Al Imam Mohammad Ibn Saud Islamic University

College of Computer and Information Sciences

Information Systems Department

IS 1180
IS and ethics
 Chapter 1
AN OVERVIEW OF ETHICS
LEARNING OBJECTIVES
1. What is ethics?
2. What trends have increased the likelihood of an unethical behavior?
3. What is corporate social responsibility, and why is fostering good
business ethics important?
4. What measures can organizations take to improve their business ethics?
5. How can you include ethical considerations in your decision making?
6. What trends have increased the risk that information technology will be
used in an unethical manner
INTRODUCTION
• In October 2014, the Federal Communications Commission (FCC)
announced a $105 million settlement with AT&T Mobility.
• The FCC also fined Verizon $90 million and Sprint $68 million in 2015
for billing customers for third-party texting services without their
consent
• What might cause employees to support and implement a practice,
such as cramming, that appears unethical and possibly illegal ?
WHAT IS ETHICS?
• Ethics: is a code of behavior that is defined by the group to which an
individual belongs.
• Ethics help members of a group understand their roles and responsibilities so
they can work together to achieve mutual benefits such as security, access to
resources, and the pursuit of life goals.
• Morals: are the personal principles upon which an individual bases
his or her decisions about right and wrong. They are core beliefs
formed and adhered to by an individual.
WHAT IS ETHICS?
WHAT IS ETHICS?
• Virtue: is a habit that inclines people to do what is acceptable
• Vice: is a habit of unacceptable behavior.
• Fairness, generosity, and loyalty are examples of virtues, while vanity,
greed, envy, and anger are considered vices
• People’s virtues and vices help define their personal value system—
the complex moral values they live by.
WHAT IS ETHICS?
• Opinions about what constitutes right and wrong behaviors can vary
dramatically. The world has many systems of beliefs about what is
right and wrong, each with many proponents
• For example: attitudes toward software piracy
WHAT IS ETHICS?
Life is complex, and on occasion, you will encounter a situation in
which the ethics of the group to which you belong conflict with your
morals, as highlighted in the following two examples:
• The ethics of the law profession demand that defense attorneys
defend an accused client to the best of their ability, even if they know
that the client is guilty of the most heinous and morally objectionable
crime one could imagine.
• The ethical standards of the medical profession do not allow a doctor
to euthanize a patient, even at the patient’s request. However, the
doctor may personally believe that the patient has a right, based on the
doctor’s own morals.
The Importance of Integrity
• A person who acts with integrity acts in accordance with a personal
code of principles.
• One approach to acting with integrity is to be consistent with your
beliefs and always act according to your moral standards.
• But is that realistic to maintain? What if a conflict occurs?
• Clearly, many ethical dilemmas are not as simple as right versus
wrong for example for some people, it is “right” to protect the
Alaskan wildlife from being spoiled and also “right” to find new
sources of oil to maintain U.S. oil reserves, but how do they balance
these two concerns?
The Difference Between Morals, Ethics, and
Laws
• Law: is a system of rules that tells us what we can and cannot do.
Laws are enforced by a set of institutions (the police, courts, law-
making bodies).
• Violation of law can result in censure, fines, and/or imprisonment.
• Sometimes, the laws of these various jurisdictions conflict.
• laws are not static.

• Legal acts are acts that conform to the law.

