Chapter 14: Corporate and Individual Accountability: Ethical, Legal, and Social Issues

Chapter 14: Corporate and Individual Accountability: Ethical, Legal, and Social Issues

• Definition of Ethics:

  • Ethics is the set of principles regarding what is right and wrong that individuals utilize to guide their decisions and choices.

• Definition of Morals:

  • Morals are the principles or standards of right and wrong behavior that govern an individual’s or society’s beliefs, values, and actions.

• Mnemonic for Differentiation:

  • "Morals are for Me; Ethics are for Everyone" helps to remember the general difference between morals and ethics.

Ethical Versus Legal (1 of 2)

• Definition of Law:

  • Law is a comprehensive system of rules defining what actions are permissible and impermissible.

• Influence of Law on Economic Systems:

  • Economic systems are shaped by the legal frameworks that exist in society.

• Business Legal Frameworks:

  • The legal frameworks in which businesses operate are created by political systems that establish the laws and regulations.

• Conformance:

  • Legal acts conform to the law, while ethical acts align with individual beliefs about what is right.

  • It is crucial to note that legality does not imply ethicality; an action can be legal yet unethical.

Ethical Versus Legal (2 of 2)

• Figure 14-1:

  • Illustrates acting ethically versus legally.

• Complex Issues:

  • Laws present complex issues related to equality, fairness, and justice but do not offer a complete ethical guide.

The Trolley Problem

• Figure 14-2:

  • Depicts the Trolley Problem; a classic ethical dilemma illustrating that the correct moral choice may not always be clear.

The Purpose of a Corporation

• Commitments for a Virtuous Cycle:

  • Deliver value to customers.

  • Invest in employees.

  • Deal fairly and ethically with suppliers.

  • Support the communities where they operate.

  • Generate long-term value for shareholders.

Including Ethical Considerations in Decision Making (1 of 4)

• Structured Decision-Making Approach:

  • Complex ethical dilemmas necessitate a structured decision-making process applying critical thinking skills. Steps include:

  • Gather information.

  • Develop a clear problem statement.

  • Consult with involved parties and appropriate resources.

  • Identify potential options.

  • Evaluate those options.

  • Select an option and implement it.

  • Review the results.

Including Ethical Considerations in Decision Making (2 of 4)

• Figure 14-3:

  • Shows a detailed decision-making process involving eight steps.

Including Ethical Considerations in Decision Making (3 of 4)

• Definition of a Problem Statement:

  • A problem statement provides a clear and concise description of the issue that needs addressing.

• Key Questions for an Effective Problem Statement:

  • What observations indicate a problem?

  • Who is directly affected, and is anyone else affected?

  • Frequency of the issue’s occurrence?

  • What is the impact and seriousness of the problem?

  • Urgency of addressing the problem?

  • What ethical issues are involved?

Including Ethical Considerations in Decision Making (4 of 4)

• Figure 14-5:

  • Depicts various decision-making factors influencing understanding and options available.

Professional Code of Ethics

• Definition:

  • A professional code of ethics articulates the principles and core values a professional organization seeks to cultivate among members and leaders.

• Benefits of a Code of Ethics:

  • Improves ethical decision-making.

  • Establishes high standards of practice and ethical behavior.

  • Builds trust and respect with the public.

  • Serves as a benchmark for evaluation.

Information Systems and Privacy (1 of 2)

• Balancing Needs and Rights:

  • The utilization of information systems in governance and business necessitates balancing user needs with the rights and desires of individuals whose information is utilized.

• Impact of Global Marketplace:

  • There's an increased emphasis on understanding consumer purchasing habits and financial conditions.

• Objections to Data Collection:

  • A significant number of individuals express concern regarding data collection policies.

• Solutions for Balancing Privacy:

  • New laws, technical solutions, and privacy policies are necessary to strike a balance and reclaim control over personal data—including how it is collected, utilized, safeguarded, sold, and disposed of.

Information Systems and Privacy (2 of 2)

• Figure 14-6:

  • Illustrates the diverse sources from which organizations gather data on individuals.

Measures Protecting Personal Data

• Fair Information Practices:

  • This refers to guidelines that govern the collection and utilization of personal data.

• General Data Protection Regulation (GDPR):

  • The GDPR constitutes a framework for data privacy and protection that applies to all entities processing personal data of EU citizens.

