Chapter 4 – Social, Ethical and Legal Issues in the Digital Firm
Case Study: Tech Data Helps to Fight Software Piracy
Challenge: Piracy of software costs organizations billions of dollars
Most companies in North America have computer usage policies that tell
employees to use only software that have been properly leased or purchased
The Canadian Alliance (CAAST) half of Canadians think pirating for
individual use is fine, but 3/4 of Canadians think it is unacceptable for
85% of Canadians: “there is something wrong with downloading illegal
2:1 ratio legitimately to illegitimately software
International Intellectual Property Alliance (IIPA) urges Canada to adopt
copyright reform legislation to adopt stricter enforcement as well
Tech Data Corporation (TDC) is the leading IT distributor of hardware and
software to more than 9000 value-added (VAR)
TDC thought that customers did not understand software piracy
TDC wanted both customers and employees to be able to recognize pirated
Anti Piracy program includes detailed guides
4.1 Understanding Social, Legal and Ethical Issues Related to Systems (pg. 99)
Ethics: Principles of right and wrong that individuals, acting as free moral
agents, use to make choices to guide their behaviors.
Information Systems raise new ethical questions for both individuals and
societies because they create opportunities for intense social change and
thus threaten existing distributions of power, money, rights and obligation.
o Information technology can be used to not only achieve social
progress, but also commit crimes and threaten cherished social
values. The development of information technology will produce
benefit for many and cost for others.
Ethical issues have been giving urgency by the rise of the Internet and
electronic commerce. Make it easy to assemble, integrate and distribute
information unleashing new concerns about appropriate use
Other issues exist such as accountability for the consequences of information
systems, setting standards to safe-guard system quality that protects the
safety of the individuals and society.
A Model for thinking about Ethical, Social and Political Issues:
Ethical, social and legal/political issues are closely linked
o Equilibrium with individuals and social and political institutions.
Take years to develop etiquette, expectations and social responsibility,
politically correct attitudes Five Moral Dimensions of the Information Age:
Information rights and obligations: What information rights do individuals
and organizations possess with respect to themselves? What can they
protect? What obligations do individuals and organizations have concerning
Property rights and obligations: How will traditional intellectual property
rights be protected in a digital society in which tracing and accounting for
ownership are difficult and ignoring such property rights is so easy
Accountability and control: Who can and will be held accountable and
liable for the harm done to individual and collective information and
System Quality: what standards of data and system quality should we
demand to protect individuals right and the safety of society
Quality of Life: what values should be preserved in an information- and
knowledge based society? Which institutions should we protect from
violation? Which cultural values and practices are supported by the new IT?
Key Technology Trends That Raise Ethical Issues:
IT has heightened ethical concerns, taxed existing social arrangements and
made some laws obsolete
Social rules have laws have not yet adjusted to this dependence.
Standards for ensuring that accuracy and reliability of information systems
are not universally accepted or enforced.
Growth of databases is a result of advances in data storage techniques and
rapidly declining storage.
o Employees, customers, potential customers
The use of computers to combine data from multiple sources and create
electronic dossiers of detailed information on individuals is called profiling
Nonobvious relationship awareness (NORA) has given both the
government and the private sector even more powerful profiling capabilities.
NORA can take info about people from databases and correlate info to find
obscure hidden connections that might help identify criminals or terrorists.
Reduce the cost of moving and accessing large quantities of data and open
the possibilities of mining large pools of data remotely using desktop
4.2 Ethics in an Information Society (pg. 104)
Responsibility: key element of ethical action. Accept the potential costs,
duties and obligations for the decisions you make
Accountability: feature of systems and social institutions. It means that
mechanisms are in place to determine who took responsible action and who
is responsible. Systems and institutions in which it is impossible to find out
who took what actions are inherently incapable of ethical Liability: Permits individuals to recover damages done to them
Due process: related feature of political of law-governed societies and is a
process in which laws are known and understood there is an ability to appeal
to higher authorities to ensure that the laws are applied correctly
Systems do not have impacts by themselves. Products of institutional,
organizational, and individual actions and behavior.
Responsibility for technology falls on the institution and individual managers
Individuals can recover damages done to them through a set of laws
characterized by due process
1. Identify and describe clearly the facts: Find out W.W.W.W.W.H. Getting the
facts straight will define the situation.
2. Define the conflict or dilemma, and identify the higher-order values
involved: Always reference higher values, which two opposing parties are
trying to attain (freedom, privacy, protection, property) Two opposed
courses of action that support worthwhile values
3. Identify the stakeholders: Players in the game who have an interest in the
outcome, invested into the situation. Find out who they are what they want
4. Identify the options that you can reasonably take: Sometimes coming up
with a good ethical solution may not always be a balancing of consequences
5. Identify the potential consequence of your options: Some options may be
ethically correct but disastrous from other points of view. Other options may
work in one instance but not in other similar instances.
Candidate Ethical Principles:
1. Do unto others as you would have them do unto you (Golden Rule)
2. If an action is not right for everyone to take, it is not right for anyone
(Immanuel Kant’s categorical imperative)
3. If an action cannot be taken repeatedly, it is not right to take at all
(Descartes’ rule of change)
4. Take the action that achieves the higher, greater value or use for the benefit
of the majority (Utilitarian principles)
5. Take the action that produces the least harm or the least potential cost (Risk
6. Assume that virtually all tangible and intangible objects are owned by
someone else unless there is a specific declaration otherwise (no free lunch)
Professional Codes of Conduct:
Promulgated by associations of professionals
o Canadian Medical Association (CMA)
o Canadian Bar Association (CBA)
o Canadian Information Processing Society (CIPS)
o Association of Computing Machinery (ACM) Responsible for the partial regulation of their professions by determining
entrance qualifications and competence.
Regulate themselves in the general interest of society.
Some Real-World Ethical Dilemmas:
Companies can argue that it has a right to use information systems to
increase productivity and reduce the size of its workforce to lower costs and
stay in business
Employees can argue that employers have some responsibility for their
Information Rights: Privacy and Freedom in the Internet Age (pg. 106)
Privacy: Claim of individuals to be left alone, free from surveillance or
interference from other individuals or organizations, including the state.
Individuals are subject to electronic surveillance since information systems
make invasion of privacy cheap, profitable and effective.
In Canada, claim to privacy is protected by the right to be secure against
unreasonable search or seizure found in the Charter of Rights and
o In 2000 Canada passed the Personal Information Protection and
Electronic Documents Act (PIPEDA)
o Governs the collection, use and disclosure of personal information:
accountability, indentifying the purpose for the collection of personal
information, obtaining consent, limiting collection
1983 Privacy Act, imposes rules on how federal government departments
and agencies collect, use and disclose personal information
Canadian Standards association’s Model Privacy Code:
o Published in March 1996 the Code establishes 10 basic principles for
all organizations that collect or use personal information.
Most North American / European privacy law is based on Fair Information