• Moral acts conform to what an individual believes to be the right
thing to do.
The Difference Between Morals, Ethics, and
Laws
• Just because an activity is defined as legal does not mean that it is
ethical
• As a result, practitioners in many professions subscribe to a code of
ethics that states the principles and core values that are essential to
their work and, therefore, govern their behavior.
The Difference Between Morals, Ethics, and
Laws
ETHICS IN THE BUSINESS WORLD
• Unethical behavior in the business world can lead to serious negative
consequences for both organizations and individuals.
• Several trends have increased the likelihood of unethical behavior:
• Globalization: created a much more complex work environment that spans
diverse cultures and societies, making it more difficult to apply principles and
codes of ethics consistently
• The challenging and uncertain economic climate: can make it more difficult to
maintain revenue and profits.
ETHICS IN THE BUSINESS WORLD
• Here are just a few examples of lapses in business ethics by
employees in IT organizations:
• Volkswagen has admitted that 11 million of its vehicles were equipped with
software used to cheat on emissions tests.
• Toshiba disclosed that it overstated its earnings over seven years by more
than $1.2 billion.
• Amazon has been criticized by some for creating a high-pressure work
environment in which bosses’ expectations were almost impossible to satisfy,
and jobs were threatened if illness or other personal issues encroached on
work.
ETHICS IN THE BUSINESS WORLD
• lower-level employees and ordinary individuals can find themselves in
the middle of ethical dilemmas.
ETHICS IN THE BUSINESS WORLD
• According to the 2013 National Business Ethics Survey, it is
managers—those expected to act as role models and enforce
discipline—who are responsible for 60 percent of workplace
misconduct.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
• Corporate social responsibility (CSR) is the concept that an
organization should act ethically by taking responsibility for the
impact of its actions on its shareholders, consumers, employees,
community, environment, and suppliers.
• For example: donating a portion of net profit to charity to implementing more
sustainable business operations or encouraging employee education through
tuition reimbursement.
• Setting CSR goals encourages an organization to achieve higher moral and
ethical standards.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
CORPORATE SOCIAL RESPONSIBILITY (CSR)
• Supply chain sustainability is a component of CSR that focuses on
developing and maintaining a supply chain that meets the needs of
the present without compromising the ability of future generations to
meet their needs.
• Supply chain sustainability takes into account issues such as fair labor
practices, energy and resource conservation, human rights, and community
responsibility.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
• Why would organizations prioritize CSR?
Pursuing some CSR goals can lead to increased profits, making it easy
for senior company management and stakeholders to support the
organization’s goals in this arena.
• What is if striving to meet a specific CSR goal leads to a decrease in
profits?
Senior management may be challenged to modify or drop that CSR goal
entirely.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
• In order for a CSR program to be effective, a senior executive should
be placed in charge of corporate responsibility results for each area,
with strategic initiatives defined, staffed, and well-funded.
WHY FOSTERING CORPORATE SOCIAL
RESPONSIBILITY AND GOOD BUSINESS ETHICS IS
IMPORTANT?
Reasons for organizations to pursue CSR goals and to promote a work
environment in which employees are encouraged to act ethically when
making business decisions:
1 - Gaining the goodwill of the community
2 - Creating an organization that operates consistently
3 - Fostering good business practices
4 - Protecting the organization and its employees from legal action
5 - Avoiding unfavorable publicity
1 - Gaining the goodwill of the community
• All successful organizations, including technology firms, recognize that
they must attract and maintain loyal customers.
• Philanthropy is one way in which an organization can demonstrate its values
in action and make a positive connection with its stakeholders.

• The goodwill that CSR activities generate can make it easier for
corporations to conduct their business. For example, a company
known for treating its employees well will find it easier to compete for
the top job candidates. On the other hand, businesses that are not
socially responsible run the risk of alienating their customer base.
2 - Creating an organization that operates
consistently
• Organizations strive to create a culture and adopt values to define a
consistent approach for dealing with the needs of everyone involved
(stakeholders, shareholders, employees, customers, suppliers, and
the community).
• Why is being constant so important?
• ensures that employees know what is expected of them and can employ the
organization’s values to help them in their decision-making.
• shareholders, customers, suppliers, and the community know what they can
expect of the organization—that it will behave in the future much as it has in
the past.
3 - Fostering Good Business Practices
• Good ethics can mean good business and improved profits.
• Companies that produce safe and effective products avoid costly
recalls and lawsuits.
• In Ethical companies:
• provide excellent service to retain their customers instead of losing them to
competitors.
• Develop and maintain strong employee relations and enjoy lower turnover
rates and better employee morale.
• Suppliers and other business partners place a priority on working with
companies that operate in a fair and ethical manner.
3 - Fostering Good Business Practices
• Bad ethics can lead to bad business results
• If the employees perceive a difference between their own values and those
stated or implied by an organization’s actions, the conflict can destroy
employee commitment to organizational goals and objectives, creates low
morale, fosters poor performance, erodes employee involvement in
organizational improvement initiatives, and builds indifference to the
organization’s needs.

