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Ethics

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Ethics

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  1. Ethics Orfalea College of Business BUS 494 Small Business Information Systems Professor Barry Floyd

  2. OCOB Mission Statement • The Orfalea College of Business challenges highly motivated students to become tomorrow's socially responsible business leaders through a learn-by-doing, technology-oriented education.

  3. Objectives • Develop a sense of ethical behavior in the world of information systems • Understand technology forces raising ethical issues • Understand role of organizational leadership with respect to ethical behavior within an organization

  4. Agenda • Examples … • Hiring • Misdirected Information • Definitions • Two Perspectives: Frameworks • Is Good Ethics Good Business • Are you rewarded for acting ethically in business? • Longitudinal Study of ethics • Ensuring an Ethical Organization • Technology trends raising ethical issues • Flower shop scenario • Federal Privacy Laws • Responsibilities for Maintaining Privacy

  5. Agenda • Examples … • Hiring • Misdirected Information • Definitions • Two Perspectives: Frameworks • Is Good Ethics Good Business • Are you rewarded for acting ethically in business? • Longitudinal Study of ethics • Ensuring an Ethical Organization • Technology trends raising ethical issues • Flower shop scenario • Federal Privacy Laws • Responsibilities for Maintaining Privacy

  6. Scenario One • Jane has been operating a consulting business for about a year … • What should Jane do? Why? Ref: http://www.smallbusinessnotes.com/operating/leadership/ethics.html

  7. Three Questions to Ask Yourself • Kenneth Blanchard and Norman Vincent Peale, authors The Power of Ethical Management suggests that you ask yourself three questions: • Is it legal? • Will you be violating any criminal laws, civil laws, or company policies by engaging in this activity? • Is it balanced? • Is it fair to all parties concerned in the short-term as well as the long-term? Is this a win-win? • Is it right? • How does this decision make you feel about yourself? Are you proud of yourself for making this decision? Would you like others to know the decision you did?

  8. Agenda • Examples … • Hiring • Misdirected Information • Definitions • Two Perspectives: Frameworks • Is Good Ethics Good Business • Are you rewarded for acting ethically in business? • Longitudinal Study of ethics • Ensuring an Ethical Organization • Technology trends raising ethical issues • Flower shop scenario • Federal Privacy Laws • Responsibilities for Maintaining Privacy

  9. Misdirected Information • What are the two questions a business professional may ask while on an elevator? • Ethics of Misdirected Information Use … Ref: Experiencing MIS, David Kroenke, Pearson/Prentice Hall, 2008.

  10. Situation A • Suppose you are buying a condo and you know that at least one other party is bidding against you. While agonizing over your best strategy, you stop at a local Starbucks. As you sip your latte, you overhear a conversation at the table next to yours. Three people are talking so loudly that it is difficult to ignore them, and you soon realize that they are the real estate agent and the couple who is competing for the condo you want. They are preparing their offer. Should you listen to their conversation? If you do, do you use the information you hear to your advantage?

  11. Situation B • Consider the same situation from a different perspective – instead of overhearing the conversation, suppose you receive that same information in an email. Perhaps an administrative assistant at the agent’s office confuses you and the other customer and mistakenly sends you the terms of the other party’s offer. Do you read that email? If so, do you use the information that you read to your advantage?

  12. Situation C • Suppose that you sell computer software. In the midst of a sensitive price negotiation, your customer accidentally sends you an internal email that contains the maximum amount that the customer can pay for your software. Do you read that email? Do you use that information to guide your negotiating strategy? What do you do if your customer discovers that the email may have reached you and asks: “Did you read my email?” How do you answer?

  13. Situation D • Suppose a friend mistakenly sends you an email that contains sensitive personal medical data. Further, suppose you read the email before you know what you’re reading and you’re embarrassed to learn something very personal that truly is none of your business. Your friend asks you, “Did you read that email?” How do you respond?

  14. Situation E • Finally, suppose that you work as a network administrator and your position allows you unrestricted access to the mailing lists for your company. Assume that you have the skill to insert your email address into any company mailing list without anyone knowing about it. You insert your address into several lists and, consequently, begin to receive confidential email that no one intended for you to see. One of those emails indicates that your best friend’s department is about to be eliminated and all its personnel fired. Do you forewarn your friend?

