Chap1 - Overview

8/2/2019 Chap1 - Overview

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Professional Ethics forInformation Technology


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Chapter 1An Overview of Ethics


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WHAT IS ETHICS?Each society forms a set of rules that

establishes the boundaries of generallyaccepted behavior. These rules are often

expressed in statements about how peopleshould behave, and they fit together to formthe moral code by which the society lives.Unfortunately, the different rules often have

contradictions, and people are sometimesuncertain about which rule to follow.

For instance, if you witness a friend copysomeone elses answers while taking the

exam, you might be caught in a conflict


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The term morality refers to social conventionsabout right and wrong that are so widely sharedthat they become the basis for an establishedconsensus. However, individual views of what

is moral may vary by age, culture group, ethicbackground, religion, life experiences,education, and gender.

In the United States, for example, issues suchas abortion, the death penalty, and gun controlare continuously debated, and both sides feelthat their arguments are on solid moral ground.


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Definition of EthicsEthics is a set of beliefs about right and wrongbehavior within a society. Ethical behaviorconforms to generally accepted norms-many of

which are almost universal.

However, although nearly everyone wouldagree that lying and cheating are unethical,opinions about what constitutes ethical

behavior often vary dramatically.

Ex. attitudes towards software piracy that is, the

practice of illegally making copies of software or enablingothers to access software to which they are not entitled-range

from strong opposition to acceptance of practice as a standardapproach to conducting business.


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In 2007, 38% of all software in circulationworldwide was pirated- at a cost of nearly $48billion USD.

Highest piracy rate93% - Armenia

92% - Bangladesh, Azerbaijan, and Moldova

Lowest piracy rate

22% - New Zealand

21% - Luxembourg

20% - United States


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Virtues - VicesVirtues are habits that incline people to do

what is acceptable.

Ex. Fairness, generosity, loyalty

Vices are habits of unacceptable behavior.

Ex. Vanity, greed, envy and angry

Peoples virtues and vices help define theirpersonal value system - the complex schemeor moral value by which they live.


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Importance of Integrity Your moral principles are statements of what

you believe to be rules of right conduct.

A person who acts with integrity acts inaccordance with a personal code of principles.

One approach to acting with integrity-one ofthe cornerstone of ethical behavior-is toextend all people the same respect andconsideration that you expect to receive fromothers.


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For example, you might believe it is important to do as

your employer requests while also believing that you shouldbe fairly compensated for your work. Thus, if your employerinsists that you do not report the overtime hours that youhave worked due to budget constraints, a moral conflictsarises. You can do as your employer requests, or you caninsists of being fairly compensated, but you cannot do both.In this situation, you may be forced to compromise one ofyour principles and act with an apparent lack of integrity.

Another form of inconsistency emerges if you apply

moral standards differently according to thesituation or people involved.

For example, you might consider it morallyacceptable to tell a little white lie to spare a friend some

pain or embarrassment, but would you lie to work


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Many ethical dilemmas are not as simple asright versus wrong but involve choices betweenright versus right.

As an example, for some people it is right toprotect the Alaskan wildlife from being spoiledand also right to find new sources of oil tomaintain U.S. reserves, but how do they

balance these two concerns?


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The difference between

Morals, Ethics and LawsMorals are ones personal beliefs about rightand wrong.

Ethics describes standards or codes ofbehavior expected of an individual by a groupto which an individual belongs.

For example, the ethics of the law profession demand thatdefense attorneys defend an accused client to the best of their

ability, even if they know that the client is guilty.Laws is a system of ruled that tells us what wecan and cannot do. Laws are enforced by a setof institutions. Legal acts are acts that conform

to the law.


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Moral acts conform with what anindividual believes to be the right thingto do. Laws can proclaim an acts as

legal, although many people mayconsider the act immoral forexample, abortion.


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Ethics in Business WorldEthics has risen to the top of the businessagenda because the risks associated withinappropriate behavior have increased, both in

their likelihood and in their potential negativeimpact.- Collapsed of financial institutions due to unwise and

unethical decision making over the approval of mortgages

and lines of credit to unqualified individuals andorganizations.

- Numerous US companies moving operations to 3rd worldcountries, where employees work in conditions that wouldnot be acceptable in most developed parts of the world.

