Week 5: Ethical and Social Issues in Information Systems

Management Information Systems
MANAGING THE DIGITAL FIRM, 12TH EDITION
Week 5
Chapter 4
ETHICAL AND SOCIAL
ISSUES IN INFORMATION
SYSTEMS

CHAPTER 4: ETHICAL AND SOCIAL ISSUES IN
INFORMATION SYSTEMS
Learning Objectives
What ethical, social, and political issues

are raised by information systems?
What specific principles for conduct can
be used to guide ethical decisions?
Why do contemporary information
systems technology and the Internet pose
challenges to the protection of individual
privacy and intellectual property?
How have information systems affected
everyday life?
2

INFORMATION SYSTEMS
Behavioral Targeting and Your Privacy: Youre the Target
Problem: Need to efficiently target online ads

Solutions: Behavioral targeting allows
businesses and organizations to more
precisely target desired demographics
Google monitors user activity on thousands of
sites; businesses monitor own sites to
understand customers
Demonstrates ITs role in organizing and
distributing information
Illustrates the ethical questions inherent in
online information gathering
3

Behavioral Targeting and Your Privacy: Youre the Target
The technology used to implement online tracking is

a combination of cookies, Flash cookies, and Web
beacons (also called Web bugs).
Web beacons are small programs placed on your computer
when you visit any of thousands of Web sites. They report
back to servers operated by the beacon owners the
domains and Web pages you visited, what ads you clicked
on, and other online behaviors.
These tools can be used to identify your
personal interests and behaviors
precisely so that the targeted ads can
be shown to you.
Google alone accounts for 20% of
all Web bugs.
4

INFORMATION SYSTEMS
Understanding Ethical and Social Issues Related to Systems
The growing use of behavioral targeting

techniques shows that technology can be a
double-edged sword.
It can be the source of many benefits (by
showing you ads relevant to your interests) but it
can also create new opportunities for invading
your privacy, and enabling the reckless use of
that information in a variety of decisions about
you.

INFORMATION SYSTEMS
Ethics
Principles of right and wrong that
individuals, acting as free moral agents,
use to make choices to guide their
behaviors
Recent cases of failed ethical judgment

in business
Lehman Brothers, Minerals Management
Service, Pfizer
In many, information systems used to
bury decisions from public scrutiny
7

INFORMATION SYSTEMS
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

INFORMATION SYSTEMS
Model for thinking about ethical, social,

political issues:
Society as a calm pond
IT as rock dropped in pond, creating ripples
of new situations not covered by old rules
Social and political institutions cannot
respond overnight to these ripplesit may
take years to develop etiquette,
expectations, laws
Requires understanding of ethics to make choices
in legally gray areas
10

INFORMATION 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
11

INFORMATION SYSTEMS
Five moral dimensions of the information age

1. Information rights and obligations
What information rights do individuals and
organizations possess with respect to
themselves? What can they protect?
2. Property rights and obligations
How will traditional intellectual property rights
be protected in a digital society in which tracing
and accounting for ownership are difficult and
ignoring such property rights is so easy?
3. Accountability and control
Who can and will be held accountable and liable
for the harm done to individual, collective
information and property rights?
12

INFORMATION SYSTEMS
Five moral dimensions of the

information age
4. System quality
What standards of data and system quality
should we demand to protect individual rights
and the safety of society?
5. Quality of life
What values should be preserved in an
information and knowledge-based society? Which
institutions should we protect from violation?
Which cultural values and practices are
supported by the new information technology?
13

INFORMATION SYSTEMS
Key technology trends that raise ethical

issues
1. Doubling of computer power (18 months)
More organizations depend on computer systems
for critical operations resulting our dependence
on systems and our vulnerability to system
errors and poor data quality have increased.
Social rules and laws have not yet adjusted to
this dependence.
Standards for ensuring the accuracy and
reliability of information systems are not
universally accepted or enforced.
14

INFORMATION SYSTEMS
Key technology trends that raise ethical

issues
2. Rapidly declining data storage costs are
Responsible for the multiplying databases on
individuals, employees, customers, and potential
customers maintained by private and public
organizations.
These advances are responsible for routine violation
of individual privacy both cheap and effective.
3. Networking advances and the Internet

Copying data from one location to another and
accessing personal data from remote locations is
much easier
15

INFORMATION SYSTEMS
Key technology trends that raise ethical issues

(cont.)
4. Advances in data analysis techniques
Companies can analyze vast quantities of data
gathered on individuals for:
Profiling
Combining data from multiple sources to create
dossiers of detailed information on individuals e.g.
credit card purchases, telephone calls, magazine
subscriptions, video rentals, banking records and
visits to Web sites etc.
This information could reveal not only your credit
information but also your driving habits, your tastes,
your associations, and your political interests.
16

