Chapter 4

Ethical and Social

Issues in Information
Systems
 Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems

LEARNING OBJECTIVES

• Analyze the relationships 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.
 Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems

Does Location Tracking Threaten Privacy?

• Problem: New opportunities from new technology and

need for greater security.
• Solutions: Redesigning business processes and
products to support location monitoring increases sales
and security.
• Deploying GPS and RFID tracking devices with a location
tracking database enables location monitoring.
• Demonstrates IT’s role in creating new opportunities for
improved business performance
• Illustrates how technology can be a double-edged sword
by providing benefits such as increased sales and
security while compromising privacy.
 Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems

Understanding Ethical and Social Issues Related to Systems

• Past five years: One of the most ethically challenged

periods in U.S. history
• Lapses in management ethical and business judgment
in a broad spectrum of industries
• Enron, WorldCom, Merrill Lynch, KMPG, etc.
• Sub-prime loans and the failure of risk analysis:
CitiBank and Societe General
• Information systems instrumental in many recent frauds
• Stiffer sentencing guidelines, obstruction charges
against firms, mean individual managers must take
greater responsibility regarding ethical and legal
conduct
 Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems

Understanding Ethical and Social Issues Related to Systems

• Ethics
• Principles of right and wrong that individuals, acting as
free moral agents, use to make choices to guide their
behavior
• Information systems and ethics
• Information systems raise new ethical questions
because they create opportunities for:
• Intense social change, threatening existing
distributions of power, money, rights, and obligations
• New kinds of crime
 Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems

Understanding Ethical and Social Issues Related to Systems

• A model for thinking about ethical, social, and political

issues
• Society as a calm pond
• IT as a rock dropped in pond, creating ripples of new
situations not covered by old rules
• Social and political institutions cannot respond
overnight to these ripples—it may take years to develop
etiquette, expectations, laws
• Requires understanding of ethics to make choices in
legally gray areas
 Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems

Understanding Ethical and Social Issues Related to Systems

The Relationship Between Ethical, Social, and

Political Issues in an Information Society

The introduction of new

information technology has a ripple
effect, raising new ethical, social,
and political issues that must be
dealt with on the individual, social,
and political levels. These issues
have five moral dimensions:
information rights and obligations,
property rights and obligations,
system quality, quality of life, and
accountability and control. Figure 4-1
 Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems

Understanding Ethical and Social Issues Related to Systems

• Five moral dimensions of information age

• Major issues raised by information systems
include:
• Information rights and obligations
• Property rights and obligations
• Accountability and control
• System quality
• Quality of life
 Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems

Understanding Ethical and Social Issues Related to Systems

• Four key technology trends that raise ethical

issues
• Computing power doubles every 18 months
• Increased reliance on, and vulnerability to, computer systems
• Data storage costs rapidly declining
• Multiplying databases on individuals
• Data analysis advances
• Greater ability to find detailed personal information on individuals
• Profiling and nonobvious relationship awareness (NORA)
• Networking advances and the Internet
• Enables moving and accessing large quantities of personal data
 Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems

Understanding Ethical and Social Issues Related to Systems

Nonobvious Relationship Awareness (NORA)

NORA technology can take

information about people
from disparate sources and
find obscure, nonobvious
relationships. It might
discover, for example, that an
applicant for a job at a casino
shares a telephone number
with a known criminal and
issue an alert to the hiring
manager. Figure 4-2
 Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems

Understanding Ethical and Social Issues Related to Systems

Data for Sale

• Read the Interactive Session: Management, and then
discuss the following questions:
• Do data brokers pose an ethical dilemma? Explain your
answer.
• What are the problems caused by the proliferation of data
brokers? What management, organization, and technology
factors are responsible for these problems?
• How effective are existing solutions to these problems?
• Should the U.S. federal government regulate private data
brokers? Why or why not? What are the advantages and
disadvantages?
 Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems

Ethics in an Information Society

• Basic concepts form the underpinning of an ethical

analysis of information systems and those who
manage them
• 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 Information Systems

Ethics in an Information Society

• Ethical analysis: A five-step process

1. Identify and clearly describe the facts
2. Define the conflict or dilemma and identify the higher-
order values involved
3. Identify the stakeholders
4. Identify the options that you can reasonably take
5. Identify the potential consequences of your options
 Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems

Ethics in an Information Society

• Candidate Ethical Principles

• Golden Rule
• Do unto others as you would have them do unto you
• Immanuel Kant’s Categorical Imperative
• If an action is not right for everyone to take, it is not right for
anyone
• Descartes' rule of change
• If an action cannot be taken repeatedly, it is not right to take
at all
 Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems

Ethics in an Information Society

• Candidate Ethical Principles (cont.)

