Ethics in Information

Technology, Fourth Edition

Chapter 10
Ethics of IT Organizations

Objectives
As you read this chapter, consider the following
questions:
What are contingent workers, and how are they
employed in the information technology industry?
What key ethical issues are associated with the use
of contingent workers, including H-1B visa holders
and offshore outsourcing companies?
What is whistle-blowing, and what ethical issues are
associated with it?

Ethics in Information Technology, Fourth Edition

Objectives (contd.)
What is an effective whistle-blowing process?
What measures are members of the electronics
manufacturing industry taking to ensure the ethical
behavior of the many participants in their long and
complex supply chains?
What is green computing, and what are organizations
doing to support this initiative?

Ethics in Information Technology, Fourth Edition

Key Ethical Issues for Organizations

Ethical topics are pertinent to organizations in the
IT industry and organizations that make use of IT

Use of nontraditional workers

Whistle-blowing
Green computing
ICT code of ethics

Ethics in Information Technology, Fourth Edition

The Need for Nontraditional Workers

Bureau of Labor Statistics (BLS) forecast
Network systems and data communications analysts
will be 2nd fastest growing occupation from 20082018
Employment of computer software engineers will
grow 34%

Concern about a shortfall in the number of U.S.

workers to fill these positions
Several IT positions in the top-ten paid majors for
2010-2011 bachelors degree graduates
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The Need for Nontraditional Workers

(contd.)
Long-term shortage of IT workers
Employers turning to nontraditional sources

Sources include:
Contingent workers
H-1B workers
Outsourced offshore workers

Ethical decisions about whether to:

Recruit new/more workers from these sources
Develop their own staff to meet their needs
Ethics in Information Technology, Fourth Edition

Contingent Workers
Contingent work is a job situation in which an
individual does not have an explicit or implicit
contract for long-term employment
Contingent workers include:

Independent contractors
Temporary workers through employment agencies
On-call or day laborers
On-site workers provided by contract firms

Needed for pronounced IT staffing fluctuations

Workers hired for the life of the project only
Ethics in Information Technology, Fourth Edition

Contingent Workers (contd.)

Sources
Temporary agencies
Employee leasing
Consulting organizations

Firms that provide temporary help:

Recruit, train, and test their employees in a wide
range of job categories and skill levels
Assign them to clients

Ethics in Information Technology, Fourth Edition

Ethics in Information Technology, Fourth Edition

Contingent Workers (contd.)

Employee leasing
Business outsources all or part of its workforce to a
professional employer organization
Subject to special regulations regarding workers
compensation and unemployment insurance

Coemployment relationship
Two employers have actual or potential legal rights
and duties with respect to the same employee or
group of employees

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Contingent Workers (contd.)

Advantages of using contingent workers
Business does not pay for benefits
Can continually adjust the number of contingent
workers to stay consistent with its business needs
Does not customarily incur training costs

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Contingent Workers (contd.)

Disadvantages of using contingent workers
Workers may lack a strong relationship with the firm
Low commitment to the company and its projects
High turnover rate

Workers gain valuable practical experience working

within a companys structure and culture
Lost when workers depart at the projects completion

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Contingent Workers (contd.)

When deciding to use contingent workers:
Recognize the trade-off between:
Completing a single project quickly and cheaply
Developing people in the organization

When staffing is truly temporary:

Use of contingent workers is a good approach

Think twice about using contingent workers:

When they are likely to learn corporate processes and
strategies that are key to the companys success
Workers next assignment may be with major
competitor
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Contingent Workers (contd.)

Deciding when to use contingent workers
Can raise ethical and legal issues
Potential liability for:

Withholding payroll taxes

Payment of employee retirement benefits
Payment of health insurance premiums
Administration of workers compensation

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Contingent Workers (contd.)

Deciding when to use contingent workers (contd.)
Can be viewed as permanent employees by:

Internal Revenue Service

Labor Department
State workers compensation agency
State unemployment agencies

Vizcaino v. Microsoft lawsuit

Deciding factor is degree of control company
exercises over employees
Employers must exercise care in the treatment of
contingent workers
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Ethics in Information Technology, Fourth Edition

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H-1B Workers
Temporary work visa
U.S. Citizenship and Immigration Services (USCIS)
For people who work in specialty occupations

H-1B workers
Meet critical business needs
Have essential technical skills and knowledge not
readily found in the U.S.
Employers must pay H-1B workers the prevailing
wage for the work being performed

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H-1B Workers (contd.)

