Managing information systems 7th edition brow ch015

MANAGEMENT INFORMATION SYSTEMSCHAPTER 15 SOCIAL, ETHICAL AND LEGAL ISSUES... SOCIAL, ETHICAL AND LEGAL ISSUES• IT is influencing societies across the globe • Despite its benefits, there

MANAGEMENT INFORMATION SYSTEMS

CHAPTER 15

SOCIAL, ETHICAL AND LEGAL ISSUES

SOCIAL, ETHICAL AND LEGAL ISSUES

• IT is influencing societies across the globe

• Despite its benefits, there are also a number of negative social impacts, such as:

- Loss of personal privacy and identity theft

- Increased intellectual property violations

- E-mail spam

- Computer viruses and worms that destroy data on personal as well as corporate computers

THE LEGAL ENVIRONMENT

• Purpose of Legislation

- To constrain behavior within a society so that there is minimal harm to its members and its needs are met

- IT is evolving so rapidly that laws inevitably lag behind

- Both needs and harms also differ across nations

ETHICAL ISSUES

• IT is having a growing effect on our lives and can give rise to ethical issues

– Managers who determine how IT is used are also responsible for the ethical implications of their decisions

• Potential consequences of unethical behavior

– For an individual employee

- Loss of reputation

- Loss of employment or career

– For an organization

- Loss of reputation

IDENTIFYING ETHICAL PROBLEMS

– The first step is to recognize that a decision or action has ethical implications

– These questions can be used to identify potential ethical problems:

• Is this fair to everyone that will be affected?

• Would I want my mother to know about this?

• Would I care if everyone knew about this?

• What would be the result if everyone did this?

– IT-related ethical problems have the potential to impact many stakeholders

ANALYZING ETHICAL PROBLEMS

– There is no universally accepted way to determine whether an action is justified or unethical

– Many basic ethical principles have come from religious traditions and philosophers

– Ethical issues may also be viewed differently depending on culture

• Example: In some countries, bribery is not considered unethical

EXAMPLE: CODE OF ETHICS

Professional Association Example:

The IEEE-CS and ACM have jointly developed a comprehensive code of ethics for the software engineering

profession

ANALYZING ETHICAL PROBLEMS

– Ethical reasoning is seldom difficult, but some problems are so complex that the decision is not obvious

– In these complex situations, there are usually many alternative actions to consider

– In organizations: Managers should identify ethical problems and include all parties who are affected by the decision

Textbook definition of Privacy:

The ability to control access to information about ourselves

• An individual might give permission to collect and use certain personal information in exchange for some

benefit or business transaction

• Privacy is invaded when information is used in ways the individual never intended or explicitly agreed to

Why is Privacy a business issue?

• Personal information can be extremely valuable to marketers, and many companies spend significant funds on

obtaining it

• Credit cards, customer loyalty cards, warranty cards, and sweepstakes are all used to collect personal information

• U.S citizens differ widely in their attitude toward personal privacy On average, U.S surveys suggest that:

- 25% of individuals are not concerned with privacy issues

- 50% are willing to consider trading some personal privacy for other benefits

- 25% are quite sensitive to loss of privacy

E- COMMERCE PRIVACY CONCERNS

• The growth of IT, especially the Web, has increased the potential for Privacy violations

• One method of obtaining information about consumers is through the use of cookies

Cookies: A small file created by a Web browser that can identify the user to a particular Web site

• The effects of cookies on an individual’s Privacy can vary, depending on how they are used by companies

on the Internet

– For example, Amazon.com uses cookies to identify users and then deliver personalized content based on the user’s prior

purchases

E- COMMERCE PRIVACY CONCERNS

Example: ESPN.com cookie

DMSEG 2948220784574D0C&K03429&4459DBDF&4723 espn.go.com/

1024 2699591168 31381317 463312832 29912808

*

Variable Name

Value Host Name

Creation Date

Expiration Date

Flag

E- COMMERCE PRIVACY CONCERNS

• Cookies can also be used to develop more comprehensive profiles of an individual’s interests and

preferences

• DoubleClick: A company that builds user profiles

- Company places advertisements for business clients on thousands of Web sites

- First time a user visits any of these Web sites, a cookie is created by the Web browser

- The cookie will then identify the user on any subsequent visits to Web sites with DoubleClick advertising

- Through this mechanism, a detailed profile of browsing behavior and preferences can be compiled

WEB PORTAL PRIVACY CONCERNS

• Privacy concerns also increase when Web portals are involved:

- In 2001, privacy advocates raised concerns about the strategic alliance between DoubleClick and Abacus

Direct, a direct marketing company with information on 88 million households, because the deal would link the two companies’ databases

- In 2007, the purchase of DoubleClick by Google raised similar concerns over the merging of Google’s data on

individual’s Internet searches and DoubleClick’s data on the same individual, collected from specific web sites

- In 2006, three months of search queries by AOL members were available to the public

SOCIAL NETWORKING PRIVACY CONCERNS

Facebook

• Initial company policy was that information would be shared only within the user’s group of friends

However, over the years the company has changed its policy, sometimes without pre-warning its users

• Facebook generates revenues through advertisements, and the disclosure of personal information gives

advertisers a greater ability to target relevant users

SPYWARE CONCERNS

Spyware is one of the most rapidly growing types of software that covertly gathers a user’s personal information without

the user’s knowledge; this is also referred to as “social engineering.”

