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Copyright © 2018 Pearson Education Ltd.

Management Information Systems:

Managing the Digital Firm
Fifteenth edition

Chapter 4
Ethical and Social Issues
in Information Systems

Copyright © 2018 Pearson Education Ltd.

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Learning Objectives
• 4-1 What ethical, social, and political issues are raised by
information systems?
• 4-2 What specific principles for conduct can be used to
guide ethical decisions?
• 4-3 Why do contemporary information systems technology
and the Internet pose challenges to the protection of
individual privacy and intellectual property?
• 4-4 How have information systems affected laws for
establishing accountability, liability, and the quality of
everyday life?

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What Ethical, Social, and Political Issues

Are Raised by Information Systems? (1 of 2)
• Recent cases of failed ethical judgment in
business
– General Motors, Barclay’s Bank, GlaxoSmithKline, Takata
Corporation
– In many, information systems used to bury decisions from public
scrutiny

• Ethics
– Principles of right and wrong that individuals, acting as free moral
agents, use to make choices to guide their behaviors

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What Ethical, Social, and Political Issues

Are Raised by Information Systems? (2 of 2)
• 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

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A Model for Thinking about Ethical, Social,

and 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 ripples—it may take years to
develop etiquette, expectations, laws
– Requires understanding of ethics to make choices in legally gray
areas

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Figure 4.1: The Relationship Between

Ethical, Social, and Political Issues in an
Information Society

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Five Moral Dimensions of the

Information Age

• Information rights and obligations

• Property rights and obligations
• Accountability and control
• System quality
• Quality of life

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Key Technology Trends that Raise Ethical

Issues
• Computing power doubles every 18 months
• Data storage costs rapidly decline
• Data analysis advances
• Networking advances
• Mobile device growth impact

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Advances in Data Analysis Techniques

• Profiling
– Combining data from multiple sources to create dossiers of
detailed information on individuals

• Nonobvious relationship awareness (NORA)

– Combining data from multiple sources to find obscure hidden
connections that might help identify criminals or terrorists

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Figure 4.2: Nonobvious Relationship

Awareness (NORA)

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Basic Concepts: Responsibility,

Accountability, and Liability
• 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

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Ethical Analysis
• Five-step process for ethical analysis
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.

Copyright © 2018 Pearson Education Ltd.

Candidate Ethical Principles (1 of 2)

• 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

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Candidate Ethical Principles (2 of 2)

• Utilitarian Principle
– Take the action that achieves the higher or greater value

• Risk Aversion Principle

– Take the action that produces the least harm or 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

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Professional Codes of Conduct

• Promulgated by associations of professionals
– American Medical Association (AMA)
– American Bar Association (ABA)
– Association for Computing Machinery (ACM)

• Promises by professions to regulate themselves in

the general interest of society

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Real-world Ethical Dilemmas

• One set of interests pitted against another
• Examples
– Monitoring employees: Right of company to maximize productivity
of workers versus workers right to use Internet for short personal
tasks
– Facebook monitors users and sells information to advertisers and
app developers

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Information Rights: Privacy and Freedom

in the Internet Age (1 of 3)
• 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 the United States, privacy protected by:

– First Amendment (freedom of speech and association)
– Fourth Amendment (unreasonable search and seizure)
– Additional federal statues (e.g., Privacy Act of 1974)

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Information Rights: Privacy and Freedom

in the Internet Age (2 of 3)
• Fair information practices
– Set of principles governing the collection and use of
information
 Basis of most U.S. and European privacy laws
– Used to drive changes in privacy legislation
 COPPA
 Gramm-Leach-Bliley Act
 HIPAA
 Do-Not-Track Online Act of 2011

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Information Rights: Privacy and Freedom

in the Internet Age (3 of 3)
• FTC FIP principles
– Notice/awareness (core principle)
– Choice/consent (core principle)
– Access/participation
– Security
– Enforcement

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European Directive on Data Protection:

• Use of data requires informed consent of
customer
• EU member nations cannot transfer personal data
to countries without similar privacy protection
• Stricter enforcements under consideration:
– Right of access
– Right to be forgotten

• Safe harbor framework

• Edward Snowden
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Internet Challenges to Privacy (1 of 2)

• Cookies
– Identify browser and track visits to site
– Super cookies (Flash cookies)

• Web beacons (web bugs)

– Tiny graphics embedded in e-mails and web pages
– Monitor who is reading e-mail message or visiting site

• Spyware
– Surreptitiously installed on user’s computer
– May transmit user’s keystrokes or display unwanted ads

• Google services and behavioral targeting

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Internet Challenges to Privacy (2 of 2)

• The United States allows businesses to gather
transaction information and use this for other
marketing purposes.
• Opt-out vs. opt-in model
• Online industry promotes self-regulation over
privacy legislation.
– Complex/ambiguous privacy statements
– Opt-out models selected over opt-in
– Online “seals” of privacy principles

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Figure 4.3: How Cookies Identify Web

Visitors

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Technical Solutions
• Solutions include:
– E-mail encryption
– Anonymity tools
– Anti-spyware tools

• Overall, technical solutions have failed to protect

users from being tracked from one site to another
– Browser features
 “Private” browsing
 “Do not track” options

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Property Rights: Intellectual Property

• Intellectual property
– Intangible property of any kind created by individuals or
corporations

• Three main 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

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Challenges to Intellectual Property Rights

• Digital media different from physical media
– Ease of replication
– Ease of transmission (networks, Internet)
– Ease of alteration
– Compactness
– Difficulties in establishing uniqueness
• Digital Millennium Copyright Act (DMCA)
– Makes it illegal to circumvent technology-based
protections of copyrighted materials

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Computer-Related Liability Problems

• If software fails, who is responsible?
– If seen as part of a machine that injures or harms, software
producer and operator may be liable.
– If seen as similar to book, difficult to hold author/publisher
responsible.
– If seen as a service? Would this be similar to telephone systems
not being liable for transmitted messages?

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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)

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Quality of Life: Equity, Access, Boundaries

(1 of 3)
• Negative social consequences of systems
• Balancing power: center versus periphery
• Rapidity of change: reduced response time to
competition
• Maintaining boundaries: family, work, and leisure
• Dependence and vulnerability
• Computer crime and abuse

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Quality of Life: Equity, Access, Boundaries

(2 of 3)
• Computer crime and abuse
– Computer crime
– Computer abuse
– Spam
– CAN-SPAM Act of 2003

• Employment
– Trickle-down technology
– Reengineering job loss

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Quality of Life: Equity, Access, Boundaries

(3 of 3)
• Equity and access
– The digital divide

• Health risks
– Repetitive stress injury (RSI)
– Carpal tunnel syndrome (CTS)
– Computer vision syndrome (CVS)
– Technostress

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