Maximum continuous period of six years
After six years, the foreign worker must remain
outside the United States for one year before
another H-1B petition can be approved

Continued use of H-1B workers

Symptom of a larger, more fundamental problem
U.S. not developing sufficient IT employees

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H-1B Workers (contd.)

Top five outsourcing countries

India
China
Canada
Philippines
Korea

Federal cap of 65,000 for number of H-1B visas

Applies only to certain IT professionals
Large number of workers are exempt from cap
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H-1B Workers (contd.)

English as a second language
Workers who are not fluent in English:

May find it difficult and uncomfortable to participate

May create their own cliques
May stop trying to acclimate
Can hurt a project teams morale and lead to division

Managers and coworkers should:

Strive to help improve H-1B workers English skills
and cultural understanding
Be sensitive to workers heritage and needs
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H-1B Workers (contd.)

H-1B application process
Employer making job offer must also offer
sponsorship
Application has two stages
Labor Condition Attestation (LCA)
H-1B visa application

If H-1B are more than 15% percent of companys

workforce:
Must prove that it first tried to find U.S. workers
Must prove not hiring H-1B after laying off similar U.S.
worker
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H-1B Workers (contd.)

American Competitiveness in the Twenty-First
Century Act (2000)
Allows current H-1B holders to start working for
employers as soon as their petitions are filed

Using H-1B workers instead of U.S. workers

Good for short-term hiring
Long-term hiring
Lessens incentive to educate and develop U.S.
workforces
Does nothing to develop strong core of permanent
U.S. IT workers needed in future
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H-1B Workers (contd.)

Potential exploitation of H-1B workers
Salary abuse by unethical companies
Some H1-B workers are paid $10,000 to $30,000
less than U.S. workers in the same job
Visa Reform Act (2004)
Defined a modified wage-rate system

At end of the six-year visa term:

If no green card, firm loses worker
Suddenly unemployed worker must return home

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B - 1 Visa Controversy
B-1 visitor visa for people who wish to enter U.S.
temporarily:
For pleasure or medical treatment
To travel for short periods of time to consult with
business associates; attend convention or
conference; negotiate a contract; or install or
maintain machinery

B-1 visa faster, easier, and cheaper to obtain

Lot of gray area in the use of B-1 visas

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Outsourcing
Outsourcing
Approach to meeting staffing needs
Long-term business arrangement
Company contracts with an outside organization that
has expertise in providing a specific function

Rationale

Coemployment legal problems are minimal

Lower costs
Obtain strategic flexibility
Keep staff focused on core competencies

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Offshore Outsourcing
Variation of outsourcing
Services provided by an organization whose
employees are in a foreign country

Companies reduce labor costs

Increasing in IT industry
As key processes move offshore, U.S. IT providers
are forced to lower prices
Common to use offshore outsourcing for major
programming projects
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Offshore Outsourcing (contd.)

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Offshore Outsourcing (contd.)

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Offshore Outsourcing (contd.)

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Offshore Outsourcing (contd.)

Pros and cons of offshore outsourcing
Low wages
Demand for offshoring driving up salaries

Dramatically speeds up development efforts

Make progress on a project around the clock

Can also result in new expenses

Additional time to select an offshore vendor
Additional costs for travel and communications

Same ethical issues as H1-B and contingent workers

Difficulty of communications over long distances and
differences in culture and language
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Offshore Outsourcing (contd.)