- Spyware is usually hidden inside of other programs, such as screensavers and file sharing software

- Sometimes hidden software to reduce copyright violations and “piracy” of a major company’s products can “backfire”

SONY spyware gone wrong

WORKPLACE PRIVACY

• Outside of the financial industry, there are no laws in the U.S regulating the collection and sharing of

personal data

• Many organizations now post privacy policies, but even these do not always explain how an individual’s

personal information is used

– Since corporations have the right to view employee email messages, employees should assume that their email messages are not private

• Managers should note that actions that employees perceive to violate their personal privacy can result in

negative views of the company

U.S PRIVACY LAWS

– The Fair Credit Reporting Act

- Regulates disclosure of credit application data and credit histories– The Privacy Act

- Restricts a government agency from gathering information for one purpose and using it for another or sharing it with another agency

– The Family Education Rights and Privacy Act

- Protects the privacy of students by restricting access to their grade and disciplinary information– The Electronic Communications Privacy Act

- Prohibits unauthorized access to e-mail

U.S PRIVACY LAWS

– The Video Protection Privacy Act

- Prohibits videotape service providers from disclosing information about video rentals

– The Driver’s Privacy Protection Act

- Prohibits states from selling driver’s license information

– The Health Insurance Portability and Accountability Act

- HIPAA protects an individual’s personal health information from unauthorized disclosure

– The Children’s Online Privacy Protection Act

- Prohibits collecting information from children under the age of 13 unless their parents authorize it

– Gramm-Leach-Bliley Act

- Provides some privacy protections against the sale of financial information

PRIVACY LAWS

• The U.S position on Privacy differs from the European position; these differences need to be recognized by

organizations when data is transferred across European borders

IDENTITY THEFT

• Resolving the effects of identity theft takes 30-40 hours on average, but can also take months or

years

• In 2009, 11.1 million U.S adults were affected by Identity Theft, an increase of 12% over 2008

– Total fraud amount increased by 12.5% to 54 billion

Identity Theft

“Someone appropriating your personal information without your knowledge to commit fraud or theft” - FTC

PREVENTING IDENTITY THEFT

– Protect your national ID numbers (U.S Social Security Number)

- Do not reveal it to anyone unless you know that it is necessary

- Do not carry your Social Security card or number in your wallet

– Protect your credit cards

- Carry as few cards as possible

- Keep them in sight when being handled by others

– Protect your computer by using a firewall and installing antivirus and antispyware software

– Do not throw bills & credit card offers into the trash; shred them instead

– Check your credit card bills and bank statements carefully

INTELLECTUAL PROPERTY RIGHTS

• The key difference between intellectual and physical property is that the product

can be shared without the owner losing it

• What can be “owned” differs from society to society, but many nations recognize

Intellectual Property (IP)

Any product of the human mind, such as an idea, an invention, a literary creation, a work of art, a business

method, an industrial process, a chemical formula, a computer program, or a presentation

INTELLECTUAL PROPERTY RIGHTS

• IP laws typically grant ownership rights for a limited time under the belief that IP should eventually be in the public

domain:

Copyrights: Give the owner control over the duplication of copyrighted intellectual property

Patents: Give the owner the exclusive right to the manufacture and use of a new design or method

• However, IP laws were developed with tangible products in mind:

Since IT separates the content from the medium that contains it, new laws are required, but legislation lags behind the technology.

SOFTWARE COPYRIGHTS

• U.S Copyright laws make it illegal to copy and use software without the software vendor’s permission

• For most software, the copyright owners do not sell the software itself, but only the right to use under certain

specified conditions

• When that right is violated, the copyright has been violated

SOFTWARE PIRACY

– In 2009, an estimated 43% of installed software worldwide was pirated, which cost the software industry an

estimated $ 51 billion

– Software piracy rates vary by country and region

• In some developing countries, governments do not monitor software piracy– In 2009, countries with >80% software piracy included Armenia, Vietnam, Venezuela, Pakistan, and Indonesia; China decreased its piracy rate, but that year it was estimated to be 79%

DIGITAL ENTERTAINMENT PIRACY

– Piracy of music and videos is growing internationally

– CD piracy rates vary widely across countries

- U.S., Japan, and Western Europe have the lowest piracy rates

- Indonesia and Paraguay have the highest piracy rates (>90%)

– The International Federation of the Phonographic Industry (IFPI) represents the international recording industry against piracy

• Despite iTunes and other music download services for a low fee, estimates are that 95% of music is pirated (IFPI, 2009)

DIGITAL ENTERTAINMENT PIRACY

• In the U.S the Recording Industry Association of America (RIAA) and then the Motion Picture Association of

America (MPAA) launched legal and marketing efforts designed to stop the piracy of music and movies

• Music and file sharing gained widespread popularity with the advent of Napster that enabled file sharing through a

peer-to-peer (P2P) network with a centralized index

- In 2003, the RIAA began filing lawsuits against individuals who were file sharing on P2P networks; Napster was sued, shut down, and then changed its business model to a legal subscription provider

- Some recent lawsuits have been controversial because the plaintiffs have included children and people without computers

RIAA advertisement MPAA advertisement

RIAA advertisement MPAA advertisement

OTHER SOCIAL ISSUES

- IT has become so essential to modern economic activity that those who do not have access are precluded from some economic benefits

- Internet access in Africa, Latin America, and Middle East grew about 1000% between 2000 and 2010

- The gap is also diminishing in developed countries like the U.S

OTHER SOCIAL ISSUES

- Maintaining accuracy is costly and time consuming

Who should pay for the impacts of data inaccuracies?

- Global outsourcing of knowledge work is enabled by IT

Are workers merely one factor of production or are they worthy of

further consideration because they are citizens of a specific country?

THE FUTURE

• Computers will continue to get faster, more powerful and less costly

What will individuals and organizations do with all the increased IT power that will be available for less and less money?

• Expert systems, neural networks and artificial intelligence are still evolving as substitutes for human brainpower

To what extent will human lives be improved?

To what extent will there be unintended negative consequences?