INFORMATION SYSTEMS
Key technology trends that raise ethical issues

(cont.)
4. Advances in data analysis techniques
Nonobvious relationship awareness

(NORA)
Given both the government and the private sector
even more powerful profiling capabilities by
combining data from multiple sources to find
obscure hidden connections that might help
identify criminals or terrorists.
The technology is considered a valuable tool for
homeland security but does have privacy
implications
17

INFORMATION 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
18

INFORMATION SYSTEMS
Ethics in an Information Society
Basic concepts for ethical analysis

Responsibility:
Accepting the potential costs, duties, and obligations for

decisions
Accountability:
Mechanisms for identifying responsible parties for any

pros and cons
Liability:
Concept of responsibility that permits individuals (and

firms) to recover damages done to them by other actors
Due process:
feature of law-governed societies and is a process in

which Laws are well known and understood, with an
ability to appeal to higher authorities for application of
law
19

INFORMATION SYSTEMS
Ethical analysis: A five-step process

1. Identify and clearly describe
facts to find out who did what to whom, and where,
when, and how.
2. Define the conflict or dilemma and

identify the higher-order values
involved
Ethical, social, and political issues always reference
higher values. The parties to a dispute all claim to
be pursuing higher values (e.g., freedom, privacy,
protection
of property, and the free enterprise system).
20

INFORMATION SYSTEMS
Ethical analysis: A five-step process

3. Identify the stakeholders
who have an interest in the outcome, who have invested in
the situation, and usually who have vocal opinions. Find out
the identity of these groups and what they want. This will be
useful later when designing a solution.
4. Identify the options that you can reasonably

take
Sometimes arriving at a good or ethical solution may not
always be a balancing of consequences to stakeholders.
5. Identify the potential consequences of your

options
Some options may be ethically correct but disastrous from
other points of view. Other options may work in one
instance but not in other similar instances.
21

INFORMATION SYSTEMS
Six Candidate Ethical Principles

1. Golden Rule
Putting yourself into the place of others and
thinking of yourself as the object of the decision, it
can help you think about fairness in decision
making.
2. Immanuel Kants Categorical Imperative

If an action is not right for everyone to take, it is
not right for anyone. Ask yourself, If everyone did
this, could the organization or society survive?
3. Descartes Rule of Change

If an action cannot be taken repeatedly, it is not
right to take at all. once started down a slippery
path, you may not be able to stop.
22

INFORMATION SYSTEMS
4. Utilitarian Principle
Take the action that achieves the higher or greater value.
This rule assumes you can prioritize values in a rank
order and understand the consequences of various
courses of action.
5. Risk Aversion Principle
Take the action that produces the least harm or least
potential cost (e.g., building a nuclear generating facility
in an urban area have extremely high failure cost)
6. Ethical no free lunch Rule
Assume that virtually all tangible and intangible objects
are owned by someone unless there is a specific
declaration otherwise. If something someone else has
created is useful to you, it has value, and you should
assume the creator wants compensation for this work.
23

INFORMATION SYSTEMS
Professional codes of conduct

Promulgated by associations of professionals
E.g. American Medical Association (AMA), the American
Bar Association, (ABA), the Association of Information
Technology Professionals (AITP), and the Association for
Computing Machinery (ACM)
Codes of ethics are 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. Internet
monitoring in an organization
Right of company to maximize productivity of workers
vs. workers right to use Internet for short personal tasks
24

INFORMATION SYSTEMS
The Moral Dimensions of Information Systems
Privacy:
Claim of individuals to be left alone, free from
surveillance or interference from other individuals,
organizations, or state. Claim to be able to control
information about yourself
In U.S., privacy protected by:

First Amendment (freedom of speech and association)
Fourth Amendment (unreasonable search and seizure
of ones personal documents or home, and the
guarantee of due process.)
Additional federal statues (e.g. Privacy Act of 1974,
regulating the federal governments collection, use,
and disclosure of information.)
25

INFORMATION SYSTEMS
Fair information practices:

It is a 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
26

INFORMATION SYSTEMS
Fair information practices:

Used to drive changes in privacy legislation
COPPA - Childrens Online Privacy Protection Act,
requiring Web sites to obtain parental permission before
collecting information on children under the age of 13.
Gramm-Leach-Bliley Act - All financial institutions are
required to disclose their policies and practices for
protecting the privacy of nonpublic personal information and
to allow customers to opt out of information-sharing
arrangements with nonaffiliated third parties.
HIPAA - Health Insurance Portability and
Accountability Act provides privacy protection for medical
records. Doctors, hospitals, and other health care providers
must limit the disclosure of personal information about
patients to the minimum amount necessary to achieve a
given purpose.
27

