Faculty of Economics and

Administrative Sciences

Management Information
Systems
Course Code 51458
by
Dr. Muath Asmar
 Management Information Systems
MANAGING THE DIGITAL FIRM, 12TH EDITION

Chapter 4
ETHICAL AND SOCIAL ISSUES IN
INFORMATION SYSTEMS
 Management 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?
3 © Prentice Hall 2011
 Management Information Systems
CHAPTER 4: ETHICAL AND SOCIAL ISSUES IN
INFORMATION SYSTEMS
Understanding Ethical and Social Issues Related to Systems

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

4 © Prentice Hall 2011

 Management Information Systems
CHAPTER 4: ETHICAL AND SOCIAL ISSUES IN
INFORMATION SYSTEMS
Understanding Ethical and Social Issues Related to 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

5 © Prentice Hall 2011

 Management Information Systems
CHAPTER 4: ETHICAL AND SOCIAL ISSUES IN
INFORMATION SYSTEMS
Understanding Ethical and Social Issues Related to 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 ripples—it may take years to
develop etiquette, expectations, laws
• Requires understanding of ethics to make choices in
legally gray areas

6 © Prentice Hall 2011

 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

7 © Prentice Hall 2011

 Management Information Systems
CHAPTER 4: ETHICAL AND SOCIAL ISSUES IN
INFORMATION SYSTEMS
Understanding Ethical and Social Issues Related to Systems

• Five moral dimensions of the

information age
1. Information rights and obligations
2. Property rights and obligations
3. Accountability and control
4. System quality
5. Quality of life

8 © Prentice Hall 2011

 Management Information Systems
CHAPTER 4: ETHICAL AND SOCIAL ISSUES IN
INFORMATION SYSTEMS
Understanding Ethical and Social Issues Related to Systems

• Key technology trends that raise ethical issues

1. Doubling of computer power
• More organizations depend on computer systems for
critical operations
1. Rapidly declining data storage costs
• Organizations can easily maintain detailed databases
on individuals
1. Networking advances and the Internet
• Copying data from one location to another and
accessing personal data from remote locations is much
easier
9 © Prentice Hall 2011
 Management Information Systems
CHAPTER 4: ETHICAL AND SOCIAL ISSUES IN
INFORMATION SYSTEMS
Understanding Ethical and Social Issues Related to 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
– Nonobvious relationship awareness (NORA)
» Combining data from multiple sources to find obscure
hidden connections that might help identify criminals or
terrorists

10 © Prentice Hall 2011

 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

11 © Prentice Hall 2011

 Management Information Systems
CHAPTER 4: ETHICAL AND SOCIAL ISSUES IN
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
– 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

12 © Prentice Hall 2011

 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

13 © Prentice Hall 2011

 Management Information Systems
CHAPTER 4: ETHICAL AND SOCIAL ISSUES IN
INFORMATION SYSTEMS
Ethics in an Information Society

• Six Candidate Ethical Principles

1. Golden Rule
• Do unto others as you would have them do unto you
1. Immanuel Kant’s Categorical Imperative
• If an action is not right for everyone to take, it is not
right for anyone
1. Descartes’ Rule of Change
• If an action cannot be taken repeatedly, it is not right
to take at all

14 © Prentice Hall 2011

 Management Information Systems
CHAPTER 4: ETHICAL AND SOCIAL ISSUES IN
INFORMATION SYSTEMS
Ethics in an Information Society

• Six Candidate Ethical Principles (cont.)

4. Utilitarian Principle
• Take the action that achieves the higher or greater
value
4. Risk Aversion Principle
• Take the action that produces the least harm or least
potential cost
4. Ethical “no free lunch” Rule
• Assume that virtually all tangible and intangible objects
are owned by someone unless there is a specific
declaration otherwise
15 © Prentice Hall 2011
 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
16 © Prentice Hall 2011
 Management Information Systems
CHAPTER 4: ETHICAL AND SOCIAL ISSUES IN
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)
– Fourth Amendment (unreasonable search and
seizure)
– Additional federal statues (e.g. Privacy Act of 1974)
17 © Prentice Hall 2011
 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
18 © Prentice Hall 2011
 Management Information Systems
CHAPTER 4: ETHICAL AND SOCIAL ISSUES IN
INFORMATION SYSTEMS
The Moral Dimensions of Information Systems

• Fair Information Practices principles:

1. Notice/awareness (core principle)
2. Choice/consent (core principle)
3. Access/participation
4. Security
5. Enforcement
19 © Prentice Hall 2011
 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
– 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
• Self-regulating policy to meet objectives of government
legislation without involving government regulation or
enforcement.
20 © Prentice Hall 2011
 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 to help
identify visitor’s browser and track visits to site
• Allow Web sites to develop profiles on visitors
– Web beacons/bugs
• Tiny graphics embedded in e-mail and Web pages to monitor who
is reading message
– Spyware
• Surreptitiously installed on user’s computer
• May transmit user’s keystrokes or display unwanted ads
• Google’s collection of private data; behavioral
targeting
21 © Prentice Hall 2011
 Management Information Systems
CHAPTER 4: ETHICAL AND SOCIAL ISSUES IN
INFORMATION SYSTEMS
The Moral Dimensions of Information Systems
HOW COOKIES IDENTIFY WEB VISITORS

FIGURE 4-3 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.

22 © Prentice Hall 2011

 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
• However, extent of responsibility taken varies
– Statements of information use
– Opt-out selection boxes
– Online “seals” of privacy principles
• Most Web sites do not have any privacy policies
23 © Prentice Hall 2011
 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

24 © Prentice Hall 2011

 Management Information Systems
CHAPTER 4: ETHICAL AND SOCIAL ISSUES IN
INFORMATION SYSTEMS
The Moral Dimensions of Information Systems

THE P3P STANDARD

FIGURE 4-4 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 browser software evaluates the Web site’s privacy policy to determine
whether it is compatible with the user’s privacy preferences.
25 © Prentice Hall 2011
 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 main ways that protect intellectual property
1. Trade secret: Intellectual work or product belonging
to business, not in the public domain
2. Copyright: Statutory grant protecting intellectual
property from being copied for the life of the author,
plus 70 years
3. Patents: Grants creator of invention an exclusive
monopoly on ideas behind invention for 20 years

26 © Prentice Hall 2011

 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 Millennium Copyright Act (DMCA)
– Makes it illegal to circumvent technology-based
protections of copyrighted materials
27 © Prentice Hall 2011
 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 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?

28 © Prentice Hall 2011

 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)

29 © Prentice Hall 2011

 Management Information Systems
CHAPTER 4: ETHICAL AND SOCIAL ISSUES IN
INFORMATION SYSTEMS
The Moral Dimensions of Information Systems

• Quality of life: Equity, access, and boundaries

– Negative social consequences of systems
• Balancing power: Although computing power
decentralizing, key decision-making remains
centralized
• Rapidity of change: Businesses may not have enough
time to respond to global competition
• 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
30 systems © Prentice Hall 2011
 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

31 © Prentice Hall 2011

 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

32 © Prentice Hall 2011