Management Information Systems:

Managing the Digital Firm

Sixteenth Edition

Chapter 4

Ethical and Social

Issues in Information
Systems

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Learning Objectives
4.1 What ethical and social issues are raised by IS?

4.2 What principles for conduct can be used to guide ethical

decisions?

4.3 Why do IS technology and the Internet pose challenges to

the protection of individual privacy and intellectual
property?

4.4 How have IS affected laws for establishing accountability,

liability, and the quality of everyday life?

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 Ethical and Social Issues
• Web sites and invasive softwares track our search queries, the pages we
visit, the ads we click on, the videos we watch, the content we share, the
products we purchase, etc.

• Technology can be a double-edged sword:

– It can generate many benefits (by showing you ads relevant to your
interests)

– but it can also invade your privacy

• IS allow the collection and analyzis of data on a much larger scale than
ever before and using what we have learned about people in ways that
may be harmful to them. The following are some examples:
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 Ethical and Social Issues
• Some Auto insurance companies collect and analyze data about people
driving habits. Lower insurance rates are then given to those who don’t
drive late at night and don’t spend much time in their cars, thus
discriminating against poorer people who are more likely to work a late
shift and to have longer commutes to work.

• Some insurance companies determine health insurance rates based on

predictions of people life expectancy using data about buying habits,
personal and family medical histories, etc.

• Individuals might be subject to job discrimination, racial profiling, or higher

insurance rates because organizations have new tools to collect and
analyze huge quantities of data about them.
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 What is ethics ?
– Principles of right and wrong people use to make choices
to guide their behaviors
– Ethics is about individual choice: When faced with
alternative courses of action, what is the correct moral
choice?
– Right and Wrong change over time, place…

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 Information systems and ethics

• The development of IS has had a great impact on society raising new

ethical questions and challenges

• New opportunities for crime, new kinds of crimes

• IS can be used to achieve social progress, but also to commit crimes and
threaten social values.

• As a manager, you will need to be sensitive to both the positive and

negative impacts of information systems for your firm, employees, and
customers. You will need to learn how to resolve ethical dilemmas
involving information systems.

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 A Model for Thinking About Ethical,
Social, and Political Issues
• Society as a calm pond

• IT 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 protocols, 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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 The Moral Dimensions of the Information Age

1. Information rights and obligations: what rights do individuals possess

with respect to themselves? What do they have a right to protect?

2. Property rights: How will traditional intellectual property rights be protected

in a digital society in which tracing and accounting for ownership are difficult?

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 an information society?

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 Technology trends affecting ethics
• IoT devices can collect sensitive data about users daily routines, location,
and personal preferences, which can be exploited if not properly secured.

• Artificial intelligence and machine learning raise questions about how

to ensure that these systems are transparent, unbiased, and accountable.

• Big data: The collection and analysis of large amounts of data that can be
used to manipulate and influence people. For example, companies can
use data analytics to target vulnerable populations for advertising or
political propaganda.

• Blockchain: This technology that is difficult to regulate or monitor could be

used to receive payments for illegal activities.

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 Technology trends affecting ethics

• Advances in Data Analysis Techniques

– Online profiling: using data gathered from an individual's online

behavior and activity to create a profile that can be used for various
purposes. Online profiling is one of the most controversial computer-
related ethical issues today.

– Nonobvious relationship awareness (NORA): Combining data from

multiple sources using data analysis and AI to identify hidden
connections. NORA is often used in fields such as law enforcement,
national security, and marketing to help identify patterns and make
connections that might not be apparent to human analysts.

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Figure 4.2 Nonobvious Relationship
Awareness (NOR A)

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 Responsibility, Accountability, and Liability
• Responsibility

– Being in charge of something, such as a task or a project. It is the

obligation to take care of something or to perform a duty.
• Accountability

– Taking ownership and being answerable for one's actions

• Liability

− The legal obligation to make compensation for harm or damage caused to

someone or something
• Due process:

a process in which laws are known and understood, and there is an ability
to appeal to higher authorities to ensure that the laws are applied correctly.
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 Ethical Analysis
• Ethical analysis is the process of examining and evaluating an ethical
issue or dilemma in a structured and systematic way. It is five-steps
process:

1. Identify and clearly describe the facts: Find out who did what to
whom, and where, when, and how

2. Define the conflict or dilemma and identify the higher-order

values involved (e.g., freedom, privacy, protection of property).

3. Identify the stakeholders: players who have an interest in the

outcome

4. Identify the options that you can reasonably take.

5. Identify the potential consequences: Some options may be ethically

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correct but disastrous from other points of view
 Ethical Principles (1 of 2)
• Once your analysis is complete, what ethical approaches or rules should
you use to make a decision?

• Although you are the only one who can decide which among many ethical
principles you will follow, and how you will prioritize them, it is helpful to
consider some ethical approaches .

