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COURSE: Fundamentals of Information Technology
TOPIC: Social, Legal, Economical and Ethical Issues of IT
Technology can be a double-edged sword. It can be the source of many benefits. One great
achievement of contemporary computer systems is the ease with which digital information can be
analyzed, transmitted, and shared among many people. But at the same time, this powerful capability
creates new opportunities for breaking the law or taking benefits away from others. Balancing the
convenience and privacy implications of using technology to track consumers and send unsolicited
e-mail is one of the compelling ethical issues raised by contemporary information systems.
1. Understanding the moral risks of new technology. Rapid technological change means that
the choices facing individuals also rapidly change, and the balance of risk and reward and the
probabilities of apprehension for wrongful acts change as well. Protecting individual privacy
has become a serious ethical issue precisely for this reason. In this environment it will be
important for management to conduct an ethical and social impact analysis of new
technologies. There may not always be right answers for how to behave but there should be
management awareness on the moral risks of new technology.
2. Establishing corporate ethics policies that include information systems issues. Managers
will be responsible for developing, enforcing, and explaining corporate ethics policies. A
corporation should have an ethics policy in the information systems area covering such issues
as privacy, property, accountability, system quality, and quality of life. The challenge will be
in educating non-IS managers to the need for these policies, as well as educating the
The Internet and electronic commerce have awakened new interest in the ethical and social
impact of information systems. Internet and digital firm technologies that make it easier than
ever to assemble, integrate, and distribute information have unleashed new concerns about
appropriate use of customer information, the protection of personal privacy, and the protection of
intellectual property. These issues have moved to the forefront of social and political debate in
many other countries.
Although protecting personal privacy and intellectual property on the Internet are now in the
spotlight, there are other pressing ethical issues raised by the widespread use of information
systems. They include establishing accountability for the consequences of information systems,
setting standards to safeguard system quality that protect the safety of the individual and society,
and preserving values and institutions considered essential to the quality of life in an information
society. This chapter describes these issues and suggests guidelines for dealing with these
questions, with special attention to the ethical challenges posed by the Internet.
Understanding Ethical and Social Issues Related to Systems
Ethics refers to the principles of right and wrong that individuals, acting as free moral agents,
use to make choices to guide their behavior. Information technology and information systems
raise new ethical questions for both individuals and societies because they create opportunities
for intense social change, and thus threaten existing distributions of power, money, rights, and
obligations. Like other technologies, such as steam engines, electricity, telephone, and radio,
information technology can be used to achieve social progress, but it can also be used to commit
crimes and threaten cherished social values. The development of information technology will
produce benefits for many, and costs for others. When using information systems, it is essential
to ask, what is the ethical and socially responsible course of action?
Figure 5-1 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.
Moral Dimensions of the Information Age
Major ethical, social, and political issues raised by information systems include the following
moral dimensions:
Information Rights - The rights that individuals and organizations have with respect to
information that pertains to themselves.
1. Information rights and obligations: What information rights do individuals and
organizations possess with respect to information about themselves? What can they
protect? What obligations do individuals and organizations have concerning this
2. Property rights: How will traditional intellectual property rights be protected in a digital
society in which tracing and accounting for ownership is difficult, and ignoring such
property rights is so easy?
3. Accountability and control: Who can and will be held accountable and liable for the harm
done to individual and collective information and property rights?
4. System quality: What standards of data and system quality should we demand to protect
individual rights and the safety of society?
5. Quality of life: What values should be preserved in information- and knowledge based
society? What institutions should we protect from violation? What cultural values and
practices are supported by the new information technology?
Key Technology Trends That Raise Ethical Issues
Ethical issues long preceded information technology—they are the abiding concerns of free
societies everywhere. Nevertheless, information technology has heightened ethical concerns, put
stress on existing social arrangements, and made existing laws obsolete or severely crippled.
There are four key technological trends responsible for these ethical stresses and they are
summarized in Table 5-1.
The doubling of computing power every 18 months has made it possible for most
organizations to use information systems for their core production processes. As a result, our
dependence on systems and our vulnerability to system errors and poor data quality have
increased. Social rules and laws have not yet adjusted to this dependence. Standards for ensuring
the accuracy and reliability of information systems are not universally accepted or enforced.
