Understanding Business Ethics 2 nd Edition © 2014 SAGE Publications, Inc. Chapter 9 Ethics and Information Technology Understanding Business Ethics Stanwick and Stanwick 2 nd Edition

Understanding Business Ethics 2 nd Edition © 2014 SAGE Publications, Inc. We Thought You Wanted the Extra Pillow Mystique Program of the Ritz Carlton – Accumulates what it deems relevant information pertaining to its guests such as personal preferences of guests The hotel industry does not have any specific privacy laws that are tailored to the unique methods available to obtain information Marriott, which owns Ritz Carlton, has a similar system 1

Understanding Business Ethics 2 nd Edition © 2014 SAGE Publications, Inc. Why Are Information Technology Ethical Issues Important? Results of AMA/ePolicy Institute survey of electronics monitoring – 30% of firms reported they had fired workers due to misusing the Internet – 28% reported they had fired employees for misuse of their corporate accounts – 6% of the respondents reported that they had fired employees for misuse of the corporate telephone 2

Understanding Business Ethics 2 nd Edition © 2014 SAGE Publications, Inc. Why Are Information Technology Ethical Issues Important? Results of AMA/ePolicy Institute survey of electronics monitoring – 66% reported they had monitored employees’ computers to determine which Web sites had been selected – 65% of the firms stated they used software to block connections to inappropriate websites – 45% monitored keystrokes, amount of time spent on the computer and the content 3

Understanding Business Ethics 2 nd Edition © 2014 SAGE Publications, Inc. Why Are Information Technology Ethical Issues Important? Results of AMA/ePolicy Institute survey of electronics monitoring – 43% saved and reviewed computer files of their employees – 84% notified their employees they were monitoring the phone 4

Understanding Business Ethics 2 nd Edition © 2014 SAGE Publications, Inc. Why Are Information Technology Ethical Issues Important? Results of AMA/ePolicy Institute survey of electronics monitoring – 24% have had subpoenaed for legal cases – 15% had to address workplace lawsuits that were the result of employee 5

Understanding Business Ethics 2 nd Edition © 2014 SAGE Publications, Inc. Management Issues and Policy Areas for Information Technology Management Issues – Privacy – Ownership – Control – Accuracy – Security 6

Understanding Business Ethics 2 nd Edition © 2014 SAGE Publications, Inc. Policy Areas That Address Technology Management Issues Data Policy Intellectual Rights Policy Workers’ Rights Policy 7

Understanding Business Ethics 2 nd Edition © 2014 SAGE Publications, Inc. Critical Analysis to Assist in Decision Making Stakeholder Analysis Utilitarian Goal-based Analysis Rights-based Analysis Duty-based Analysis 8

Understanding Business Ethics 2 nd Edition © 2014 SAGE Publications, Inc. Critical Analysis to Assist in Decision Making Stakeholder Analysis Which stakeholders will be impacted by this decision? What is at risk for each stakeholder? How do my decision options impact the interests of the stakeholders? Should certain stakeholders be considered a high priority based on this information technology decision? 9

Understanding Business Ethics 2 nd Edition © 2014 SAGE Publications, Inc. Critical Analysis to Assist in Decision Making Utilitarian Goal-based Analysis Used to help managers determine a decision that will produce the greatest good to the greatest number of stakeholders Attempts to determine the maximum benefits to all of the firm’s stakeholders instead of focusing solely on one stakeholder group, the stockholders 10

Understanding Business Ethics 2 nd Edition © 2014 SAGE Publications, Inc. Critical Analysis to Assist in Decision Making Rights-based Analysis Occurs when a manager reviews the potential decisions and considers how each option would impact the rights of each type of stakeholder For example, would the information technology decision impact a stakeholder’s human rights, privacy rights, individual freedoms, or institutional rights? 11

Understanding Business Ethics 2 nd Edition © 2014 SAGE Publications, Inc. Critical Analysis to Assist in Decision Making Duty-based Analysis Focuses on an evaluation of whether the options available to the manager impact any of the fundamental ethical duties of the manager Ethical duties would include being honest, fair, and truthful 12

