MANAGEMENT INFORMATION SYSTEMS CHAPTER 15 SOCIAL, ETHICAL AND LEGAL ISSUES Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 15-1 SOCIAL, ETHICAL AND LEGAL ISSUES • IT is influencing societies across the globe • Despite its benefits, there are also a number of negative social impacts, such as: - Loss of personal privacy and identity theft Increased intellectual property violations - E-mail spam - Computer viruses and worms that destroy data on personal as well as corporate computers Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 15-2 THE LEGAL ENVIRONMENT • Purpose of Legislation - To constrain behavior within a society so that there is minimal harm to its members and its needs are met - IT is evolving so rapidly that laws inevitably lag behind - Both needs and harms also differ across nations Note: Examples of several recent U.S laws that impact information security management are discussed in Chapter 14 Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 15-3 ETHICAL ISSUES • IT is having a growing effect on our lives and can give rise to ethical issues – • Managers who determine how IT is used are also responsible for the ethical implications of their decisions Potential consequences of unethical behavior – For an individual employee - Loss of reputation - Loss of employment or career – For an organization - Loss of reputation - Business survival Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 15-4 IDENTIFYING ETHICAL PROBLEMS – The first step is to recognize that a decision or action has ethical implications – These questions can be used to identify potential ethical problems: • • • • Is this fair to everyone that will be affected? Would I want my mother to know about this? Would I care if everyone knew about this? What would be the result if everyone did this? – IT-related ethical problems have the potential to impact many stakeholders Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 15-5 ANALYZING ETHICAL PROBLEMS – There is no universally accepted way to determine whether an action is justified or unethical – Many basic ethical principles have come from religious traditions and philosophers – Ethical issues may also be viewed differently depending on culture • Example: In some countries, bribery is not considered unethical APEC attempt to ban bribes Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 15-6 EXAMPLE: CODE OF ETHICS Professional Association Example: The IEEE-CS and ACM have jointly developed a comprehensive code of ethics for the software engineering profession Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 15-7 ANALYZING ETHICAL PROBLEMS – Ethical reasoning is seldom difficult, but some problems are so complex that the decision is not obvious – In these complex situations, there are usually many alternative actions to consider – In organizations: Managers should identify ethical problems and include all parties who are affected by the decision Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 15-8 SOCIAL ISSUES • Privacy • Identity Theft • Intellectual Property Rights Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 15-9 PRIVACY Textbook definition of Privacy: The ability to control access to information about ourselves • An individual might give permission to collect and use certain personal information in exchange for some benefit or business transaction • Privacy is invaded when information is used in ways the individual never intended or explicitly agreed to Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 15-10 WORKPLACE PRIVACY • Outside of the financial industry, there are no laws in the U.S regulating the collection and sharing of personal data • Many organizations now post privacy policies, but even these not always explain how an individual’s personal information is used – • Since corporations have the right to view employee email messages, employees should assume that their email messages are not private Managers should note that actions that employees perceive to violate their personal privacy can result in negative views of the company Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 15-18 U.S PRIVACY LAWS – The Fair Credit Reporting Act - Regulates disclosure of credit application data and credit histories – The Privacy Act - Restricts a government agency from gathering information for one purpose and using it for another or sharing it with another agency – The Family Education Rights and Privacy Act - Protects the privacy of students by restricting access to their grade and disciplinary information – The Electronic Communications Privacy Act - Prohibits unauthorized access to e-mail Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 15-19 U.S PRIVACY LAWS – The Video Protection Privacy Act - Prohibits videotape service providers from disclosing information about video rentals – The Driver’s Privacy Protection Act - Prohibits states from selling driver’s license information – The Health Insurance Portability and Accountability Act - HIPAA protects an individual’s personal health information from unauthorized disclosure – The Children’s Online Privacy Protection Act - Prohibits collecting information from children under the age of 13 unless their parents authorize it – Gramm-Leach-Bliley Act - Provides some privacy protections against the sale of financial information Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 15-20 PRIVACY LAWS • The U.S position on Privacy differs from the European position; these differences need to be recognized by organizations when data is transferred across European borders Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 15-21 IDENTITY THEFT Identity Theft “Someone appropriating your personal information without your knowledge to commit fraud or theft” - FTC • Resolving the effects of identity theft takes 30-40 hours on average, but can also take months or years • In 2009, 11.1 million U.S adults were affected by Identity Theft, an increase of 12% over 2008 – – Total fraud amount increased by 12.5% to 54 billion Average victim spent 21 hours and $343 resolving the crime Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 15-22 PREVENTING IDENTITY THEFT – Protect your national ID numbers (U.S Social Security Number) - Do not reveal it to anyone unless you know that it is necessary - Do not carry your Social Security card or number in your wallet – Protect your credit cards - Carry as few cards as possible – – – – Keep them in sight when being handled by others Protect your computer by using a firewall and installing antivirus and antispyware software Do not throw bills & credit card offers into the trash; shred them instead Check your credit card bills and bank statements carefully Check Credit Reports frequently Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 15-23 INTELLECTUAL PROPERTY RIGHTS Intellectual Property (IP) Any product of the human mind, such as an idea, an invention, a literary creation, a work of art, a business method, an industrial process, a chemical formula, a computer program, or a presentation • The key difference between intellectual and physical property is that the product can be shared without the owner losing it • What can be “owned” differs from society to society, but many nations recognize the importance of laws to protect IP Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 15-24 INTELLECTUAL PROPERTY RIGHTS • IP laws typically grant ownership rights for a limited time under the belief that IP should eventually be in the public domain: Copyrights: Give the owner control over the duplication of copyrighted intellectual property Patents: Give the owner the exclusive right to the manufacture and use of a new design or method • However, IP laws were developed with tangible products in mind: Since IT separates the content from the medium that contains it, new laws are required, but legislation lags behind the technology Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 15-25 SOFTWARE COPYRIGHTS • U.S Copyright laws make it illegal to copy and use software without the software vendor’s permission • For most software, the copyright owners not sell the software itself, but only the right to use under certain specified conditions • When that right is violated, the copyright has been violated Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 15-26 SOFTWARE PIRACY – In 2009, an estimated 43% of installed software worldwide was pirated, which cost the software industry an estimated $ 51 billion – Software piracy rates vary by country and region • – In some developing countries, governments not monitor software piracy In 2009, countries with >80% software piracy included Armenia, Vietnam, Venezuela, Pakistan, and Indonesia; China decreased its piracy rate, but that year it was estimated to be 79% Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 15-27 DIGITAL ENTERTAINMENT PIRACY – – Piracy of music and videos is growing internationally CD piracy rates vary widely across countries - U.S., Japan, and Western Europe have the lowest piracy rates - – Indonesia and Paraguay have the highest piracy rates (>90%) The International Federation of the Phonographic Industry (IFPI) represents the international recording industry against piracy • Despite iTunes and other music download services for a low fee, estimates are that 95% of music is pirated (IFPI, 2009) • Today, the piracy of videos (TV shows and movies) is growing much faster than music piracy Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 15-28 DIGITAL ENTERTAINMENT PIRACY • In the U.S the Recording Industry Association of America (RIAA) and then the Motion Picture Association of America (MPAA) launched legal and marketing efforts designed to stop the piracy of music and movies RIAA advertisement • MPAA advertisement Music and file sharing gained widespread popularity with the advent of Napster that enabled file sharing through a peer-to-peer (P2P) network with a centralized index - In 2003, the RIAA began filing lawsuits against individuals who were file sharing on P2P networks; Napster was sued, shut down, and then changed its business model to a legal subscription provider - Some recent lawsuits have been controversial because the plaintiffs have included children and people without computers RIAA suit controversies Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 15-29 OTHER SOCIAL ISSUES • Digital Divide = the gap between those with access to information technology and those without - IT has become so essential to modern economic activity that those who not have access are precluded from some economic benefits - Internet access in Africa, Latin America, and Middle East grew about 1000% between 2000 and 2010 - The gap is also diminishing in developed countries like the U.S • Freedom of Speech - Use of the Internet has led to renewed controversy in U.S between right to freedom of speech and the right of society to protect itself Is there information that is so harmful or dangerous that for the good of society it should be prohibited from being posted on the Internet? Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 15-30 OTHER SOCIAL ISSUES • Hazards of Inaccuracy - Maintaining accuracy is costly and time consuming Who should pay for the impacts of data inaccuracies? • Impacts on Workers - Global outsourcing of knowledge work is enabled by IT Are workers merely one factor of production or are they worthy of further consideration because they are citizens of a specific country? Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 15-31 THE FUTURE • Computers will continue to get faster, more powerful and less costly What will individuals and organizations with all the increased IT power that will be available for less and less money? • Expert systems, neural networks and artificial intelligence are still evolving as substitutes for human brainpower To what extent will human lives be improved? To what extent will there be unintended negative consequences? Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 15-32 [...]... providers from disclosing information about video rentals – The Driver’s Privacy Protection Act - Prohibits states from selling driver’s license information – The Health Insurance Portability and Accountability Act - HIPAA protects an individual’s personal health information from unauthorized disclosure – The Children’s Online Privacy Protection Act - Prohibits collecting information from children... 15-11 E- COMMERCE PRIVACY CONCERNS • The growth of IT, especially the Web, has increased the potential for Privacy violations • One method of obtaining information about consumers is through the use of cookies Cookies: A small file created by a Web browser that can identify the user to a particular Web site • The effects of cookies on an individual’s Privacy can vary, depending on how they are used... business clients on thousands of Web sites - First time a user visits any of these Web sites, a cookie is created by the Web browser - The cookie will then identify the user on any subsequent visits to Web sites with DoubleClick advertising - Through this mechanism, a detailed profile of browsing behavior and preferences can be compiled Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 15-14... SOCIAL NETWORKING PRIVACY CONCERNS Facebook • Initial company policy was that information would be shared only within the user’s group of friends However, over the years the company has changed its policy, sometimes without pre-warning its users • Facebook generates revenues through advertisements, and the disclosure of personal information gives advertisers a greater ability to target relevant users –... data and credit histories – The Privacy Act - Restricts a government agency from gathering information for one purpose and using it for another or sharing it with another agency – The Family Education Rights and Privacy Act - Protects the privacy of students by restricting access to their grade and disciplinary information – The Electronic Communications Privacy Act - Prohibits unauthorized access to...PRIVACY Why is Privacy a business issue? • Personal information can be extremely valuable to marketers, and many companies spend significant funds on obtaining it • Credit cards, customer loyalty cards, warranty cards, and sweepstakes are all used to collect personal information • U.S citizens differ widely in their attitude toward personal privacy On average,... industry, there are no laws in the U.S regulating the collection and sharing of personal data • Many organizations now post privacy policies, but even these do not always explain how an individual’s personal information is used – • Since corporations have the right to view employee email messages, employees should assume that their email messages are not private Managers should note that actions that employees... Privacy concerns also increase when Web portals are involved: - In 2001, privacy advocates raised concerns about the strategic alliance between DoubleClick and Abacus Direct, a direct marketing company with information on 88 million households, because the deal would link the two companies’ databases - In 2007, the purchase of DoubleClick by Google raised similar concerns over the merging of Google’s data... location Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 15-16 SPYWARE CONCERNS Spyware is one of the most rapidly growing types of software that covertly gathers a user’s personal information without the user’s knowledge; this is also referred to as “social engineering.” - Spyware is usually hidden inside of other programs, such as screensavers and file sharing software - Sometimes... Protection Act - Prohibits collecting information from children under the age of 13 unless their parents authorize it – Gramm-Leach-Bliley Act - Provides some privacy protections against the sale of financial information Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 15-20 PRIVACY LAWS • The U.S position on Privacy differs from the European position; these differences need to be recognized