Professional Ethics for Information Technology

Click to edit Master subtitle style

3/16/12

Chapter 1 An Overview of Ethics

Click to edit Master subtitle style

3/16/12

WHAT IS ETHICS?
Each society forms a set of rules that establishes the boundaries of generally accepted behavior. These rules are often expressed in statements about how people should behave, and they fit together to form the moral code by which the society lives. Unfortunately, the different rules often have contradictions, and people are sometimes uncertain about which rule to follow. For instance, if you witness a friend copy someone elses answers while taking the exam, you might be caught in a conflict 3/16/12

The term morality refers to social conventions about right and wrong that are so widely shared that they become the basis for an established consensus. However, individual views of what is moral may vary by age, culture group, ethic background, religion, life experiences, education, and gender. In the United States, for example, issues such as abortion, the death penalty, and gun control are continuously debated, and both sides feel that their arguments are on solid moral ground.
3/16/12

Definition of Ethics
Ethics is a set of beliefs about right and wrong behavior within a society. Ethical behavior conforms to generally accepted norms-many of which are almost universal. However, although nearly everyone would agree 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 enabling others to access software to which they are not entitled-range from strong opposition to acceptance of practice as a standard 3/16/12 approach to conducting business.

In 2007, 38% of all software in circulation worldwide was pirated- at a cost of nearly $48 billion USD. Highest piracy rate 93% - Armenia 92% - Bangladesh, Azerbaijan, and Moldova Lowest piracy rate 22% - New Zealand 21% - Luxembourg 20% - United States 3/16/12

Virtues - Vices
Virtues 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 their personal value system - the complex scheme or moral value by which they live.
3/16/12

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 in accordance with a personal code of principles. One approach to acting with integrity-one of the cornerstone of ethical behavior-is to extend all people the same respect and consideration that you expect to receive from others.
3/16/12

For example, you might believe it is important to do as your employer requests while also believing that you should be fairly compensated for your work. Thus, if your employer insists that you do not report the overtime hours that you have worked due to budget constraints, a moral conflicts arises. You can do as your employer requests, or you can insists of being fairly compensated, but you cannot do both. In this situation, you may be forced to compromise one of your principles and act with an apparent lack of integrity.

Another form of inconsistency emerges if you apply moral standards differently according to the situation or people involved.
For example, you might consider it morally acceptable to tell a little white lie to spare a friend some 3/16/12 or embarrassment, but would you lie to work pain

Many ethical dilemmas are not as simple as right versus wrong but involve choices between right versus right. As an example, for some people it is right to protect the Alaskan wildlife from being spoiled and also right to find new sources of oil to maintain U.S. reserves, but how do they balance these two concerns?

3/16/12

The difference between Morals, Ethics and Laws

Morals are ones personal beliefs about right and wrong. Ethics describes standards or codes of behavior expected of an individual by a group to which an individual belongs.
For example, the ethics of the law profession demand that defense 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 we can and cannot do. Laws are enforced by a set of institutions. Legal acts are acts that conform to the law.
3/16/12

Moral acts conform with what an individual believes to be the right thing to do. Laws can proclaim an acts as legal, although many people may consider the act immoral for example, abortion.

3/16/12

Ethics in Business World

Ethics has risen to the top of the business agenda because the risks associated with inappropriate behavior have increased, both in their likelihood and in their potential negative impact.
- Collapsed

of financial institutions due to unwise and unethical decision making over the approval of mortgages and lines of credit to unqualified individuals and organizations. - Numerous US companies moving operations to 3rd world countries, where employees work in conditions that would not be acceptable in most developed parts of the world. - In todays recessionary economic climate, organizations are 3/16/12 extremely challenged to maintain revenue and profits.

Why Fostering Good Business Ethics Is Important at least 5 good reasons for Organizations have

promoting a work environment in which employees are encouraged to act ethically when making business decisions: 1. Gaining the good will of the community 2. Creating an organization that operates consistently 3. Fostering good business practices 4. Protecting the organization and its employees from legal action 5. Avoiding unfavorable publicity 3/16/12

Gaining the Good Will of the Community

Although organizations exist primarily to earn profit and provide service to customers, they also have some fundamental responsibilities to society
Microsoft s statement of values Our Values As a company, and as individuals, we value integrity, honesty, openness, personal excellence, constructive self-criticism, continual selfimprovement, and mutual respect. We are committed to our customers and partners and 3/16/12

Examples of IT organizations socially Organizati Example of socially responsible activity responsible activities
on Google, Inc. HewlettPackard IBM Intel
3/16/12

Donated $33 million in free ads to nonprofit organizations in low-income areas Employees work to implement technology solutions to benefit residents of central city communities Awards millions of dollars of grants each year to support the art Supplied 100,000 computers to schools in low-income neighborhoods

The good will that socially responsible activities create can make it easier for corporations to conduct their business.
For example, a company known for treating its employee well will find it easier to compete for the best job candidates.