Understanding Business Ethics 2 nd Edition © 2014 SAGE Publications, Inc. Privacy of Employees Electronic Mail ( ) – It can be assumed that most messages are not private – Under the1986 Electronic Communications Privacy Act, employers can consider messages as corporate property – can be subpoenaed and made public through court proceedings 13

Understanding Business Ethics 2 nd Edition © 2014 SAGE Publications, Inc. Types of Computer Monitoring Two main types of computer monitoring – First type is a software that allows the employer to see what is on the computer screen in an employee’s office – Second type allows the employer to determine how long a computer has been idle 14

Understanding Business Ethics 2 nd Edition © 2014 SAGE Publications, Inc. Is an Invasion of Privacy Justifiable by an Employer? Criteria to consider: 1.For what purpose is the undocumented personal knowledge sought? 2.Is this purpose a legitimate and important one? 3.Is the knowledge sought through invasion of privacy relevant to its justifying purpose? 4.Is invasion of privacy the only or the least offensive means of obtaining the knowledge? 5.What restrictions or procedural restraints have been placed on the privacy-invading techniques? 6.How will the personal knowledge be protected once it has been acquired? 15

Understanding Business Ethics 2 nd Edition © 2014 SAGE Publications, Inc. Telephone Monitoring 1986 Electronic Communications Privacy Act allows monitoring of business related phone calls – If the phone call is personal in nature, the monitoring must cease, but if told that personal calls are prohibited, the calls can be monitored Cell phones create even further complications 16

Understanding Business Ethics 2 nd Edition © 2014 SAGE Publications, Inc. Privacy of Customers Companies are able to gather, store, match, and make more inferences about information because of greater technological advances – CheckPoint, Inc. settled charges with the Federal Trade Commission as a result of violating consumer privacy rights. CheckPoint paid a $10 million penalty to the government 17

Understanding Business Ethics 2 nd Edition © 2014 SAGE Publications, Inc. The Challenge of Technology Security transactions Illegal activity (fraud, hacking, etc) Privacy Honesty/truthfulness Judged by same standards as other mediums Pornography Product warranty Plagiarism Targeting children Unsolicited False advertising Ethical Issues Facing Internet Usage 18

Understanding Business Ethics 2 nd Edition © 2014 SAGE Publications, Inc. Guidelines When Dealing with the Information Security Compliance 1.Check information security controls each time the business changes 2.Design information systems to permit later auditing 3.Hold third-party service providers to high standards 4.Monitor personnel to prevent information misuse or loss 19

Understanding Business Ethics 2 nd Edition © 2014 SAGE Publications, Inc. Role of Government Regulations Sarbanes Oxley Act The World Intellectual Property Organization (Digital Millennium Copyright Act) The European Union’s Electronic Commerce Directive 20

Understanding Business Ethics 2 nd Edition © 2014 SAGE Publications, Inc. Internet Attacks Cyber terrorism – The use of computer technology to commit terrorism crimes Vulnerable industries include – Defense contractors, medical and health care companies, pharmaceutical companies, financial institutions Types of cyber terrorism – crimes, identify theft, viruses, and spyware 21

Understanding Business Ethics 2 nd Edition © 2014 SAGE Publications, Inc. The USA Patriot Act Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act – Provides expanded government authority over electronic communications and the use of computer and monetary transactions Designed to monitor the activities of financial institutions 22

Understanding Business Ethics 2 nd Edition © 2014 SAGE Publications, Inc. Questions for Thought 1.In the opening scenario, what are the ethical issues of collecting personal preferences on hotel guests? Should a hotel be able to transfer these personal preferences to other hotels in their chain? Are there unique problems with Hilton’s radio frequency identification program? 23

Understanding Business Ethics 2 nd Edition © 2014 SAGE Publications, Inc. Questions for Thought 2.Analyze the costs and benefits of using e- mail presented in Table 9.3. These pertain to an employer’s perspective. Prepare another table that presents the employee’s perspective. 3.How has control of the data collected by firms pertaining to customers changed over the years? What type of government regulations are in place to ensure the data does not go to unauthorized users? 24