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Chapter 4

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Department
Commerce
Course
COMMERCE 2KA3
Professor
Scott Paquette
Semester
Winter

Description
Chapter 4 – Social, Ethical, and Legal Issues in the Digital Firm Ethics: Principles of right and wrong that individuals, acting as free moral agents, use to make choices to guide their behaviors Ethics in an Information Society  Ethics is about individual choice. Main features of ethical choice: o Responsibility: Accepting the potential costs, duties, and obligations for decisions – an element of ethical action o Accountability: Mechanisms for identifying responsible parties – a feature of systems and social institutions o Liability: Legally placing responsibility with a person or group – a feature of the political system o Due process: Ensuring the laws are applied fairly and correctly. • When confronted with a situation that seems to present ethical issues, conduct an ethical analysis: 1. Identify and clearly describe the facts 2. Define the conflict or dilemma, and identify the higher- order values involved 3. Identify the stakeholders 4. Identify the options that you can reasonably take 5. Identify the consequences of your options Examples of Failed ethical Judgement by Managers 1 Why Should Managers Care?  Managers, employees have to decide what constitutes proper legal and ethical conduct  Managers, employees involved could face legal punishment  Managers are evaluated on their conduct  Unethical behavior can lead to a firm's poor reputation  Customers are valuing ethical behavior by firms (examples?) Role of Information Systems?  What about information systems? o Both for social progress and committing crimes: Instrumental in unethical action o Control issues (chapter 8) o Huge impact on society: Internet, electronic commerce  What are some ethical dilemmas brought about by the Internet age? Model for Ethical, Social and Political Issues Technology Trends that Cause Ethical Issues 2 Ethical Principles:  Golden Rule: Do unto others as you would have them do unto you  If an action is not right for everyone to take, then it is not right for anyone  If an action cannot be taken repeatedly, then it is not right to be taken at any time  Take the action that achieves the greatest value for all concerned  Take the action that produces the least harm or incurs the least cost to all concerned  Assume that all tangible and intangible objects are owned by someone else, unless there is a specific declaration otherwise Real-World Ethical Dilemmas Example:  Telephone companies using information technology to reduce the sizes of their workforce. Voice recognition software reduces the need for human operators.  What are the competing values here? o Company argues it has a right to use technology to increase productivity, reduce the size of workforce, lower costs stay in business o Employees argue that employers have responsibility for their welfare Example:  Companies monitor what their employees are doing on the Internet to prevent them from wasting company resources on non-business activities.  What are the competing values here? o Company: minimize drains on productivity. o Employees: use Internet for short personal tasks in place of telephone. Summary of Competing Values  Companies would like to o Increase productivity o Lower costs o stay in business  Employees would like to o Keep their jobs o Protect their privacy  What is the role of customers? Privacy and Freedom in the Internet Age  Privacy: o The claim of individual to be left alone, free from surveillance or interference from other individuals or organizations, including the state.  Information technology and systems threaten privacy. Why? o Making the invasion of privacy cheap, profitable and effective! 3  Privacy protection at political level: o Constitution (Canada, U.S., …) o Additional protection:  Canada: Personal Information Protection and Electronic Documents Act (PIPEDA)  Principles of PIPEDA to govern the collection, use and disclosure of personal information  The European Directive on Data Protection:  Much stricter restrictions  Customers must provide informed consent  Informed consent: consent given with knowledge of all the facts needed to make a rational decision  EU nations cannot transfer information to other countries that do not have similar privacy protection regulations. Example?  Safe harbour: a private, self-regulating policy and enforcement mechanism that meets the objective of government regulators, but does not involve government enforcement. 
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