On the other hand, companies viewed as harmful 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, and attracts unwanted government attention.
3/16/12

Creating an Organization That Operates Consistently and abide by values to Organizations develop

create an organizational culture and to define a consistent approach for dealing with the need of their stakeholders-shareholders, employees, customers, suppliers and the community. Consistency means that employees know what is expected of them and can employ the organizations value s to help them in their decision making. Consistency means that stakeholders, 3/16/12 customers, suppliers and community know

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 consumers with respect Strive to be the best at what matters most to the organization Value diversity Make decisions based on facts and principles
3/16/12

Fostering Good Business Practices

In many cases, good ethics can mean good business and improved profits. Companies that produce safe and effective products avoid costly recalls and lawsuits. Companies that provide excellent service retain their customers instead of losing them to competitors. Companies that develop and maintain strong employee relation suffer lower turnover rates and enjoy better e employee morale. Suppliers and other business partners often 3/16/12 place priority on working with companies that

Protecting the Organization and Its Employees from Legal In a 1909 ruling, the US Supreme Court Action that an employer can be held established
responsible for the acts of its employees even if the employees act in a manner contrary to corporate policy and their employers directions. The principle established is called respondeat 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 for shredding of documents associated with the auditing 3/16/12 that a few of its partners performed for Enron. work

A coalition of several legal organizations argues that organizations should be able to escape criminal liability if they have acted as responsible corporate citizens, making strong efforts to prevent and detect misconduct in the workplace. One way to do this is to established ethics and compliance programs. Indeed, in 1991, Department of Justice established sentencing guidelines that suggest more lenient treatment for convicted executives if their companies have ethics programs. Fines for criminal violations can be lowered by up to 80% if the organization has implemented an ethics management program 3/16/12

Avoiding Unfavorable Publicity

The public reputation of a company strongly influences the value of its stock, how consumers regard its products and services, the degree of oversight it receives from government agencies, and the amount of support and cooperation it receives from business partners. Thus, many organizations are motivated to build a strong ethic program to avoid negative publicity. If an organization is perceived as operating ethically, customers, business partners, shareholders, consumer advocates, financial institutions and 3/16/12

Improving Corporate Ethics

The Ethics Research Center has defined the following characteristics of a successful ethics program: - Employees are willing to seek advice about ethics issues - Employees feel prepared to handle situations that could lead to misconduct - Employees are rewarded for ethical behavior - The organization does not reward success obtained through questionable means - Employees feel positively about their 3/16/12 company

Appointing a Corporate Ethics Officer

A corporate ethics officer also called a corporate compliance officer provides an organization with vision and leadership in the area of business conduct. - he/she should be a well-respected, seniorlevel manager who reports directly to the CEO - Comes from diverse backgrounds, such as legal staff, human resource, finance, auditing, security or line operations

3/16/12

Typically the ethics officer tries to established an environment that encourages ethical decision making through the actions. Specific responsibilities include:
Responsibility for compliance that is, ensuring

that ethical procedures are put into place and consistently adhered to throughout the organization Responsibility for creating and maintaining the ethics culture that the highest level of corporate authority wishes to have Responsibility for being a key knowledge and contact person on issues relating to corporate ethics and principles
3/16/12

Ethical Standards Set by the Board of Directors

The board of directors is responsible for the careful and responsible management of an organization . In a for-profit organization, the boards primary objective is to oversee the organizations business activities and management for the benefit of all stakeholders, including shareholders, employees, customers, suppliers and community. In a nonprofit organization, the board reports to a different set of stakeholders, particularly the 3/16/12 local community that the nonprofit serves.

Establishing a Corporate Code of Ethics

A code of ethics is a statement that highlights an organizations key ethical issues and identifies the overarching values and principles that are important to the organization and its decision making. It includes a set of formal, written statements about the purpose of the organization, its values, and the principles that should guide its employees actions. An organizations code of ethics applies to its directors, officers, and employees.
3/16/12

The code of ethics focuses employees on areas of ethical issues, and provides mechanisms for reporting unethical conduct and fostering a culture of honesty and accountability within the organization. The code of ethics helps ensure that employees abide by the law, follow necessary regulations and behave in an ethical manner. It must be easily accessible by employees, shareholders, business partners and the public. It must be continually be applied to a companys decision making and emphasized as an important part of its culture. Breaches in the code of ethics must be identified and dealt with appropriately so that the codes relevance is not undermined.
3/16/12

Intels Code of Conduct, May 2007, found at

www.intel.com/intel/finance/docs/code-of-conduct.pdf , which offers employees guidelines designed to

deter wrong doing, promote honest and ethical conduct, and comply with applicable laws and regulations. It also expresses its policies regarding the environment, health and safety, intellectual property, diversity, nondiscrimination, supplier expectations, privacy, and business continuity.