• California Consumer Privacy Act (CCPA) and Privacy Rights Act (CPRA):

  • These acts are closely modeled after the GDPR to ensure data protection.

• Florida Privacy Prevention Act (FPPA):

  • This legislation prohibits data sales involving individuals under the age of 16.

Data Protection Categories (1 of 3)

• Federal Laws on Data Privacy:

  • These laws can be classified into topics such as financial data, health information, and children’s personal data.

Data Protection Categories (2 of 3)

• Financial Data Regulations:

  • Fair Credit Reporting Act (FCRA).

  • Right to Financial Privacy Act (RFPA).

  • Fair and Accurate Credit Transactions Act (FACTA).

• Health Information Regulations:

  • Health Insurance Portability and Accountability Act (HIPAA).

  • Health Information Technology for Economic and Clinical Health Act (HITECH).

Data Protection Categories (3 of 3)

• Children’s Personal Data Regulations:

  • Family Educational Rights and Privacy Act (FERPA).

  • Children’s Online Privacy Protection Act (COPPA).

Website Privacy Policy

• Better Business Bureau Recommendations:

  • A privacy notice should include:

  • Notice: What personal information is being collected.

  • Choice: Options available to customers regarding data collection and usage.

  • Access: How customers can review their collected data.

  • Security: Measures for data storage and protection.

  • Redress: Steps customers can take if privacy policy provisions are violated.

Individual Efforts to Protect Privacy

• Steps to Safeguard Personal Privacy:

  • Discover what personal information is stored about you in existing databases.

  • Exercise caution when sharing personal information.

  • Actively take measures to secure your privacy.

  • Be vigilant when purchasing online.

Data Collection Standards (1 of 3)

• Surveillance Capitalism:

  • This term describes the practice of corporations profiting from collecting personal data from online activities.

• Data Brokers:

  • Companies that assemble profiles on individuals from aggregated data across multiple sources.

• Business Practices for Data Handling:

  • Implement privacy-by-design practices.

  • Rigorously comply with data privacy laws.

  • Default to opting out of other data collections.

Data Collection Standards (2 of 3)

• Additional Data Handling Practices:

  • Maintain transparency about data collection.

  • Collect only necessary data.

  • Use collected data solely for its intended purpose.

  • Encrypt Personally Identifiable Information (PII).

  • Limit access to sensitive data.

  • Notify users promptly of data breaches.

  • Retain data only as long as necessary for its purpose.

Data Collection Standards (3 of 3)

• Remaining Practices for Effective Data Handling:

  • When sharing data with third parties, ensure you understand and validate their privacy policies.

  • Securely dispose of data and backups when no longer required.

  • Continuously train employees on proper data handling procedures.

  • Regularly audit data collection, storage, handling, and destruction practices.

Knowledge Check Activity 14-1

• Question:

  • ___ are companies that create profiles on people based on aggregated data from multiple sources including arrest records, business directories, social media networks, and product registrations.

• Options:

  • a. Data providers

  • b. Data brokers

  • c. Data analysts

  • d. Data administrators

• Answer:

  • b. Data brokers

Information Systems and Surveillance

• Fourth Amendment Text:

  • "The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated…"

• Legal Rulings:

  • Courts have established that without a reasonable expectation of privacy, there is no privacy right.

Government Surveillance (1 of 2)

• Authorized U.S. Government Surveillance Agencies:

  • Bureau of Alcohol, Tobacco, and Firearms, CIA, Department of Treasury, Department of Homeland Security, Drug Enforcement Agency, FBI.

Government Surveillance (2 of 2)

• Surveillance-Enabling Laws:

  • Foreign Intelligence Surveillance Act (FISA): Allows federal intelligence agencies to seek warrants.

  • US PATRIOT Act: Expanded use of National Security Letters (NSL), allowing federal agencies to issue information requests.

Corporate and Private Surveillance (1 of 3)

• Video Doorbell Policies:

  • Ring altered their policy in 2023, requiring a warrant for police to access data unless in emergencies.

• Automated License Plate Readers (ALPRs):

  • Capture license plate images using optical character recognition (OCR) technology.

  • California imposes restrictions on sharing and retaining ALPR data.

Corporate and Private Surveillance (2 of 3)

• Figure 14-8:

  • Visual representation of ALPR technology, which captures license plates with timestamps and location data.

