monitoring Personal behavior and ability of employees Cost of doing business 6.3.2: Limits to Monitoring Social media Ways of monitoring Limits applicable for government and business 6.3.1: Justifying Monitoring Point 1- Personal behavior and ability of employees Workers tested for drug use to provide safe workplace Drug use affects workplace performance and environment Testing for drug use benefits employer and employee Point 2- Cost of doing business Direct costs such as smoking and insurance policies Indirect costs such as using social media 6.3.2: Limits to Monitoring Point 1- Social media Employers can access information that is publicly posted Efforts are underway to limit employer use of private information Examples such as Civil Rights Act and National Labor Relations Act Point 2- Ways of monitoring Disclosing how, when, and under what circumstance monitoring takes place Collect important information about citizens Point 3- Limits applicable for government and business Must demonstrate a cause of action Ways of monitoring should be used selectively Copyright © 2017, 2012, 2009 Pearson Education, Inc. All Rights Reserved

6.4: Privacy of Employee Records (1 of 4) Objective: Determine what ethical issue(s) are associated with a particular handling or use of employee records and whether the action is justified or a violation of the employee’s privacy 6.4.1: Ethical Issues with Records Issues to be addressed Examples 6.4.1: Ethical Issues with Records Point 1- Issues to be addressed Kind of information collected Use to which information is put Person who accesses the information Disclosure outside the company Means of collecting information Point 2- Examples Maintaining medical records Only medical information should be collected Only people who are monitoring health and safety should have access Must use the information for intended purpose Copyright © 2017, 2012, 2009 Pearson Education, Inc. All Rights Reserved

Figure 6.1: Some Privacy Issues with Employee Records Services offered by data aggregators Sell access to data Offer consulting Offer mitigation services Copyright © 2017, 2012, 2009 Pearson Education, Inc. All Rights Reserved

6.4: Privacy of Employee Records (2 of 4) Objective: Determine what ethical issue(s) are associated with a particular handling or use of employee records and whether the action is justified or a violation of the employee’s privacy 6.4.2: Justifying a Purpose Examples Resolving disagreements 6.4.3: Disclosure to Outsiders Overview Argument 6.4.2: Justifying a Purpose Point 1- Examples  First three issues Henry Ford’s paternalistic regard was not legitimate DuPont Company screening black applicants Point 2- Resolving disagreements  Specify necessary business conditions Contract model of employer-employee relationship 6.4.3: Disclosure to Outsiders Point 1- Overview Fourth issue Employers should not disclose information without employees’ consent Information should be used for the justified purpose Employer has no justification in giving out information Point 2- Argument  Unrelated use of medical records is prohibited Neither the employer nor the employee own the information Should develop a conceptual model for personal information Copyright © 2017, 2012, 2009 Pearson Education, Inc. All Rights Reserved

Figure 6.2 Services offered by data aggregators Sell access to data Offer consulting Offer mitigation services Copyright © 2017, 2012, 2009 Pearson Education, Inc. All Rights Reserved

6.4: Privacy of Employee Records (3 of 4) Objective: Determine what ethical issue(s) are associated with a particular handling or use of employee records and whether the action is justified or a violation of the employee’s privacy 6.4.4: Gathering Information Overview More intrusive means 6.4.4: Gathering Information Point 1- Overview Use of certain means may violate an employee’s right to privacy Examples of impermissible means: polygraph testing and pretext interviews Less intrusive means are preferred Point 2- More intrusive means Conducting strip search, constant monitoring, polygraph machines Denies people in creating their own identity Copyright © 2017, 2012, 2009 Pearson Education, Inc. All Rights Reserved

Figure 6.3 Services offered by data aggregators Sell access to data Offer consulting Offer mitigation services Copyright © 2017, 2012, 2009 Pearson Education, Inc. All Rights Reserved