• In conclusion, ethical companies tend to be more profitable over the

long term than unethical companies.
4 - Protecting the Organization and Its
Employees from Legal Action
• In a 1909 ruling, the U.S. Supreme Court established that an employer can
be held responsible for the acts of its employees even if the employees act
in a manner contrary to corporate policy and their employer’s directions.26
The principle established is called respondeat superior, or “let the master
answer.”
• A coalition of several legal organizations argues that organizations should
“be able to escape criminal liability if they have acted as responsible
corporate citizens, making strong efforts to prevent and detect misconduct
in the workplace.” One way to do this is to establish effective ethics and
compliance programs.
• However, some people argue that officers of companies should not be
given light sentences if their ethics programs fail to deter criminal activity
within their firms.
5 - Avoiding Unfavorable Publicity
• the public reputation of a company strongly influences:
• the value of its stock.
• how consumers regard its products and services
• the degree of oversight it receives from government agencies
• the amount of support and cooperation it receives from its business partners
• many organizations are motivated to build a strong ethics program to
avoid negative publicity and appeal to be more favourable.
HOW ORGANIZATIONS CAN IMPROVE THEIR
ETHICS
• 86% of the employees in companies with a well-implemented ethics
and compliance program are likely to perceive a strong ethical culture
within the company.
• A well-implemented ethics and compliance program and a strong
ethical culture can lead to:
• less pressure on employees to misbehave and a decrease in observed
misconduct.
• creates an environment in which employees are more comfortable reporting
instances of misconduct
HOW ORGANIZATIONS CAN IMPROVE THEIR
ETHICS
The characteristics of a successful ethics program:
• Employees are willing to seek advice about ethics-related issues.
• Employees feel prepared to handle situations that could lead to
misconduct.
• Employees are rewarded for ethical behavior.
• The organization does not reward success obtained through
questionable means.
• Employees feel positively about their company.
HOW ORGANIZATIONS CAN IMPROVE THEIR
ETHICS
HOW ORGANIZATIONS CAN IMPROVE THEIR
ETHICS
some of the actions corporations can take to improve business ethics:
1. Appoint a Corporate Ethics Officer.
2. Require the Board of Directors to Set and Model High Ethical
Standards.
3. Establish a Corporate Code of Ethics.
4. Require Employees to Take Ethics Training.
5. Create an Ethical Work Environment.
INCLUDING ETHICAL CONSIDERATIONS IN
DECISION MAKING
• The Decision-making process that generally flows when facing a
difficult decisions :
1 - Develop Problem Statement
• A problem statement is a clear, concise description of the issue that
needs to be addressed.

Good problem statement: Our product supply organization is

continually running out of stock of finished products, creating an out-
of-stock situation on over 15 percent of our customer orders, resulting
in over $300,000 in lost sales per month.
Poor problem statement: We need to implement a new inventory
control system. (This is a possible solution, not a problem statement.
Pursuing this course of action will surely be expensive and time
consuming and, may or may not, solve the underlying problem.)
2 - Identify Alternatives

• Brainstorming with others will increase your chances of identifying a

broad range of alternatives and determining the best solution.
• During any brainstorming process, try not to be critical of ideas, as
any negative criticism will tend to shut down the discussion, and the
flow of ideas will dry up. Simply write down the ideas as they are
suggested and ask questions only to gain a clearer understanding of
the proposed solution.
3 - Choose Alternative