3/16/12

Intels five principles of conduct

1. Intel conducts business with honesty and 2. 3. 4. 5.

integrity Intel follows the letter and spirit of the law Intel employees treat each other fairly Intel employees act in the best interests of Intel and avoid conflict of interest Intel employees protect the companys assets and reputation

3/16/12

Conducting Social Audits

In a social audit, an organization reviews how well it is meeting its ethical and social responsibility goals, and communicates its new goals for the upcoming year. This information is shared 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 Corporate Responsibility Report, which summarizes the firms progress towards meeting its ethical and social responsibility goals. 3/16/12

Reduce greenhouse gasTraining Goal remains on track;Met our goal emissions per productionabsolute greenhouse gas unit by 30% from 2004emissions were down 6% levels by 2010

Partial Intel 2007 Corporate Responsibility Report

2007 Goals 2007 Performance Results

Reduce water usage perAbsolute water use was down 2%;Did not meet goal production unit below 2005usage was up 4% per chip levels by 2010 Recycle more than 70% ofIn 2007, Intel recycled 89% of theMet our goal both chemical and solidsolid waste and 87% of the waste generated from ourchemical waste generated at our worldwide facilities facilities worldwide Empower students andDonated 27,000 full-featured PCsMet our goal teachers by donatingwith Internet to more than 500 20,000 computers toschools in 22 countries as part of schools in developingour education donation program nations

3/16/12

Requiring Employees to Take Ethics Training

An organizations code of ethics must be promoted and continually communicated within the organization, from top to bottom. Organizations can do this by showing employees examples of how to apply the code of ethics in real life.
Example Comprehensive ethics education program presented in small workshop formats in which employees apply the organizations code of ethics to hypothetical but realistic case studies. Employees may also be given examples of recent company decisions based on principles from the code of ethics.

Ethics training not only makes employees more aware of the companys code of ethics and how to apply it, but also demonstrates that the company intends to operate in an ethical manner. It can also reduce a companys liability in the event of legal action. 3/16/12

Including Ethical Criteria in Employee Appraisals

- 43% of organizations include ethical conduct

as part of an employees performance appraisal.

- 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
3/16/12

How management can affect employees ethical behavior Managerial behavior that Possible employee
can encourage unethical behavior
Set and hold people accountable to meet stretch goals, quotas and budgets

Creating Ethical Work Environment

reaction

My boss wants results, not excuses, so I have to cut corners to meet the goals my boss has set.

Fail to provide a corporate code of Because the company has not ethics and operating principles to guide established any guidelines, I dont think decisions my conduct is really wrong or illegal Fail to act in an ethical manner and I have seen other successful people instead set a poor example for others to take unethical actions and not suffer follow negative repercussions. Fail to hold people accountable for 3/16/12 unethical actions No one will ever know the difference, and if they do, so what

Including Ethical Considerations in Decision Makingfurther and point The decision making process
out where and how ethical considerations need to be brought into the process. 1. Develop a Problem Statement 2. Identify alternatives 3. Evaluate and Choose an Alternative 4. Implement Decision 5. Evaluate Results

3/16/12

Develop a Problem Statement

A problem statement is a clear, concise description of the issue that needs to be addressed. 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?

3/16/12

It is the most critical step, without a clear and correct statement of the problem, the decision will not solve the problem.
- gather and analyze facts - make no assumptions - identify stakeholders affected by the decision Good 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 $300,000 in 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)
3/16/12

Identify Alternatives
During this stage of decision making, it is ideal to enlist the help of others, including stakeholders, to identify several alternative solutions to a problem. In providing participants information about the problem to be solved, offer just the facts, without your opinion, so you dont influence others to accept your solution. During the brainstorming process, try not to be critical of ideas, as any negative criticism will tend to shut down the group, and the flow of ideas will dry up. Simply write down the ideas as they are suggested. 3/16/12

Evaluate and Choose an Alternative

- Effectiveness at addressing the issue - The extent of risk associated with each alternatives - Cost and time to implement

Once a set of alternatives has been identified, the group attempts to evaluate them based on numerous criteria.

As part of the evaluation process, weigh various laws, guidelines, and principles that may apply. Also consider the likely consequences of each alternative from several perspectives What is the impact on you, your organization, other stakeholders and the environment? 3/16/12

Philosophers have developed many approaches to ethical decision making. Four common philosophies are the following:
Approach to Principle dealing with moral issues Virtue ethicsThe ethical choice best reflects approach moral virtues in yourself and your community Utilitarian approachThe ethical choice produces the greatest excess of benefits over harm Fairness approach The ethical choice treats everyone 3/16/12 the same and shows no favoritism

3/16/12