  15. Rules? • Legal community … • Use of any misdirected information is unethical and court judgments can be lost by a party that uses such information • Legal ethics state that if a lawyer mistakenly receives a document intended for the other side, the lawyer is forbidden to use the contents • Should business professionals have a lower standard? • What policies / procedures should your company have?

  16. KPMG – Email addendum • The information in this email is confidential and may be legally privileged. It is intended solely for the addressee. Access to this email by anyone else is unauthorized. • If you are not the intended recipient, any disclosure, copying, distribution or any action taken or omitted to be taken in reliance on it, is prohibited and may be unlawful. When addressed to our clients any opinions or advice contained in this email are subject to the terms and conditions expressed in the governing KPMG client engagement letter.

  17. Agenda • Examples … • Hiring • Misdirected Information • Definitions • Two Perspectives: Frameworks • Is Good Ethics Good Business • Are you rewarded for acting ethically in business? • Longitudinal Study of ethics • Ensuring an Ethical Organization • Technology trends raising ethical issues • Flower shop scenario • Federal Privacy Laws • Responsibilities for Maintaining Privacy

  18. Definitions • Ethical Behavior • “Conforming to accepted standards,” “Consistent with agreed principles of correct moral conduct” (Ref: Microsoft Encarta) • Ethics • Principles and standards that guide our behavior toward other people • “A system of moral principles governing the appropriate conduct for an individual or group” (Ref: Microsoft Encarta) • What system of moral principles governs conduct for business professionals? • What drives you? Are there any ‘codes’ you live by? Where does your moral compass come from? What do you consider when you take an action that is not clearly black and white?

  19. Agenda • Examples … • Hiring • Misdirected Information • Definitions • Two Perspectives: Frameworks • Is Good Ethics Good Business • Are you rewarded for acting ethically in business? • Longitudinal Study of ethics • Ensuring an Ethical Organization • Technology trends raising ethical issues • Flower shop scenario • Federal Privacy Laws • Responsibilities for Maintaining Privacy

  20. Two perspectives • Ethical principles • Influences that might impact your decision

  21. Ethical Principles • Do unto to others as you would have them do unto you (Golden Rule) • If an action is not right for everyone to take, then it is not right for anyone (Immanuel Kant’s Categorical Imperative) • If an action cannot be taken repeatedly, it is not right to take it at all (Descartes’ rule of change) • Take the action that achieves the higher or greater value (Utilitarian Principle) • Take the action that produces the least harm or the least potential cost (Risk Aversion Principle) • Assume that virtually all tangible and intangible objects are owned by someone else unless there is a specific declaration otherwise (ethical ‘no free lunch’ rule) • Ref: MIS Managing the Digital Firm by Laudon and Laudon, 10th Edition, Pearson/PrenticeHall, 2007.

  22. Influences to Ethical Behavior • Consequences • How much or how little benefit or harm will come from a particular decision • Society’s opinion • What is your perception of what society really thinks of your intended action • Likelihood of effect • What is the probability of the harm or benefit that will occur if you take action • Time to consequences • What length of time will it take for the benefit or harm to take effect • Relatedness • How much do you identify with the person or persons who will receive the benefit or suffer the harm • Reach of result • How many people will be affected by your action

  23. Influences to Ethical Behavior How do these apply to the hiring situation we first discussed? • Consequences • How much or how little benefit or harm will come from a particular decision • Society’s opinion • What is your perception of what society really thinks of your intended action • Likelihood of effect • What is the probability of the harm or benefit that will occur if you take action • Time to consequences • What length of time will it take for the benefit or harm to take effect • Relatedness • How much do you identify with the person or persons who will receive the benefit or suffer the harm • Reach of result • How many people will be affected by your action

  24. Agenda • Examples … • Hiring • Misdirected Information • Definitions • Two Perspectives: Frameworks • Is Good Ethics Good Business • Are you rewarded for acting ethically in business? • Longitudinal Study of ethics • Ensuring an Ethical Organization • Technology trends raising ethical issues • Flower shop scenario • Federal Privacy Laws • Responsibilities for Maintaining Privacy

  25. Is good ethics good business? • Article reports a study that compared business stock performance between two groups • Those known for acting ethically and everyone else • 6.2% average increase in stock value for a 40 year period overall compared with 11.3% increase for those identified as ‘ethical’ • Note: Should act ethically even if not good for business? • http://www.ethics.org.au/things_to_read/articles_to_read/business/article_0130.shtm

