Chapter 4

Ethical and Social

Issues in Information
Systems

4.1 © 2007 by Prentice Hall

 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

4.2 © 2007 by Prentice Hall

 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
4.3 © 2007 by Prentice Hall
 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

4.4 © 2007 by Prentice Hall

 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
4.5 © 2007 by Prentice Hall
 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
• What individual rights do individual & organizations
possess?
• What can they protect?
• Property rights and obligations
• How will traditional intellectual property rights be protected
in a digital society in which tracing & accounting for
ownership are difficult?

4.6 © 2007 by Prentice Hall

 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:
• Accountability and control
• Who can be held accountable & liable for the harm done to
individuals?
• System quality
• What standard of data & system quality should we demand
to protect individual rights and the safety of society?
• Quality of life
• What values should we preserved in information based
society?
• Which institutions should we protect from violation?
4.7 © 2007 by Prentice Hall
 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

4.8 © 2007 by Prentice Hall

 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
4.9 © 2007 by Prentice Hall
 Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems

Ethics in an Information Society

• Basic concepts :
• 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

4.10 © 2007 by Prentice Hall

 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

4.11 © 2007 by Prentice Hall

 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

4.12 © 2007 by Prentice Hall

 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

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 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

4.14 © 2007 by Prentice Hall

 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
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 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

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 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

4.17 © 2007 by Prentice Hall

 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.
4.18 © 2007 by Prentice Hall
 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

4.19 © 2007 by Prentice Hall

 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
4.20 © 2007 by Prentice Hall
 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

4.21 © 2007 by Prentice Hall

 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.

4.22 © 2007 by Prentice Hall

 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.

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 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
4.24 © 2007 by Prentice Hall
 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

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 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

4.26 © 2007 by Prentice Hall

 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”)

4.27 © 2007 by Prentice Hall

 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)

4.28 © 2007 by Prentice Hall

 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

4.29 © 2007 by Prentice Hall

 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?

4.30 © 2007 by Prentice Hall

 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
4.31 © 2007 by Prentice Hall
 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.

4.32 © 2007 by Prentice Hall

 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

4.33 © 2007 by Prentice Hall