Management Information Systems:

Managing the Digital Firm

Sixteenth Edition • Global Edition

Chapter 4
Ethical and Social Issues in
Information Systems

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Are Cars Becoming Big Brother on
Wheels? (1 of 2)
• Problem
– Opportunities from new technology
– Undeveloped legal environment
• Solutions
– Develop big data strategy
– Develop privacy policies
– Collect car-generated data
– Analyze car/driver data
– Smartphones, event data recorders
– In-car diagnostics/navigation/entertainment
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Are Cars Becoming Big Brother on
Wheels? (2 of 2)
• Vehicle and driver monitoring systems
• Demonstrates how technological innovations can be a
double-edged sword
• Illustrates how I T systems create consumer benefits and
costs

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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
– Wells Fargo, Deerfield Management, General Motors,
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 opportunities for crime
• New kinds of crimes

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A Model for Thinking About Ethical,
Social, and Political Issues
• Society as a calm pond
• I T 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 - What information rights
do individuals and organizations possess with respect to
themselves? What can they protect?
• 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?
• Accountability and control - Who can and will be held
accountable and liable for the harm done to individual and
collective information and property rights?

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Five Moral Dimensions of the
Information Age
• System quality - What standards of data and system quality
should we demand to protect individual rights and the safety of
society?
• 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 does the new information technology support?

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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 (NO RA)
– 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 (NOR A)

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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.

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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
• Slippery Slope Rule
– 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 (AM A)
– American Bar Association (AB A)
– Association for Computing Machinery (AC M)
• 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’ desire 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
 C O PP A
 Gramm-Leach-Bliley Act
 HI PA A

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Information Rights: Privacy and
Freedom in the Internet Age (3 of 3)
• FT C F I P principles
– Notice/awareness (core principle)
– Choice/consent (core principle)
– Access/participation
– Security
– Enforcement

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EU General Data Protection
Regulation (GDP R)
• Requires unambiguous explicit informed consent of
customer
• E U member nations cannot transfer personal data to
countries without similar privacy protection
– Applies across all E U countries to any firms operating
in E U or processing data on E U citizens or residents
– Strengthens right to be forgotten
• Privacy Shield: All countries processing E U data must
conform to G DP R requirements
• Heavy fines: 4% of global daily revenue
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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 email 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 v s. 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

1. The Web server reads the user's Web browser and determines the operating system,
browser name, version number, Internet address, and other information.
2. The server transmits a tiny text file with user identification information called a cookie,
which the user's browser receives and stores on the user's computer.
3. When the user returns to the Web site, the server requests the contents of any cookie
it deposited previously in the user's computer.
4. The Web server reads the cookie, identifies the visitor, and calls up data on the user.
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Technical Solutions
• Solutions include:
– Email 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
– Tangible and intangible products of the mind created by
individuals or corporations
• Protected in four main ways:
– Copyright
– Patents
– Trademarks
– Trade secret

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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 (DM C A)

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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 (RS I)
– Carpal tunnel syndrome (CT S)
– Computer vision syndrome (CV S)
– Technostress

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Interactive Session: Organizations:
Will AI Kill Jobs?
• Class discussion
– Identify the problem described in this case study. In
what sense is it an ethical dilemma?
– Should more tasks be given to AI? Why or why not?
Explain your answer.
– Can the problem of AI reducing employment be
solved? Explain your answer.

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Interactive Session: Technology:
Volkswagen Pollutes its Reputation
• Class discussion
– Does the Volkswagen emission crisis pose an ethical
dilemma? Why or why not? If so, who are the
stakeholders?
– Describe the role of management, organization, and
technology factors in creating VW’s software cheating
problem. To what extent was management
responsible? Explain your answer.
– Should all software-controlling machines be available
for public inspection? Why or why not?

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How Will MI S Help My Career?
• The Organization: Pinnacle Air Force Base
• Position Description: Junior privacy analyst
• Job Requirements
• Interview Questions
• Author Tips

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Copyright

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