6.4: Privacy of Employee Records (4 of 4) Objective: Determine what ethical issue(s) are associated with a particular handling or use of employee records and whether the action is justified or a violation of the employee’s privacy 6.4.5: Accuracy, Completeness, and Access Overview Objection to drug test and polygraph machine 6.4.5: Accuracy, Completeness, and Access Point 1- Overview  Employers who maintain inaccurate files are not invading privacy Use of information in unfair ways is the issue Point 2- Objection to drug test and polygraph machine  Unreliable False results obtained in using inexpensive drug tests False results obtained when responses recorded in polygraph are due to different kind of association Copyright © 2017, 2012, 2009 Pearson Education, Inc. All Rights Reserved

6.5: Big Data Analytics 6.5.1: Data Collection Objective: Describe how big data analytics enables companies to profile and target consumers and the potential ethical issues with this process 6.5.1: Data Collection Methods of data collection Services provided by aggregators 6.5.2: Ethical Issues with Big Data Lack of awareness Difficulty of protection Loss of privacy 6.5.1: Data Collection Point 1- Methods of data collection Cookies Ad networks Ad networks collaborate with aggregators Point 2- Services provided by aggregators Access to data Consulting services Risk mitigation services 6.5.2: Ethical Issues with Big Data Point 1- Lack of awareness A few people are aware Occurs without much legal oversight Individuals cannot take steps to protect Consumers have little knowledge over the process Point 2- Difficulty of protection Free flow of information between different companies Opting out is not effective with all aggregators Point 3- Loss of privacy Aggregators prepare the whole picture of an individual’s identity It would become impossible for anyone to go online without their identity being known Copyright © 2017, 2012, 2009 Pearson Education, Inc. All Rights Reserved

6.6: Using the Internet (1 of 2) Objective: Analyze the ethical issues associated with collecting and using information about consumers’ online activities, and the adequacy of the rules and principles created to protect Internet privacy 6.6.1: Information Collection Google Criticisms of Facebook’s privacy policy 6.6.2: Ethical Issues with Internet Use Overview Two problems Three responses 6.6.1: Information Collection Point 1- Google Collect and utilize information by providing free services Integrates user information from its different services Email sent by Gmail users are used to target advertisements Google instituted a unified privacy policy in 2012 Point 2- Criticisms of Facebook’s privacy policy Information can be viewed by unauthorized users Privacy settings are improper Targets advertisements based on user information Registration protocols help in gaining information away from its own site 6.6.2: Ethical Issues with Internet Use Point 1- Overview Internet is a public arena Many practices of Internet companies violate our rights We give up information to enjoy the benefit Loss of privacy is a trade-off voluntarily made Point 2- Two problems Confining profiles Threat to equality Point 3- Three responses First response made by those who worry about “dossier” society Second response made by those who view personal data as property Third response made by those who want to balance people’s concerns about privacy Copyright © 2017, 2012, 2009 Pearson Education, Inc. All Rights Reserved

6.6: Using the Internet (2 of 2) Objective: Analyze the ethical issues associated with collecting and using information about consumers’ online activities, and the adequacy of the rules and principles created to protect Internet privacy 6.6.3: Protecting Privacy Privacy rules Protection principles Implementing principles 6.6.3: Protecting Privacy Point 1- Privacy rules Fair information practices Organization for Economic Cooperation and Development European Union Privacy Directive United States preferred piecemeal legal response California codified the Online Privacy Act Point 2- Protection principles Notice/awareness Choice/consent Access/participation Integrity/security Enforcement/redress Point 3- Implementing principles Internet presents unique challenge in implementation Who should be involved in implementing privacy standards? What means should be used while implementing? Copyright © 2017, 2012, 2009 Pearson Education, Inc. All Rights Reserved

Conclusion: Privacy Privacy a recent topic Finding the right means is a challenge Protecting privacy requires coordinated solution Developing and implementing is a challenge until solutions are found Copyright © 2017, 2012, 2009 Pearson Education, Inc. All Rights Reserved