• Utilitarian Principle
• Take the action that achieves the higher or greater value
• Risk Aversion Principle
• Take the action that produces the least harm or least potential
cost
• Ethical “no free lunch” rule
• Assume that virtually all tangible and intangible objects are
owned by someone unless there is a specific declaration
otherwise
 Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems

Ethics in an Information Society

• Professional codes of conduct

• Promulgated by associations of professionals
• E.g. AMA, ABA, AITP, ACM
• Promises by professions to regulate themselves in the
general interest of society
• Real-world ethical dilemmas
• One set of interests pitted against another
• E.g. Right of company to maximize productivity of
workers vs. workers right to use Internet for short
personal tasks
 Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems

The Moral Dimensions of Information Systems

SurfControl offers tools for tracking Web and e-mail activity and for filtering unauthorized e-mail and Web
site content. The benefits of monitoring employee e-mail and Internet use should be balanced with the
need to respect employee privacy.
 Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems

The Moral Dimensions of Information Systems

• Information rights and obligations

• 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
• In U.S., privacy protected by:
• First Amendment (freedom of speech)
• Fourth Amendment (unreasonable search and seizure)
• Additional federal statues
• Privacy Act of 1974
 Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems

The Moral Dimensions of Information Systems

• Fair information practices:

• Set of principles governing the collection and use of information
• Basis of most U.S. and European privacy laws
• Based on mutuality of interest between record holder and
individual
• Restated and extended by FTC in 1998 to provide guidelines for
protecting online privacy
• Used to drive changes in privacy legislation
• COPPA
• Gramm-Leach-Bliley Act
• HIPAA
 Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems

The Moral Dimensions of Information Systems

• FTC FIP principles:

• Notice/awareness (core principle): Web sites must disclose
practices before collecting data
• Choice/consent (core principle): Consumers must be able to
choose how information is used for secondary purposes
• Access/participation: Consumers must be able to review,
contest accuracy of personal data
• Security: Data collectors must take steps to ensure accuracy, security
of personal data
• Enforcement: Must be mechanism to enforce FIP principles
 Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems

The Moral Dimensions of Information Systems

• European Directive on Data Protection:

• Requires companies to inform people when they
collect information about them and disclose how it will
be stored and used.
• Requires informed consent of customer (not true in
the U.S.)
• EU member nations cannot transfer personal data to
countries without similar privacy protection (e.g. U.S.)
• U.S. businesses use safe harbor framework
• Self-regulating policy and enforcement that meets objectives
of government legislation but does not involve government
regulation or enforcement.
 Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems

The Moral Dimensions of Information Systems

• Internet Challenges to Privacy:

• Cookies
• Tiny files downloaded by Web site to visitor’s hard drive
• Identify visitor’s browser and track visits to site
• Allow Web sites to develop profiles on visitors
• Web bugs
• Tiny graphics embedded in e-mail messages and Web pages
• Designed to monitor who is reading a message and transmitting that
information to another computer on the Internet
• Spyware
• Surreptitiously installed on user’s computer
• May transmit user’s keystrokes or display unwanted ads
 Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems

The Moral Dimensions of Information Systems

How Cookies Identify Web Visitors

Cookies are written by a Web site on a visitor’s hard drive. When the visitor returns to that Web site, the Web server
requests the ID number from the cookie and uses it to access the data stored by that server on that visitor. The Web
site can then use these data to display personalized information.

Figure 4-3
 Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems

The Moral Dimensions of Information Systems

• U.S. allows businesses to gather transaction information

and use this for other marketing purposes
• Online industry promotes self-regulation over privacy
legislation
• Self regulation has proven highly variable
• Statements of information use are quite different
• Some firms offer opt-out selection boxes
• Online “seals” of privacy principles
• Most Web sites do not have any privacy policies
• Many online privacy policies do not protect customer
privacy, but rather protect the firm from law suits
 Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems

The Moral Dimensions of Information Systems

Web sites are posting their privacy policies for visitors to review. The TRUSTe seal designates Web sites
that have agreed to adhere to TRUSTe’s established privacy principles of disclosure, choice, access, and
security.
 Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems

The Moral Dimensions of Information Systems

• Technical solutions
• The Platform for Privacy Preferences (P3P)
• Allows Web sites to communicate privacy policies to
visitor’s Web browser – user
• User specifies privacy levels desired in browser settings
• E.g. “medium” level accepts cookies from first-party host
sites that have opt-in or opt-out policies but rejects third-
party cookies that use personally identifiable information
without an opt-in policy.
 Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems

The Moral Dimensions of Information Systems

The P3P Standard

P3P enables Web sites to translate their privacy policies into a standard format that can be read by the user’s Web
browser software. The user’s Web browser software evaluates the Web site’s privacy policy to determine whether it is
compatible with the user’s privacy preferences.

Figure 4-4
 Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems

The Moral Dimensions of Information Systems

• Property Rights: Intellectual Property

• Intellectual property: Intangible property of any kind
created by individuals or corporations
• Three ways that intellectual property is protected
• Trade secret: Intellectual work or product belonging to
business, not in the public domain
• Copyright: Statutory grant protecting intellectual property
from being copied for the life of the author, plus 70 years
• Patents: Grants creator of invention an exclusive monopoly
on ideas behind invention for 20 years
 Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems

The Moral Dimensions of Information Systems

• Challenges to Intellectual Property Rights

• Digital media different from physical media (e.g.
books)
• Ease of replication
• Ease of transmission (networks, Internet)
• Difficulty in classifying software
• Compactness
• Difficulties in establishing uniqueness
• Digital Millenium Copyright Act (DMCA)
• Makes it illegal to circumvent technology-based
protections of copyrighted materials
 Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems

The Moral Dimensions of Information Systems

• Accountability, Liability, Control

• Computer-related liability problems
• If software fails, who is responsible?
• If seen as a part of a machine that injures or harms,
software producer and operator may be liable
• If seen as similar to a book, difficult to hold software
author/publisher responsible
• What should liability be if software is seen as service?
Would this be similar to telephone systems not being liable
for transmitted messages (so-called “common carriers”)
 Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems

The Moral Dimensions of Information Systems

• System Quality: Data Quality and System

Errors
• What is an acceptable, technologically feasible level of
system quality?
• Flawless software is economically unfeasible
• Three principal sources of poor system performance:
• Software bugs, errors
• Hardware or facility failures
• Poor input data quality (most common source of business
system failure)
 Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems

The Moral Dimensions of Information Systems

• Quality of Life: Negative social consequences of

systems
• Balancing power: Although computing power is decentralizing,
key decision-making power remains centralized
• Rapidity of change: Businesses may not have enough time to
respond to global competition
• Maintaining boundaries: Computing and Internet use lengthens
the work-day, infringes on family, personal time
• Dependence and vulnerability: Public and private organizations
ever more dependent on computer systems
 Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems

The Moral Dimensions of Information Systems

The Internet: Friend or Foe to Children?

• Read the Interactive Session: Organizations, and then

discuss the following questions:
• Does the use of the Internet by children and teenagers pose
an ethical dilemma? Why or why not?
• Should parents restrict use of the Internet by children or
teenagers? Why or why not?
 Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems

The Moral Dimensions of Information Systems

• Computer crime and abuse

• Computer crime: Commission of illegal acts through use of
compute or against a computer system – computer may be
object or instrument of crime
• Computer abuse: Unethical acts, not illegal
• Spam: High costs for businesses in dealing with spam
• Employment: Reengineering work resulting in lost
jobs
• Equity and access – the digital divide: Certain
ethnic and income groups in the United States less
likely to have computers or Internet access
 Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems

The Moral Dimensions of Information Systems

The Spamming Problem

This figure shows the major types of products and services hawked through spam e-mail
messages and the industries that receive the most spam.

Figure 4-5
 Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems

The Moral Dimensions of Information Systems

Spam consists of unsolicited e-mail

messages, which can be
bothersome, offensive, and even a
drain on office worker productivity.
Spam filtering software such as
McAfee’s SpamKiller blocks
suspicious e-mail.
 Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems

The Moral Dimensions of Information Systems

• Health risks:
• Repetitive stress injury (RSI)
• Largest source is computer keyboards
• Carpal Tunnel Syndrome (CTS)
• Computer vision syndrome (CVS)
• Technostress
• Role of radiation, screen emissions, low-level
electromagnetic fields