- In todays recessionary economic climate, organizations areextremely challenged to maintain revenue and profits.


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Why Fostering GoodBusiness Ethics IsImportantOrganizations have at least 5 good reasons for

promoting a work environment in whichemployees are encouraged to act ethically

when making business decisions:

1. Gaining the good will of the community

2. Creating an organization that operatesconsistently

3. Fostering good business practices

4. Protecting the organization and itsemployees from legal action

5. Avoiding unfavorable publicity


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Gaining the Good Will of

the CommunityAlthough organizations exist primarily to earn

profit and provide service to customers, theyalso have some fundamental responsibilities

to society

Microsoft s statement of values

Our Values

As a company, and as individuals, we valueintegrity, honesty, openness, personal excellence,constructive self-criticism, continual self-improvement, and mutual respect. We are

committed to our customers and partners and


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Examples of ITorganizations sociallyresponsible activitiesOrganization

Example of socially responsible activity

Google,

Inc.

Donated $33 million in free ads to

nonprofit organizations in low-incomeareas

Hewlett-Packard

Employees work to implement technologysolutions to benefit residents of central city

communitiesIBM Awards millions of dollars of grants each

year to support the art

Intel Supplied 100,000 computers to schools in

low-income neighborhoods


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The good will that socially responsible activities

create can make it easier for corporations toconduct their business.

For example, a company known for treating itsemployee well will find it easier to compete for the best

job candidates.

On the other hand, companies viewed asharmful to their community may suffer a

disadvantage.For example, a corporation that pollutes the air and

water may find that adverse publicity reduces sales,impedes relationships with some business partners, andattracts unwanted government attention.


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Creating an OrganizationThat OperatesConsistentlyOrganizations develop and abide by values to

create an organizational culture and to definea consistent approach for dealing with the

need of their stakeholders-shareholders,employees, customers, suppliers and thecommunity.

Consistency means that employees know what

is expected of them and can employ theorganizations value s to help them in theirdecision making.

Consistency means that stakeholders,

customers, suppliers and community know


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Although each companys value system is

different, many share the following values: Operate with honesty and integrity, staying

true to organizational principles

Operate according to standards of ethical

conduct, in words and in action

Treat colleagues, customers, and consumerswith respect

Strive to be the best at what matters most tothe organization

Value diversity

Make decisions based on facts and principles


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Fostering Good Business

PracticesIn many cases, good ethics can mean good

business and improved profits.

Companies that produce safe and effectiveproducts avoid costly recalls and lawsuits.

Companies that provide excellent service retaintheir customers instead of losing them tocompetitors.

Companies that develop and maintain strongemployee relation suffer lower turnover ratesand enjoy better e employee morale.

Suppliers and other business partners oftenplace priority on working with companies that


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ro ec ng eOrganization and Its

Employees from LegalActionIn a 1909 ruling, the US Supreme Court

established that an employer can be heldresponsible for the acts of its employees even

if the employees act in a manner contrary tocorporate policy and their employersdirections. The principle established is calledrespondeat superior, or let the master

answer.Example The collapse in 2002 of Arthur Andersen ,

one of the Big Five international accounting firms.Andersen was indicted for obstruction of justice forshredding of documents associated with the auditingwork that a few of its partners performed for Enron.


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A coalition of several legal organizations argues

that organizations should be able to escapecriminal liability if they have acted asresponsible corporate citizens, making strongefforts to prevent and detect misconduct in

the workplace. One way to do this is toestablished ethics and compliance programs.

Indeed, in 1991, Department of Justiceestablished sentencing guidelines that

suggest more lenient treatment for convictedexecutives if their companies have ethicsprograms. Fines for criminal violations can belowered by up to 80% if the organization has

implemented an ethics management programand coo erates with authorities.


