Chapter 12

Technology: Ethics and

Social Responsibility Issues

O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Learning Objectives
By the end of this chapter, you should be able to:
• Examine the characteristics of technology and its economic impact
• Understand how technology creates ethics issues
• Examine ways to manage ethics issues in technology
• Explore the future of technology ethics

O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 12-1
Defining Technology

O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Defining Technology 1 of 7
• Technology – The application of scientific knowledge to efficiently solve
real-world problems
• Technology disruption – When innovation replaces existing systems and
habits
• Internet of Things (IoT) – The system of connected devices that provides
the ability to send and receive information over the internet
– “Things” refers to internet-connected devices such as smartphones, virtual
assistants, and wearable technology.

• Reach – The broad nature of technology as it moves through society

• Self-sustaining – When technology acts as a catalyst to spur even faster
development

O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Defining Technology 2 of 7
Technology Ethics
• Communication patterns are especially impacted by new technologies.
– Super computers, big data, AI
– Predictive analytics – Using values or algorithms to provide data-backed decision
options
o Any technology used to predict human behavior can raise ethical questions.

• A technology is not inherently good or bad.

– Risks evolve when technology is used that goes beyond human decision makers
without human control.

• Ethical issues and questions need to be addressed around the development

and implementation of technology that is used in organizational operations.
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Defining Technology 3 of 7

Technologies to Watch
• Artificial intelligence (AI) – Technology that allows machines to learn and
perform tasks that typically require human intelligence using algorithms and data
– Algorithm – A set of rules providing instructions for problem solving
– Risk areas with AI decisions must be monitored for compliance.
– AI needs to be programmed with ethical parameters.
• AI eliminates repetitive tasks.
– Can enhance customer service
– Has expanding uses in field of medicine
• AI contributes to job loss while also creating new types of jobs.
• The use of AI can create unintended biases.
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 FIGURE 12-2 AI and Its Enablers

O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Defining Technology 4 of 7

• Big data – Large volumes of structured and unstructured data that need to
be transmitted at very fast speeds
– Examples include consumer shopping habits, social media activity, web browsing
history, and more.

• Insights gleaned from big data can inform business strategies.

• Companies have unprecedented access to vast amounts of data.
– Concern for consumer privacy
– Ethical issue around how data should be shared, used in business

O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Defining Technology 5 of 7

• Blockchain – A decentralized recordkeeping technology that stores an

immutable record of data “blocks” (or ledgers) over time
– Increased transparency and security
– Lower risk of cyberattacks
– Improves supply chains and food safety
– Creates an audit trail, protects consumers and businesses from fraud
– Protects individual privacy

• Ledgers cannot stop corrupt individuals from adding fraudulent information.

• Some type of blockchain compliance or control is necessary.
• Centralization could cause issues.
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Defining Technology 6 of 7

• Drones – Unmanned aerial devices

• Can be programmed with AI
• Reduce risks to employee health and safety by performing dangerous tasks
• Extend geographic reach of a business (e.g., delivery of goods)
• Protection of consumer privacy when surveillance is in use needs to be
considered

O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Defining Technology 7 of 7

• Can perform humanlike actions and carry out custom tasks

• Can be programmed with AI to learn, reason, use language, formulate
original ideas
• Can lead to job loss but also increase need for workers skilled in application
of AI technologies
• Safety is a concern
• Roboethics (machine ethics) – Concerns the design and implementation
of a code of conduct that must be programmed into the artificial intelligence
of a robot

O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 12-2
Ethics Issues in Technology

O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Ethics Issues in Technology 1 of 6
Privacy
• Data protection
– Cookies – Data from a website that is stored on a computer, which is then sent back
to the website
– Right to Be Forgotten – Law allows internet users in the European Union (EU) to
have unwanted links removed from Google search results
– General Data Protection Regulation (GDPR) – European Union (EU) law on data
protection and data privacy
o Compliance can be costly to firms.
o United States lacks a comprehensive consumer data protection law.