INFORMATION SYSTEMS
FTC (Federal Trade Commission) FIP (Fair Information

Practices) principles:
1.Notice/awareness (core principle)
Web sites must disclose their information practices
before collecting data. Includes identification of collector;
uses of data; other recipients of data; nature of collection
(active/inactive); voluntary or required status;
consequences of refusal; and steps taken to protect
confidentiality, integrity, and quality of the data.
2.Choice/consent (core principle)
There must be a choice regime in place allowing
consumers to choose how their information will be used
for secondary purposes other than supporting the
transaction, including internal use and transfer to third
parties.
28

INFORMATION SYSTEMS
FTC FIP principles:

3. Access/participation
Consumers should be able to review and contest the
accuracy and completeness of data collected about
them in a timely, inexpensive process.
4. Security
Data collectors must take responsible steps to assure
that consumer information is accurate and secure from
unauthorized use
5. Enforcement
There must be in place a mechanism to enforce FIP
principles. This can involve self-regulation, legislation
giving consumers legal remedies for violations, or
federal statutes and regulations
29

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 (can be
defined as consent given with knowledge of all the facts
needed to make a rational decision)
EU member nations cannot transfer personal

data to countries with no similar privacy
protection (e.g. U.S.)
U.S. businesses use safe harbor framework
A private Self-regulating policy to meet objectives of
government legislation. U.S. businesses would be
allowed to use personal data from EU countries if they
develop privacy protection policies that meet EU
standards.
30

INFORMATION SYSTEMS
Internet Challenges to Privacy:

Cookies
Tiny files downloaded by Web site to visitors hard drive to help

identify visitors browser and track visits to site
Allow Web sites to develop complete profiles on visitors (If
registered)
Web beacons/bugs
Tiny graphics embedded in e-mail and Web pages to monitor who

is reading message (IP address). Usually placed by third parties by
paying a fee. 25-30 beacons on popular websites.
Spyware
Secretly installed on users computer

May transmit users keystrokes and other movements on the
intrnet.
Displays banners and other unsolicited material
Googles collection of private data; behavioral

targeting (75 % users use google and it has enormous
impact on online privacy)
31

INFORMATION SYSTEMS
HOW COOKIES IDENTIFY WEB VISITORS
Cookies are written by a Web site on a visitors 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
32

INFORMATION SYSTEMS
U.S. allows businesses to gather transaction information
and use this for other marketing purposes without obtaining

the informed consent of the individual whose information is
being used
Online industry promotes self-regulation over

privacy legislation - In 1998, the online industry formed
the Online Privacy Alliance to encourage self-regulation to
develop a set of privacy guidelines for its members.
However, extent of responsibility taken varies
Statements of how information will be used

Opt-out selection boxes. Network Advertising Initiative (NAI)
Online seals of privacy principles - adhering to certain
privacy principles (certified websites TRUSTe)
Most Web sites do not have any privacy policies

33

INFORMATION SYSTEMS
Technical solutions
The Platform for Privacy Preferences Project
(P3P)
It is a protocol that automatically allows Web sites
to communicate privacy policies to visitors Web
browser user
User specifies privacy levels desired in browser
settings
E.g. medium level accepts cookies from firstparty 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
34

INFORMATION SYSTEMS
THE P3P STANDARD
FIGURE 4-4
35
P3P enables Web sites to translate their privacy policies into a standard format that can be
read by the users Web browser software. The browser software evaluates the Web sites
privacy policy to determine whether it is compatible with the users privacy preferences.

INFORMATION SYSTEMS
Property rights: Intellectual property

Intellectual property: Intangible property of
any kind created by individuals or corporations
Three main ways that protect intellectual
property
1. Trade secret: Intellectual work formula, pattern,
compilation of data or product belonging to business,
not in the public domain. Trade secret law protects
the actual ideas in a work product, not only their
manifestation
2. Copyright: Statutory grant protecting intellectual
property from being copied for the life of the author,
plus 70 years after the death of the creator.
3. Patents: Grants creator of invention an exclusive
monopoly on ideas behind invention for 20 years
36

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 and Difficulties in establishing uniqueness
Digital Millennium Copyright Act (DMCA)

Makes it illegal to bypass technology-based protections of
copyrighted materials. ISPs are required to take down such
sites
Microsoft and other major software and information content
firms are represented by the Software and Information
Industry Association (SIIA) witch runs an anti piracy hotline
to report piracy activities and offer educational programs to
combat software piracy
37

INFORMATION SYSTEMS
Accountability, Liability, Control

Computer-related liability problems
If software fails, who is responsible?
If seen as part of machine that injures or harms,
software producer and operator may be liable
If seen as similar to book, difficult to hold
author/publisher responsible
What should liability be if software seen as service?
Would this be similar to telephone systems not being
liable for transmitted messages?
liability law would extend its reach to include software
even when the software merely provides an
information service.
38