Advances in data storage techniques and rapidly declining storage costs have been
responsible for the multiplying databases on individuals—employees, customers, and potential
customers—maintained by private and public organizations. These advances in data storage have
made the routine violation of individual privacy both cheap and effective. Already massive data
storage systems are cheap enough for regional and even local retailing firms to use in identifying
Advances in data analysis techniques for large pools of data are a third technological
trend that heightens ethical concerns, because they enable companies to find out much detailed
personal information about individuals. With contemporary information systems technology,
companies can assemble and combine the myriad pieces of information stored on you by
computers much more easily than in the past. Think of all the ways you generate computer
information about yourself—credit card purchases, telephone calls, magazine subscriptions,
video rentals, mail-order purchases, banking records, and local, state, and federal government
records (including court and police records). Put together and mined properly, this information
could reveal not only your credit information but also your driving habits, your tastes, your
associations, and your political interests.
Companies with products to sell purchase relevant information from these sources to
help them more finely target their marketing campaigns. The use of computers to combine data
from multiple sources and create electronic dossiers of detailed information on individuals is
called profiling. For example, hundreds of Web sites allow DoubleClick,
an Internet advertising broker, to track the activities of their visitors in exchange for revenue
from advertisements based on visitor information DoubleClick gathers. DoubleClick uses this
information to create a profile of each online visitor, adding more detail to the profile as the
visitor accesses an associated DoubleClick site. Over time DoubleClick can create detailed
dossier of a person’s spending and computing habits on the Web that can be sold to companies to
help them target their Web ads more precisely.
Profiling - The use of computers to combine data from multiple sources and create electronic
dossiers of detailed information on individuals.
Last, advances in networking, including the Internet, promise to reduce greatly the costs
of moving and accessing large quantities of data, and open the possibility of mining large pools
of data remotely using small desktop machines, permitting an invasion of privacy on a scale and
precision heretofore unimaginable.
The development of global digital-superhighway communication networks widely
available to individuals and businesses poses many ethical and social concerns. Who will
account for the flow of information over these networks? Will you be able to trace information
collected about you? What will these networks do to the traditional relationships between family,
work, and leisure? How will traditional job designs be altered when millions of “employees”
become subcontractors using mobile offices for which they themselves must pay?
Credit card purchases can make
personal information available to
market researchers, telephone
marketers, and direct mail companies.
Advances in information technology
facilitate the invasion of privacy.
Ethics in an Information Society
Ethical decisions draw on the concepts of responsibility, accountability, liability, and due
process. Responsibility means accepting the potential costs, duties, and obligations of one's
decisions. Accountability consists of the mechanisms for accessing responsibility for decisions
made and actions taken. Liability refers to the existence of laws that permit individuals to
recover the damages done to them by other actors, systems, or organizations. Due process
requires that laws are known and understood by all, and that individuals can appeal to higher
authorities to ensure laws were properly applied.
The Moral Dimensions of Information Systems
There are ethical, social, and political levels of analysis for each of the five moral dimensions of
information systems. Information rights include protection of privacy, the claim of individuals
to be left alone, free from surveillance or interference from other individuals, organizations, or
the state. Most American and European privacy law is based on the principles of Fair
Information Practices (FIP) set forth in 1973 to govern the collection and use of information
about individuals. An individual has an interest in the information gathered about him or her and
the record may not be used to support other activities without the individual's consent. European
privacy protection is much more stringent than in the United States. The European Directive on
Data Protection requires companies to inform people when they collect information about them
and to disclose how it will be stored and used. EU member nations cannot transfer personal data
to countries such as the United States that don't have similar privacy protection regulations.
Unfortunately, most of the computer transactions about individuals occurring today are
not protected by existing privacy legislation. The Internet poses new challenges to the protection
of individual privacy because information can easily be monitored, captured and stored as it
passes through its network of computer systems. Companies can record a user's on-line activities,
such as what files were accessed or which Web sites were visited. Web sites can learn the
identity of their visitors if the visitors voluntarily register at the site or they can capture
information about visitors without their knowledge using "cookie" technology. Cookies are tiny
files deposited on a computer hard drive when a user visits certain Web sites. Cookies identify
the visitor's Web browser software and track visits to the Web site. Some companies are also
using Web bugs, which are tiny graphic files embedded into e-mail messages and Web pages to
monitor who is reading the e-mail message or Web page. Both the U.S. government and industry
groups have developed guidelines for Web site privacy, but additional legislation and
technologies may also be required for privacy protection over the Internet. Both opt-in and optout models for informed consent are being considered. Figure 5-3. The Platform for Privacy
Preferences (P3P) is a standard for communicating a Web site’s privacy policy to Internet users
to help them select the level of privacy they wish to maintain when interacting with the Web site.