– Children’s Online Privacy Protection Act (COPPA) – U.S. law that directs the
Federal Trade Commission (FTC) to create and enforce regulations governing the
online privacy of children
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Ethics Issues in Technology 2 of 6
• Surveillance
• Surveillance tools include cameras, beacons, biometric surveillance technology (e.g.,
facial recognition).
• Many are concerned that recognition technology is not accurate enough, could lead
to misidentification and major trust issues.
o Facial recognition technology suffers from racial bias.
• Critics call the technology invasive.
• These technologies are implemented in the name of safety but can put privacy,
security at risk.
• Employee privacy
• There are few legal protections.
• Monitoring is used to manage productivity and protect resources.
o It’s generally agreed that employers have a right to monitor company email.
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Ethics Issues in Technology 3 of 6
Intellectual Property
• Intellectual property – Intangible ideas and creative materials
– Technological advancements are challenging the ownership of intellectual property.

• Copyright – Protects original works, both published and unpublished, including

musical, literary, dramatic, and artistic works
– Digital Millennium Copyright Act (DMCA) protects copyrighted materials on the internet

• Trademark – Protects words, phrases, symbols, and designs

– Cybersquatters defraud businesses and consumers.

• Patent infringement – When an organization makes, uses, or sells a patented

item without permission
– Misappropriation of emerging technologies can be expensive and difficult to prove.
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Ethics Issues in Technology 4 of 6
Cybercrime
• Malware – Malicious software that can be used to steal intellectual
property or sensitive customer data
• Fraud – Intentional deceit for the purpose of financial or personal gain
– Online fraud is a major issue for both businesses and consumers.

• Phishing – A cybercrime in which attackers disguise themselves as a

legitimate business in order to obtain sensitive information

O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
FIGURE 12-4 The Costs of an Adverse Cyber Event

O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Ethics Issues in Technology 5 of 6
The Digital Divide
• Digital divide – The varying levels of access to technology across social,
geographical, and geopolitical groups
• Americans rely on the internet more than ever, yet millions go without it.
• The Federal Communication Commission (FCC) has a lifeline program to
subsidize funding for mobile devices and internet access.
• Both businesses and the government are hoping to close digital divide.
• Supporters of 5G believe that the technology will help extend coverage.

O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Ethics Issues in Technology 6 of 6
Biotechnology
• Biotechnology – The exploitation of biological processes for industrial and
other purposes, especially the genetic manipulation of microorganisms to
produce antibiotics, hormones, and other items
• Bioethics – The ethical application and implication of ethics in medicine,
healthcare, biotechnology, and the environment
– Medical and genetic data privacy; cyberattacks against medical devices and systems
– Biohacking
– Eugenics
– Bioterrorism
– Increased life expectancy concerns
– Biotechnology price inequity
– Patent issues
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 12-3
Managing Ethics Issues in Technology

O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Managing Ethics Issues in Technology 1 of 1
• Businesses are responsible for the ethical use of technology.
– Can be difficult to identify potential issues with emerging technology
– Effective programs take a strategic approach
• Chief privacy officer (CPO) – An executive responsible for developing and
implementing policies and procedures related to privacy protection
– Knows about privacy laws, data protection laws, crisis management
• Technology assessment – A procedure that helps organizations evaluate the
possible effects that new processes, systems, and products will have on
business operations and stakeholders
• Governments need to maintain basic infrastructure and support for technology.
– Governments have trouble keeping up.

O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 12-4
The Future of Technology Ethics

O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 The Future of Technology Ethics 1 of 1
• AI is one of the most important trends to watch going forward.
• Machine-to-machine (M2M) communication – allows connected devices to
interact without human intervention
– Track decisions, activities of humans
• 5G will unlock IoT’s potential.
– Many are concerned about increased data use, consumption.
• There are challenges in technology ethics.
– Finding competent managers
– Developing frameworks to address ethics
• Current knowledge and requirements about business ethics must be
adjusted when machines are programmed to make decisions.

O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.