Strategies for successful offshore outsourcing
Expertise in technologies involved in the project
Project manager speaks native language of
employer
Large staff available
State-of-the-art telecommunications setup
High-quality on-site managers and supervisors

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Whistle-Blowing
Effort to attract public attention to a negligent,
illegal, unethical, abusive, or dangerous act by a
company
Whistle-blower

Usually has personal or special knowledge

Risks own career
Might even affect lives of friends and family
Must choose between protecting society and
remaining silent

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Whistle-Blowing (contd.)
Protection laws allow employees to alert authorities
to employer actions that are unethical, illegal, or
unsafe or that violate specific public policies
No comprehensive federal law
Each law has different:
Filing provisions
Administrative and judicial remedies
Statutes of limitations

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Whistle-Blowing (contd.)
False Claims Act (Lincoln Law)
Enacted during the Civil War
Enticed whistle-blowers to come forward
Offered a share of the money recovered

Qui tam provision allows private citizen to file in

name of government
Violators are liable for three times the dollar
amount the government is defrauded
Provides strong whistle-blower protection
Complexity requires advice of an attorney
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Whistle-Blowing (contd.)
Whistle-blower protection for private-sector workers
Many states, not all, have laws that prevent workers
from being fired because of an employees
participation in protected activities

Whistle-blowers can file claims against their

employers for retaliatory termination
Whistle-blowers are entitled to jury trials
If successful at trial, can receive punitive damage
awards

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Whistle-Blowing (contd.)
Dealing with a whistle-blowing situation

Assess the seriousness of the situation

Begin documentation
Attempt to address the situation internally
Consider escalating the situation within the company
Assess implications of becoming a whistle-blower
Use experienced resources to develop action plan
Execute the action plan
Live with the consequences

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Green Computing
To manufacture truly green products, companies
must:

Produce product that requires less electricity

Reduce the amount of hazardous materials used
Increase amount of reusable or recyclable materials
Help consumers dispose of their products in an
environmentally safe manner at the end of the
products useful life

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Green Computing (contd.)

Personal computers and cell phones contain
thousands of components composed of many
different materials
Some harmful to humans and environment
Workers along the entire supply chain at risk
Users can also be exposed to these materials

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Green Computing (contd.)

EPEAT (Electronic Product Environmental
Assessment Tool)
Enables purchasers to evaluate, compare, and
select electronic products
Based on a total of 51 environmental criteria
Products are ranked in three tiers of environmental
performance

European Restriction of Hazardous Substances

Directive
Restricts use of many hazardous materials in
computer manufacturing
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Green Computing (contd.)

How to safely dispose of obsolete computers
Many states have recycling programs
Some manufacturers have developed programs

Greenpeace environmental activist organization

Issues quarterly ratings of manufacturers according
to the manufacturers policies on toxic chemicals,
recycling, and climate change
Manufacturers have long way to go to meet the high
standards

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ICT Industry Code of Conduct

Electronic Industry Citizenship Coalition (EICC)
Promotes common code of conduct for ICT industry
Focuses on the areas of:
Worker safety and fairness
Environmental responsibility
Business efficiency

Coalition membership is voluntary

Code of conduct defines performance, compliance,

auditing, and reporting guidelines across five areas
of social responsibility
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ICT Industry Code of Conduct (contd.)

Guiding principles of social responsibility
Labor
Must uphold the human rights of workers

Health and safety

Must provide safe and healthy work environment

Environment
Adverse effects minimized

Management system
Ensures compliance with code

Ethics
Must uphold the highest standards of ethics
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Summary
Contingent workforce includes:

Independent contractors
Temporary workers through employment agencies
On-call or day laborers
On-site workers provided by contract firms

Outsourcing
Long-term business arrangement
Contract for services with outside organization
Expertise in providing a specific function
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Summary (contd.)
Whistle-blowing
Effort to attract public attention to negligent, illegal,
unethical, abusive, or dangerous acts by company
Whistle-blowing process

Assess the seriousness of the situation

Begin documentation
Attempt to address the situation internally
Consider escalating the situation within the company
Assess the implications of becoming a whistle-blower
Use experienced resources to develop an action plan
Execute the action plan
Live with the consequences

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Summary (contd.)
Green computers
Use less electricity
Include fewer hazardous materials
Contain reusable or recyclable material

Manufacturers must help consumers:

Dispose of products in an environmentally safe
manner at the end of the products useful life

EPEAT (Electronic Product Assessment Tool)

Purchasers can evaluate, compare, and select
Based on 51 environmental criteria
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