• 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

• Descartes’ rule of change (Slippery Slope Rule): If an action cannot be

taken repeatedly, it is not right to take at all
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 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 cost, even if it may
not have the highest potential for benefit or gain.

• “No Free Lunch” Rule

– Assume that virtually all tangible and intangible objects are owned by
someone unless there is a specific declaration otherwise. This means
that if someone creates or acquires an object, they have legal
ownership over it, and others are not allowed to use or dispose of it
without their permission.
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 Real-World Ethical Dilemmas
• One set of interests pitted against another

• Right and wrong are not clearly defined

• 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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 How IS affected Information Rights ?
• Privacy: Claim of individuals to be left alone, free from surveillance or
intrusion from individuals or organizations, including the state. Claim to be
able to control information about yourself .

• Information technology and systems threaten individual claims to privacy

by making the invasion of privacy cheap, profitable, and effective.

• In many countries, privacy law is based on a regime called Fair

Information Practices (FIP)

• FIP: a set of principles developed to guide the collection, use, and

disclosure of personal information.

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 Internet challenges to privacy: tools for tracking
online behavior
• Cookies: small text files stored on visitor’s hard drive by a website. They
contain information about user's browsing history and preferences, and
can be used to memorize user login information, track user behavior, and
deliver targeted advertising.

• Web beacons: small, invisible images that are embedded in web pages or
emails. When a user opens the page or email, the web beacon sends
information back to the server, allowing the sender to track user behavior,
such as whether the email was opened or a specific link was clicked.

• Spyware: a malicious software that monitor a user's computer activities

without their knowledge or consent (tracking browsing habits, stealing
personal information, monitoring keystrokes…)
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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 to protect privacy
• Besides legislations, technical solutions to protect privacy include:

– Secure Email Services such as ProtonMail, Tutanota, and Hushmail

offer end-to-end encryption

– Anonymity tools such as VPN, proxy servers, etc.

– Anti-spyware tools

– Built-in Browser features such as “Incognito mode”; “Do not track”

options; “No downloads”; “Mask location”; “disable extensions”

• Even after selecting the Do Not Track option, websites are not legally
obligated to honor their visitors’ requests not to be tracked.

• Overall, technical solutions have failed to protect users from being tracked
from one site to another
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 How IS affected Property Rights ?

• Intellectual property: any tangible or intangible product of the mind

created by individuals or corporations.

• It is protected in four main ways:

– Copyright: image, writing or a musical composition

– Patents: grants the owner an exclusive monopoly on the ideas behind

an invention (device or a process) for 20 years

– Trademarks: logo or name

– Trade secret: algorithm, formula, software…

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 How IS affected Property Rights ?
• New technologies and digitalization brought new challenges to existing
laws that protect intellectual property. Before internet, copies of software,
books, or films had to be stored on physical media (paper, computer disk,
videotape), creating some hurdles to distribution. With internet, information
can be more widely reproduced and distributed.

• Digital media different from physical media:

– Ease of replication

– Ease of transmission (networks, Internet)

– Ease of alteration

– Compactness

– Difficulties in establishing uniqueness

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 How IS affected laws for establishing
accountability and liability?
• IS have changed the way businesses operate and interact with their
stakeholders, which has led to new legal issues related to accountability
and liability. These issues have emerged as a result of the vast amounts
of data that organizations store and the widespread use of digital
technologies.

• IS and new technologies has also enabled the creation of new types of
businesses, such as those based on the sharing economy,
crytptoccurency and online marketplaces. These new business models
have raised questions about liability and responsibility for the actions of
users on their platforms.

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 How IS affected laws for establishing
accountability and liability?
• When a software is part of a machine, and the machine hurts someone
physically or economically. Who is liable the producer of the software or
the manufacturer of the machine ? Should Facebook or Twitter be held
liable and accountable for the posting of pornographic material or racial
insults, or should they be held harmless against any liability for what
users post ?

• In general, it is very difficult to hold software producers liable as

softwares are considered to be like books, regardless of the physical or
economic harm that results.  In the United States, with few exceptions,
websites are not held liable for content posted on their sites regardless of
whether it was placed there by the website owners or users.
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 How IS affected System Quality ?
• Developping a flawless software is almost impossible and economically
unfeasible as it involves constant testing and debugging, which can be
time-consuming and costly. Even after testing and debugging, new bugs
and vulnerabilities can arise.

• What is an acceptable, technologically feasible level of system quality?

Does it depend on the particular product? For example, distinguish
between software used by air traffic controllers and software used for
word processing.

• The gray area is that some system errors are foreseeable and correctable
only at very great expense, an expense so great that pursuing this level of
perfection is not feasible economically. So in gray areas, what should
organizations do?.
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