INFORMATION SYSTEMS
System Quality: Data Quality and System

Errors
What is an acceptable, technologically feasible level

of system quality?
Flawless software is economically unfeasible.
some system errors are foreseeable and correctable
only at very great expense
An expense so great that pursuing this level of
perfection is not feasible economicallyno one could
afford the product.
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)
39

INFORMATION SYSTEMS
Quality of life: Equity, access, and

boundaries
Negative social consequences of systems
Balancing power: Although computing power

decentralizing, Lower-level employees may be
empowered to make minor decisions, key decisionmaking remains centralized
Rapidity of change: Businesses may not have
enough time to respond to global competition,
reduced response time to competetion.
Maintaining boundaries: Computing, Internet use
lengthens work-day, infringes on family, personal
time
Dependence and vulnerability: Public and private
organizations ever more dependent on computer
systems and are, therefore, highly vulnerable if these
systems fail
40

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, may not illegal
Spam: High costs for businesses in dealing with spam
Market products not widely approved in most civilized societies.
Employment:
Reengineering work resulting in lost jobs (skilled

workers)
redesigning business processes could potentially
cause millions of mid-level managers and clerical
workers to lose their jobs.
Equity and access the digital divide:
Certain ethnic and income groups in the world less

likely to have computers or Internet access
41

INFORMATION SYSTEMS
Health risks:
Repetitive stress injury (RSI)
Largest source is computer keyboards (repetitive
actions)
Carpal Tunnel Syndrome (CTS) pressure on the
median nerve through the wrists bony structure
Computer vision syndrome (CVS) eye strain
Technostress stress - Induced by computer use.
Symptoms include aggravation, hostility toward
humans, impatience, and fatigue.
Role of radiation, screen emissions, low-level
electromagnetic fields and have unknown effects
on enzymes, molecules, chromosomes, and cell
membranes.
42

INFORMATION SYSTEMS

THE PERILS OF TEXTING
Read the Interactive Session and discuss the following questions
Which of the five moral dimensions of

information systems identified in this
text is involved in this case?
What are the ethical, social, and political
issues raised by this case?
Which of the ethical principles described
in the text are useful for decision making
about texting while driving?
43

INFORMATION SYSTEMS

TOO MUCH TECHNOLOGY?
Read the Interactive Session and discuss the following questions
What are some of the arguments for and against

the use of digital media?
How might the brain be affected by constant
digital media usage?
Do you think these arguments outweigh the
positives of digital media usage? Why or why
not?
What additional concerns are there for children
using digital media? Should children under 8 use
computers and cell phones? Why or why not?
44

Week 5: Ethical and Social Issues in Information Systems

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Management Information Systems

MANAGING THE DIGITAL FIRM, 12TH EDITION

Management Information Systems

What ethical, social, and political issues

Management Information Systems

Behavioral Targeting and Your Privacy: Youre the Target

Problem: Need to efficiently target online ads

Management Information Systems

The technology used to implement online tracking is

Management Information Systems

Understanding Ethical and Social Issues Related to Systems

The growing use of behavioral targeting

Management Information Systems

Management Information Systems

Understanding Ethical and Social Issues Related to Systems

Recent cases of failed ethical judgment

Management Information Systems

Management Information Systems

Understanding Ethical and Social Issues Related to Systems

Information systems and ethics

Management Information Systems

Understanding Ethical and Social Issues Related to Systems

Model for thinking about ethical, social,

Management Information Systems

Understanding Ethical and Social Issues Related to Systems

The introduction of new

Management Information Systems

Understanding Ethical and Social Issues Related to Systems

Five moral dimensions of the information age

Management Information Systems

Understanding Ethical and Social Issues Related to Systems

Five moral dimensions of the

Management Information Systems

Understanding Ethical and Social Issues Related to Systems

Key technology trends that raise ethical

Management Information Systems

Understanding Ethical and Social Issues Related to Systems

Key technology trends that raise ethical

3. Networking advances and the Internet

Management Information Systems

Understanding Ethical and Social Issues Related to Systems

Key technology trends that raise ethical issues

Management Information Systems

Understanding Ethical and Social Issues Related to Systems

Key technology trends that raise ethical issues

Nonobvious relationship awareness

Management Information Systems

Understanding Ethical and Social Issues Related to Systems

Management Information Systems

Ethics in an Information Society

Basic concepts for ethical analysis

Accepting the potential costs, duties, and obligations for

Mechanisms for identifying responsible parties for any

Concept of responsibility that permits individuals (and

feature of law-governed societies and is a process in

Management Information Systems

Ethics in an Information Society

Ethical analysis: A five-step process

2. Define the conflict or dilemma and

Management Information Systems

Ethical analysis: A five-step process

4. Identify the options that you can reasonably

5. Identify the potential consequences of your