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Avoiding Unfavorable

Publicity The public reputation of a company stronglyinfluences the value of its stock, howconsumers regard its products and services,

the degree of oversight it receives fromgovernment agencies, and the amount ofsupport and cooperation it receives frombusiness partners. Thus, many organizations

are motivated to build a strong ethic programto avoid negative publicity. If an organizationis perceived as operating ethically, customers,business partners, shareholders, consumer

advocates, financial institutions and


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Improving Corporate

Ethics The Ethics Research Center has defined thefollowing characteristics of a successful ethicsprogram:

- Employees are willing to seek advice aboutethics issues

- Employees feel prepared to handle situationsthat could lead to misconduct

- Employees are rewarded for ethical behavior

- The organization does not reward successobtained through questionable means

- Employees feel positively about theircom an


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Appointing a Corporate

Ethics OfficerA corporate ethics officer also called acorporate compliance officer provides anorganization with vision and leadership in the

area of business conduct.- he/she should be a well-respected, senior-

level manager who reports directly to the CEO

- Comes from diverse backgrounds, such aslegal staff, human resource, finance, auditing,security or line operations


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Typically the ethics officer tries to established

an environment that encourages ethicaldecision making through the actions. Specificresponsibilities include:

Responsibility for compliance that is, ensuring

that ethical procedures are put into place andconsistently adhered to throughout theorganization

Responsibility for creating and maintaining the

ethics culture that the highest level of corporateauthority wishes to have

Responsibility for being a key knowledge andcontact person on issues relating to corporateethics and principles


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Ethical Standards Set by

the Board of Directors The board of directors is responsible for thecareful and responsible management of anorganization .

In a for-profit organization, the boards primaryobjective is to oversee the organizationsbusiness activities and management for thebenefit of all stakeholders, including

shareholders, employees, customers, suppliersand community.

In a nonprofit organization, the board reports toa different set of stakeholders, particularly the

local community that the nonprofit serves.


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Establishing a Corporate

Code of EthicsA code of ethics is a statement that highlightsan organizations key ethical issues andidentifies the overarching values and principles

that are important to the organization and itsdecision making.

It includes a set of formal, written statementsabout the purpose of the organization, its

values, and the principles that should guide itsemployees actions.

An organizations code of ethics applies to itsdirectors, officers, and employees.


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The code of ethics focuses employees on areas of

ethical issues, and provides mechanisms forreporting unethical conduct and fostering a culture ofhonesty and accountability within the organization.

The code of ethics helps ensure that employees

abide by the law, follow necessary regulations andbehave in an ethical manner.

It must be easily accessible by employees,shareholders, business partners and the public. Itmust be continually be applied to a companysdecision making and emphasized as an importantpart of its culture. Breaches in the code of ethicsmust be identified and dealt with appropriately sothat the codes relevance is not undermined.


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Intels Code of Conduct, May 2007, found atwww.intel.com/intel/finance/docs/code-of-conduct.pdf, which offers employees guidelines designed todeter wrong doing, promote honest and ethicalconduct, and comply with applicable laws and

regulations. It also expresses its policiesregarding the environment, health and safety,intellectual property, diversity,nondiscrimination, supplier expectations,

privacy, and business continuity.
http://www.intel.com/intel/finance/docs/code-of-conduct.pdfhttp://www.intel.com/intel/finance/docs/code-of-conduct.pdf


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Intels five principles of

conduct1. Intel conducts business with honesty and

integrity

2. Intel follows the letter and spirit of the law

3. Intel employees treat each other fairly

4. Intel employees act in the best interests of

Intel and avoid conflict of interest5. Intel employees protect the companys

assets and reputation


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Conducting Social Audits

In a social audit, an organization reviews howwell it is meeting its ethical and socialresponsibility goals, and communicates its new

goals for the upcoming year. This information isshared with employees, shareholders, investors,market analysts, customers, suppliers,government agencies and the communities in

which the organization operates.For example, each year Intel prepares its CorporateResponsibility Report, which summarizes the firmsprogress towards meeting its ethical and social

responsibility goals.


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Partial Intel 2007Corporate ResponsibilityReport2007 Goals 2007 Performance Results

Reduce greenhouse gasemissions per productionunit by 30% from 2004levels by 2010

Training Goal remains on track;absolute greenhouse gasemissions were down 6%

Met our goal

Reduce water usage perproduction unit below 2005levels by 2010

Absolute water use was down 2%;usage was up 4% per chip

Did not meet goal

Recycle more than 70% ofboth chemical and solidwaste generated from our

worldwide facilities

In 2007, Intel recycled 89% of thesolid waste and 87% of thechemical waste generated at our

facilities worldwide

Met our goal

Empower students andteachers by donating20,000 computers toschools in developingnations

Donated 27,000 full-featured PCswith Internet to more than 500schools in 22 countries as part ofour education donation program

Met our goal


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Requiring Employees to

Take Ethics TrainingAn organizations code of ethics must be promoted andcontinually communicated within the organization, fromtop to bottom. Organizations can do this by showingemployees examples of how to apply the code of ethics inreal life.