How cookies can 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.
Organizations can collect e-mail addresses to send out thousands and even hundreds of
thousands of unsolicited e-mail and electronic messages. This practice is called spamming, and
it is growing because it only costs a few cents to send thousands of messages advertising one's
wares to Internet users.
Legal Issues
Contemporary information systems have severely challenged existing law and social practices
protecting intellectual property, which is the intangible property created by individuals or
corporations that are subject to protections under trade secret, copyright, and patent law. A trade
secret is an intellectual work product used for a business practice that can be classified as
belonging to that business, provided it is not based on information in the public domain.
Copyright is a statutory grant which protects creators of intellectual property against copying by
others for a period of 28 years. A patent grants the owner an exclusive monopoly on the ideas
behind the invention for 20 years. Information System software can be so easily copied, altered
or transmitted, that it is difficult to protect with existing intellectual property safeguards. Illegal
copying of software is rampant worldwide. While protecting against copying of software
program code, copyright protection can't prevent another person from using the underlying ideas
behind a piece of software and developing software that follows the same concepts. Very little
software has received patent protection, which does protect the underlying ideas behind software,
because the software must pass very stringent criteria concerning the originality and novelty of
those ideas. The Internet makes it even easier to copy intellectual property and transmit it freely
around the world.
New information technologies are also challenging existing liability law and social practices for
holding individuals and institutions accountable. A producer of computer software that is part of
a machine that causes damage can be held liable for damages. However producers of computer
software products that are treated like books are not yet considered liable for the harm the
software causes. Are individuals and organizations that create, produce and sell information
systems software and services morally responsible for the consequences of their use? What is an
acceptable level of system quality and reliability when most software can never be 100% error
free? Both of these questions remain open issues.
The negative social costs of introducing new information technologies are beginning to mount.
By creating more efficient organizations, information systems threaten to eliminate many
management and clerical jobs. Many organizations have heightened their vulnerability to natural
disasters, power outages, computer crime, computer abuse, and computer viruses because they
are so dependent on computers. Computer crime (the commission of illegal acts through the use
of a computer against a computer system) and computer abuse (the commission of acts involving
a computer that may not be illegal but are considered unethical) are primarily committed by
people inside the organization. Information systems enable some companies to create a "do
anything anywhere" work environment that erodes the traditional boundaries between work and
family life, lessening the time individuals can devote to their families and personal lives.
Information technology may help intensify the cleavage between rich and poor because
information, knowledge, and access to computers are inequitable distributed in the first place.
Finally, computers may be responsible for the mounting incidence of repetitive stress injury
(RSI) and occupational illness such as computer vision syndrome and technostress. For each
of the five moral dimensions, corporations should develop an ethics policy statement to assist
individuals and to encourage correct decisions.
1. To protect individual information rights, companies should spell out corporate privacy and
due process policies.
2. To protect property rights, management should clarify how the corporation will treat
property rights of software owners.
3. To promote accountability and control, firms should clarify who is responsible and
accountable for information.
4. To promote system quality, companies should identify methodologies and quality standards
to achieve.
5. To enhance quality of life, firms should identify corporate policies on family, computer
crime, decision making, vulnerability, job loss, and health risks.
Technical Solutions
In addition to legislation, new technologies are being developed to protect user privacy during
interactions with Web sites. Many of these tools are used for encrypting e-mail, for making email or Web surfing activities appear anonymous, or for preventing user computers from
accepting “cookies.” Table 5-4 describes some of these tools.
Interest is now growing in tools to help users determine the kind of personal data that can
be extracted by Web sites. The Platform for Privacy Preferences, known as P3P enables
automatic communication of privacy policies between an e-commerce site and its visitors. P3P
provides a standard for communicating a Web site’s privacy policy to Internet users and for
comparing that policy to the user’s preferences or to other standards such as the FTC’s new FIP
guidelines or the European Directive on Data Protection. Users can use P3P to select the level of
privacy they wish to maintain when interacting with the Web site.
Ethical Issues
The ethical privacy issue in this information age is as follows: Under what conditions should I
(you) invade the privacy of others? What legitimates intruding into others’ lives through
unobtrusive surveillance, through market research, or by whatever means? Do we have to inform
people that we are eavesdropping? Do we have to inform people that we are using credit history
information for employment screening purposes?