Corporate and Private Surveillance (3 of 3)

• Cellular Location Tracking:

  • Cell service providers maintain records of device connections, which can be subpoenaed.

• Additional Personal Data Collection Devices:

  • Personal fitness trackers, vehicle performance trackers, home security cameras.

Privacy by Design

• Core Principles of Privacy by Design:

  • Proactive, not reactive.

  • Privacy as the default setting.

  • Privacy embedded into design.

  • Full functionality.

  • End-to-end security.

  • Visibility and transparency.

  • Respect for user privacy.

Information Systems and Freedom of Expression

• Ethical Decisions:

  • Individuals must often navigate ethical decisions concerning internet freedoms and the power it entails.

• Organizational and Government Policy Aims:

  • Policies seek to protect interests while guiding user behavior.

  • Corporations often limit non-business use of IT resources to ensure productivity and minimize legal liability.

Measures Protecting Freedom of Speech

• Importance of Freedom of Expression:

  • It is a fundamental right in democratic societies, encompassing various forms such as nonverbal, visual, and symbolic expression.

  • Anonymous expression allows opinions to be shared without fear of repercussion, yet it can be misused.

Internet Censorship (1 of 6)

• Definition of Internet Censorship:

  • Control or suppression of information publishing and access on the internet, including blocking content and intimidating authors.

• Web Hosting Services:

  • Can face claims requiring prompt removal of content for alleged defamation or copyright infringement.

Internet Censorship (2 of 6)

• Figure 14-11:

  • Illustrates internet censorship and content suppression actions.

Internet Censorship (3 of 6)

• Communications Decency Act (CDA):

  • Intended to protect children from inappropriate online content; parts ruled unconstitutional due to vague language.

• Internet Filters:

  • Software tools that restrict access to objectionable material.

• Children’s Internet Protection Act (CIPA):

  • Mandates technological protections for federally funded schools and libraries against obscene material.

Internet Censorship (4 of 6)

• Definition of Defamation:

  • Making false statements about an individual causing harm, often prompting lawsuits aimed at censoring speech.

• Hate Speech:

  • Harassment directed toward individuals based on protected class status, which ISPs may remove in accordance with standards.

Internet Censorship (5 of 6)

• Censorship of Internet Pornography:

  • Federal laws target child pornography possession and distribution, enforceable via significant penalties.

Internet Censorship (6 of 6)

• Definition of Fake News:

  • False information presented misleadingly as factual news.

• Strategies for Creating Fake News:

  • Making unfounded claims, omitting critical information, withholding facts, partial accounts, and misleading corrections.

Ethical Issues in Developing Quality Information Systems

• Characteristics of High-Quality Information Systems:

  • Systems must be reliable, efficient, user-centered, secure, maintainable, scalable, and compliant with laws.

• Definition of Software Defect:

  • Any error leading to system failure or security vulnerabilities.

• Developer Ethical Dilemmas:

  • Developers must decide on investment ratios in ensuring the development of high-quality systems.

Safety-Critical Systems (1 of 2)

• Definition of Safety-Critical Systems:

  • Systems whose failure can result in injury or death.

• Necessity of Extreme Measures:

  • Essential to identify and mitigate defects starting from early design phases to prevent catastrophic failures.

Safety-Critical Systems (2 of 2)

• Developer Responsibilities:

  • Assess cost versus safety in design, determine when sufficient testing is adequate, and ensure rigorous scrutiny throughout.

• Whistleblower Definition:

  • Individuals reporting unethical or illegal actions, acting as safeguards against misconduct in organizations.

Knowledge Check Activity 14-2

• Question:

  • Systems that perform reliably, meet user needs effectively, and comply with regulations are referred to as:

  • a. Standard information systems

  • b. High-quality information systems

  • c. Defective information systems

  • d. Expensive information systems

• Answer:

  • b. High-quality information systems.

Self Assessment

• Be familiar with the differences between ethics and morals.

• Understand the relationship between ethics and laws.

• Differentiate between harmful and distasteful speech.

Summary

• Now that the lesson has concluded, you should be able to:

  • Differentiate between morals, ethics, and laws.

  • Describe steps for customer data protection.

  • Distinguish between government and corporate surveillance.

  • Explain measures for protecting freedom of expression.

  • Define high-quality information systems and safety-critical systems.