Example Comprehensive ethics education program presented insmall workshop formats in which employees apply the organizationscode of ethics to hypothetical but realistic case studies. Employeesmay also be given examples of recent company decisions based on

principles from the code of ethics.Ethics training not only makes employees more aware ofthe companys code of ethics and how to apply it, but alsodemonstrates that the company intends to operate in anethical manner. It can also reduce a companys liability

in the event of legal action.


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Including Ethical Criteria

in Employee Appraisals- 43% of organizations include ethical conductas part of an employees performanceappraisal.

- Treating others fairly and with respect- Operating effectively in a multicultural

environment

- Accepting personal accountability for meeting

business needs- Continually developing others and themselves

- Operating openly and honestly with suppliers,customers and other employees


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Creating Ethical Work

EnvironmentHow management can affect employees ethicalbehaviorManagerial behavior thatcan encourage unethicalbehavior

Possible employeereaction

Set and hold people accountable tomeet stretch goals, quotas andbudgets

My boss wants results, not excuses, soI have to cut corners to meet the goalsmy boss has set.

Fail to provide a corporate code of

ethics and operating principles to guidedecisions

Because the company has not

established any guidelines, I dont thinkmy conduct is really wrong or illegal

Fail to act in an ethical manner andinstead set a poor example for others tofollow

I have seen other successful peopletake unethical actions and not suffernegative repercussions.

Fail to hold people accountable forunethical actions No one will ever know the difference,and if they do, so what

I l di E hi l


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Including EthicalConsiderations inDecision Making

The decision making process further and pointout where and how ethical considerations needto be brought into the process.

1. Develop a Problem Statement

2. Identify alternatives

3. Evaluate and Choose an Alternative

4. Implement Decision5. Evaluate Results


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Develop a Problem

StatementA problem statement is a clear, concisedescription of the issue that needs to beaddressed. A good problem statement answers

the following questions:- What do people observe that causes them to think there

is a problem?

- Who is directly affected by the problem?

- Is there anyone else affected?- How often does it occur?

- What is the impact of the problem?

- How serious is the problem?


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It is the most critical step, without a clear and

correct statement of the problem, the decisionwill not solve the problem.

- gather and analyze facts

- make no assumptions

- identify stakeholders affected by the decisionGood and poor problem of statement- Our product supply organization is continually running our of

stock of finished products, creating an out-of-stock situation

over 15% of our customer orders, resulting to over $300,000in lost sales per month.

- We need to implement a new inventory control system.(possible solution)

- We have a problem with finished product inventory. (not

specific enough)


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Identify Alternatives

During this stage of decision making, it is idealto enlist the help of others, includingstakeholders, to identify several alternative

solutions to a problem. In providing participantsinformation about the problem to be solved,offer just the facts, without your opinion, so youdont influence others to accept your solution.

During the brainstorming process, try not to becritical of ideas, as any negative criticism willtend to shut down the group, and the flow ofideas will dry up. Simply write down the ideas

as they are suggested.


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Evaluate and Choose an

AlternativeOnce a set of alternatives has been identified,the group attempts to evaluate them based onnumerous criteria.

- Effectiveness at addressing the issue

- The extent of risk associated with each alternatives

- Cost and time to implement

As part of the evaluation process, weigh various

laws, guidelines, and principles that may apply.Also consider the likely consequences of eachalternative from several perspectives What isthe impact on you, your organization, other

stakeholders and the environment?


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Philosophers have developed many approaches

to ethical decision making. Four commonphilosophies are the following:

Approach to

dealing with moralissues

Principle

Virtue ethicsapproach

The ethical choice best reflectsmoral virtues in yourself and yourcommunity

Utilitarian approachThe ethical choice produces thegreatest excess of benefits overharm

Fairness approach The ethical choice treats everyonethe same and shows no favoritism


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Chap1 - Overview

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