Social Issues
The social issue of privacy concerns the development of “expectations of privacy” or privacy
norms, as well as public attitudes. In what areas of life should we as a society encourage people
to think they are in “private territory” as opposed to public view? For instance, should we as a
society encourage people to develop expectations of privacy when using electronic mail, cellular
telephones, bulletin boards, the postal system, the workplace, or the street? Should expectations
of privacy be extended to criminal conspirators?
Political Issues
The political issue of privacy concerns the development of statutes that govern the relations
between record keepers and individuals. Should we permit the FBI to monitor e-mail at will in
order to apprehend suspected criminals and terrorists (see the chapter ending case study). To
what extent should e-commerce sites and other businesses be allowed to maintain personal data
about individuals?
Property Rights: Intellectual Property
Contemporary information systems have severely challenged existing laws and social practices
that protect private intellectual property. Intellectual property is considered to be intangible
property created by individuals or corporations. Information technology has made it difficult to
protect intellectual property because computerized information can be so easily copied or
distributed on networks. Intellectual property is subject to a variety of protections under three
different legal traditions: trade secret, copyright, and patent law.
Intellectual Property - Intangible property created by individuals or corporations that is subject
to protections under trade secret, copyright, and patent law
The practice of sending unsolicited e-mail and other electronic communication.
Health Risks: RSI, CVS, and Technostress
The most important occupational disease today is repetitive stress injury (RSI). RSI occurs when
muscle groups are forced through repetitive actions often with high-impact loads (such as tennis)
or tens of thousands of repetitions under low-impact loads (such as working at a computer
The single largest source of RSI is computer keyboards. About 50 million Americans use
computers at work. The most common kind of computer-related RSI is carpal tunnel syndrome
(CTS), in which pressure on the median nerve through the wrist’s bony structure, called a “carpal
tunnel,” produces pain. The pressure is caused by constant repetition of keystrokes: In a single
shift, a word processor may perform 23,000 keystrokes. Symptoms of carpal tunnel syndrome
include numbness, shooting pain, inability to grasp objects, and tingling. Millions of workers
have been diagnosed with carpal tunnel syndrome.
Carpal Tunnel Syndrome (CTS) - Type of RSI in which pressure on the median nerve through
the wrist’s bony carpal tunnel structure produces pain.
RSI is avoidable. Designing workstations for a neutral wrist position (using a wrist rest to
support the wrist), proper monitor stands, and footrests all contribute to proper posture and
reduced RSI. New, ergonomically correct keyboards are also an option, although their
effectiveness has yet to be clearly established. These measures should be backed by frequent rest
breaks, rotation of employees to different jobs, and movement toward voice or scanner data
RSI is not the only occupational illness computers cause. Back and neck pain, leg stress, and foot
pain also result from poor ergonomic designs of workstations. Computer vision syndrome
(CVS) refers to any eyestrain condition related to computer display screen use. Its symptoms,
usually temporary, include headaches, blurred vision, and dry and irritated eyes.
The newest computer-related malady is technostress, which is stress induced by computer use.
Its symptoms include aggravation, hostility toward humans, impatience, and fatigue. The
problem according to experts is that humans working continuously with computers come to
expect other humans and human institutions to behave like computers, providing instant
response, attentiveness, and an absence of emotion. Computer-intense workers are aggravated
when put on hold during phone calls and become incensed or alarmed when their PCs take a few
seconds longer to perform a task. Technostress is thought to be related to high levels of job
turnover in the computer industry, high levels of early retirement from computer-intense
occupations, and elevated levels of drug and alcohol abuse.
The incidence of technostress is not known but is thought to be in the millions in the United
States and growing rapidly. Computer-related jobs now top the list of stressful occupations based
on health statistics in several industrialized countries.
Repetitive stress injury (RSI) is the
leading occupational disease today.
The single largest cause of RSI is
computer keyboard work.
To date the role of radiation from computer display screens in occupational disease has not been
proved. Video display terminals (VDTs) emit nonionizing electric and magnetic fields at low
frequencies. These rays enter the body and have unknown effects on enzymes, molecules,
chromosomes, and cell membranes. Long-term studies are investigating low-level
electromagnetic fields and birth defects, stress, low birth weight, and other diseases. All
manufacturers have reduced display screen emissions since the early 1980s, and European
countries such as Sweden have adopted stiff radiation emission standards.
The computer has become a part of our lives—personally as well as socially, culturally, and
politically. It is unlikely that the issues and our choices will become easier as information
technology continues to transform our world. The growth of the Internet and the information
economy suggests that all the ethical and social issues we have described will be heightened
further as we move into the first digital century.
Source: Managing the Digital Firm by Laudon & Laudon