• evaluate alternatives is based on numerous criteria, such as

effectiveness of addressing the issue, the extent of risk associated
with each alternative, cost, and time to implement.
• The alternative selected should be:
• ethically and legally defensible.
• be consistent with the organization’s policies and code of ethics
• take into account the impact on others
• provide a good solution to the problem
4 - Implement the Decision
• people tend to resist change. In fact, the bigger the change, the
greater is the resistance to it.
• A transition plan must be defined to explain to people how they will
move from the old way of doing things to the new way.
5 - Evaluate the Results
• monitor the results to see if the desired effect was achieved and
observe its impact on the organization and the various stakeholders.
• the proper alternative may have been selected, but it was
implemented in a poor fashion so the desired results were not
achieved. This may require redoing some of the implementation
steps.
ETHICS IN INFORMATION TECHNOLOGY
• In the midst of the many IT breakthroughs in recent years, the
importance of ethics and human values has been underemphasized.
• Some examples that raise public concern about the ethical use of
information technology:
• Many employees have their email and Internet access monitored while at
work.
• Millions of people have downloaded music and movies at no charge and in
apparent violation of copyright laws at tremendous expense to the owners of
those copyrights.
• Students around the world have been caught downloading material from the
web and plagiarizing content for their term papers.
Summary
• Organizations require successful ethics programs
• The corporate ethics officer ensures that ethical procedures are
installed and followed
• Managers’ behaviors and expectations can strongly influence
employees’ ethical behavior
• Most of us have developed a simple decision-making model that
includes five steps
• Ethical considerations must be incorporated into decision making
Key Terms
• Bathsheba syndrome—the moral corruption of people in power, which is often facilitated by a tendency for people to look the
other way when their leaders act inappropriately
• Code of ethics—a statement that highlights an organization’s key ethical issues and identifies the overarching values and principles
that are important to the organization and its decision making
• Common good approach—based on a vision of society as a community whose members work together to achieve a common set
of values and goals
• Corporate ethics officer (also called a corporate compliance officer)—a senior-level manager who provides an organization with
vision and leadership in the area of business conduct; ethics officers come from diverse backgrounds, such as legal staff, human
resources, finance, auditing, security, or line operations
• Corporate social responsibility (CSR)—the concept that an organization should act ethically by taking responsibility for the impact
of its actions on the environment, the community, and the welfare of its employees
• Ethics—a set of beliefs about right and wrong behavior within a society
• Fairness approach—focuses on how fairly actions and policies distribute benefits and burdens among people affected by the
decision
• Integrity—one of the cornerstones of ethical behavior; a person who acts with integrity acts in accordance with a personal code of
principles
• Law—a system of rules that tells us what we can and cannot do; laws are enforced by a set of institutions (the police, courts, law-
making bodies)
• Moral code—a set of rules that establishes the boundaries of generally accepted behavior
Key Terms (cont.)
• Morality—refers to social conventions about right and wrong that are so widely shared that they become the basis for an
established consensus
• Morals—one’s personal beliefs about right and wrong
• Problem statement—a clear, concise description of the issue that needs to be addressed in a decision-making process
• Sarbanes-Oxley Act of 2002—the goal of the bill was to renew investors’ trust in corporate executives and their firms’ financial
reports; the act led to significant reforms in the content and preparation of disclosure documents by public companies
• Social audit—an organization reviews how well it is meeting its ethical and social responsibility goals, and communicates its new
goals for the upcoming year
• Supply chain sustainability—a component of CSR that focuses on developing and maintaining a supply chain that meets the needs
of the present without compromising the ability of future generations to meet their needs
• Stakeholder—someone who stands to gain or lose, depending on how a situation is resolved; an organization’s stakeholders
include shareholders, employees, customers, suppliers, and the community
• Utilitarian approach—states that you should choose the action or policy that has the best overall consequences for all people who
are directly or indirectly affected
• Vice—a habit of unacceptable behavior
• Virtue—a habit that inclines people to do what is acceptable
• Virtue ethics approach—focuses on how you should behave and think about relationships if you are concerned with your daily life
in a community