  26. Are you rewarded for acting ethically in business? • Ethical Conduct Not Rewarded in Business, Say Human Resources Professionals: Professionals Feel Growing Pressure to Compromise Standards • Amid numerous recent corporate ethics violations, a survey in April 2003 indicates that nearly half of human resource (HR) professionals believe ethical conduct is not rewarded in business today • Troubling figures show that during the last five years, HR professionals feel increasingly more pressure to compromise their organizations' ethics standards; however, they also say they personally observed significantly less misconduct in the workplace. • http://www.centeronline.org/knowledge/article.cfm?ID=2554

  27. Are you rewarded for acting ethically in business? • Twenty-four percent of HR professionals feel pressured to compromise ethics standards all the time, fairly often, or periodically. In comparison, 13 percent indicated they felt pressured in 1997. • Forty-nine percent say that ethical conduct is not rewarded in business today. • The top five pressures on HR professionals to compromise an organization's ethical standards are • (1) needing to follow the boss's directives (49 percent), • (2) meeting overly aggressive business or financial objectives (48 percent), • (3) helping the organization survive (40 percent), • (4) meeting schedule pressures (35 percent), and • (5) wanting to be a team player (27 percent). • Seventy-nine percent of respondent organizations have written ethics standards.HR professionals say that 70 percent of senior management and 72 percent of CEOs are committed to acting ethically, up slightly from 68 percent and 69 percent, respectively, in 1997.

  28. Are you rewarded for acting ethically in business? • Eighty-three percent of HR professionals indicate that employees follow written ethics standards all the time or often. • Eighty-five percent of respondents say that senior management supports HR professionals' adherence to written ethics standards of their organizations. • Sixty-nine percent of HR respondents strongly agree or agree that HR is a primary ethics resource in the organization, but 40 percent say that HR is not part of the ethics infrastructure and is only tasked with cleaning up ethics violations. • Thirty-five percent of HR professionals often or occasionally personally observed ethics misconduct in the last 12 months, down from 53 percent in 1997. • Types of misconduct most commonly observed were misreporting of hours worked, an employee lying to a supervisor, and management lying to employees, customers, vendors, or the public.

  29. Agenda • Examples … • Hiring • Misdirected Information • Definitions • Two Perspectives: Frameworks • Is Good Ethics Good Business • Are you rewarded for acting ethically in business? • Longitudinal Study of ethics • Ensuring an Ethical Organization • Technology trends raising ethical issues • Flower shop scenario • Federal Privacy Laws • Responsibilities for Maintaining Privacy

  30. What was your average score? • Survey of business professionals on ‘ethical vignettes’ • Ethical Vignettes included …

  31. Outcome of the survey Survey Year Mean Score Sample Size --------------- --------------- --------------- 2001 2.40 1227 1993 2.49 1870 1985 2.69 2267 Becoming more ethical!!

  32. Agenda • Examples … • Hiring • Misdirected Information • Definitions • Two Perspectives: Frameworks • Is Good Ethics Good Business • Are you rewarded for acting ethically in business? • Longitudinal Study of ethics • Ensuring an Ethical Organization • Technology trends raising ethical issues • Flower shop scenario • Federal Privacy Laws • Responsibilities for Maintaining Privacy

  33. Staying Out of the Headlines: Ensuring an Ethical Organization • Two strategies • Ensuring ethical leadership • Being perceived as an ethical leader requires more than simply being an ethical person • Leading by example is only effective when the example is observable • Ethical leaders make the connection between their decisions and their values evident. • Establishing ethical support systems • An ethical organizational climate and culture rest on its organization's mission, vision, and values statements as its ethical bedrock.

  34. Motorola’s Code of Business Conduct "The Code of Business reaffirms what each Motorola employee stands for: Doing the right thing.  Every day.  No excuses." Ed Zander                                                          Chairman and Chief Executive Officer Our Key Beliefs - The Way We Will Always Act • Uncompromising Integrity • Constant Respect for People http://www.motorola.com/content/0,,75-107,00.html#intro

  35. Agenda • Examples … • Hiring • Misdirected Information • Definitions • Two Perspectives: Frameworks • Is Good Ethics Good Business • Are you rewarded for acting ethically in business? • Longitudinal Study of ethics • Ensuring an Ethical Organization • Technology trends raising ethical issues • Flower shop scenario • Federal Privacy Laws • Responsibilities for Maintaining Privacy

  36. Key Technology Trends • Key Technology Trends that raise ethical issues • Computer power doubles every 18 months • More organizations depend on computers systems for critical operations • Data storage costs rapidly declining • Organizations can easily maintain detailed databases on individuals • Data analysis advances • Companies can analyze vast quantities of data gathered on individuals to develop detailed profiles of individual behavior • Networking advances and the internet • Copying data from one location to another and accessing personal data from remote locations are much easier • Ref: MIS Managing the Digital Firm by Laudon and Laudon, 10th Edition, Pearson/PrenticeHall, 2007.

  37. Five moral dimensions of the information age Ken Laudon suggests that the ethical issues from the growth / impact of technology have the following ‘moral dimensions’ to them • Information rights and obligations • Privacy … opt in, opt out • Property rights and obligations • Patents, intellectual property, … • Accountability and control • Who is really accountable when a system does harm? • System quality • Can an IS system ever be free from defects? • Quality of life • Is there a balance that is being upset through the use of Information Technology? • Ref: MIS Managing the Digital Firm by Laudon and Laudon, 10th Edition, Pearson/PrenticeHall, 2007.

  38. Agenda • Examples … • Hiring • Misdirected Information • Definitions • Two Perspectives: Frameworks • Is Good Ethics Good Business • Are you rewarded for acting ethically in business? • Longitudinal Study of ethics • Ensuring an Ethical Organization • Technology trends raising ethical issues • Flower shop scenario • Federal Privacy Laws • Responsibilities for Maintaining Privacy

  39. What would you do? • You have access to the sales and customer information in a flower shop. You discover that the boyfriend of a woman you know is sending roses to three other women on a regular basis. The woman you know is on the flower list, but she believes that she’s the only woman in his romantic life. You really think that you should tell the woman. Your dilemma is that you have a professional responsibility to keep the company’s information private. However you also believe that you have a responsibility to the woman. Do you tell her?

  40. Additional facts • The woman is your sister

  41. Additional Facts • The man is your brother

  42. Additional Facts • The woman is about to give the man her life savings as a down payment on a house in the belief that they will soon be married.

  43. Additional facts • The woman is already married.

  44. Bork’s Law • Bork was nominated to the Supreme Court • A reporter went to is video rental store and asked about what movies Bork was renting. • Result: • Video Privacy Protection Act of 1988

  45. Agenda • Examples … • Hiring • Misdirected Information • Definitions • Two Perspectives: Frameworks • Is Good Ethics Good Business • Are you rewarded for acting ethically in business? • Longitudinal Study of ethics • Ensuring an Ethical Organization • Technology trends raising ethical issues • Flower shop scenario • Federal Privacy Laws • Responsibilities for Maintaining Privacy

  46. Federal Privacy Laws in the US • Freedom of information act of 1996 • Privacy Act of 1974 • Electronic Communications Privacy Act of 1986 • Computer matching and privacy protection act of 1988 • Computer security act of 1987 • Driver’s privacy protection act of 1994 • E-Government act of 2002

  47. Fair Information Practices (FIP) Most American and European privacy law is based on a regime called Fair Information Practices first defined in a report written in 1973 by a government advisory committee: • Notice / awareness • Web sites must disclose info practices • Choice / consent • Consumers can choose how information will be used for secondary purposes • Access / participation • Consumers should be able to review and contest accuracy and completeness • Security • Data collectors must take responsible steps to assure consumer info is accurate and secure • Enforcement • Must be in place a mechanism to enforce FIP principles.

  48. Agenda • Examples … • Hiring • Misdirected Information • Definitions • Two Perspectives: Frameworks • Is Good Ethics Good Business • Are you rewarded for acting ethically in business? • Longitudinal Study of ethics • Ensuring an Ethical Organization • Technology trends raising ethical issues • Flower shop scenario • Federal Privacy Laws • Responsibilities for Maintaining Privacy

  49. Responsibility for maintaining privacy • The responsibility of • Employers • Service and information providers • Mailing list operators, database managers, and other information collectors • Software developers • Individuals • Governments http://www.cpsr.net/issues/privacy/epp

  50. The Responsibilities of Employers • Each employer must provide clear policies regarding the privacy implications of the computing resources used in the workplace. These policies should explicitly describe: • acceptable use of electronic mail and computer resources, including personal use; • practices that may be used to enforce these policies, such as reading of electronic mail or scanning of hard disks; • and penalties for non-compliance with these policies. • 2. Employees should be informed of any electronic monitoring systems that might be used on workplace computers.