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Chapter 10
Ethics of IT Organizations
At a Glance
Instructor’s Manual Table of Contents
• Overview
• Objectives
• Teaching Tips
Lecture Notes
Overview
Chapter 10, “Ethics of IT Organizations,” covers a range of ethical issues facing IT
organizations, including those associated with the use of nontraditional workers, such as
temporary workers, contractors, consulting firms, H-1B workers, and the use of outsourcing and
offshore outsourcing. Also raised is the issue of discriminatory hiring practices at many large IT
Objectives
As students read this chapter, they should consider the following questions:
• What key legal and ethical issues are associated with the use of contingent workers, H-1B
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Teaching Tips
Organizations Behaving Badly
1. Ask students to share their views on whether (and why) hiring a diverse workforce is
important and beneficial for tech firms.
I. Use of Contingent Workers
1. Introduce the term contingent work–a job situation in which an individual does not have
an explicit or implicit contract for long-term employment.
2. Explain that a firm is likely to use contingent IT workers if it experiences pronounced
A. The Gig Economy
1. Note that the term gig, which originated in the entertainment business, refers to a short-
term job.
2. The Bureau of Labor Statistics refers to a gig as a “a single project or task for which a
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3. Employers are desperate for highly qualified workers with specialized skills. And thanks
to the power of the Internet and the nature of much IT work, those individuals may be
B. Independent Contractors
1. Introduce the term independent contractor—an individual who provides services to
another individual or organization according to terms defined in a written contract or
C. Advantages of Using Contingent Workers
1. Point out that when a firm employs a contingent worker, it does not usually have to
provide benefits such as insurance, paid time off, and contributions to a retirement plan.
D. Disadvantages of Using Contingent Workers
1. Note that one downside to using contingent workers is that they may not feel a strong
E. Deciding When to Use Contingent Workers
1. Explain that when an organization decides to use contingent workers for a project, it
should recognize the trade-off it is making between completing a single project quickly
and cheaply versus developing people within its own organization.
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organization wants to use contingent employees.
Quick Quiz 1
1. _____ is a job situation in which an individual does not have an explicit or implicit
contract for long-term employment.
2. The _____ refers to a work environment in which temporary positions are common and
organizations contract with independent workers for short-term engagements.
3. In _____, a business transfers all or part of its workforce to another firm, which handles
all human resource-related activities and costs, such as payroll, training, and the
administration of employee benefits.
5. (True or False) Most contingent workers feel a strong connection to the company for
which they are working because they are grateful for the work.
Critical Thinking Exercise: Google Mismanages Independent Contractors
1. In this case, Google seems to have set up rules for the contractor that allowed the
company to have many of the benefits of a hiring an employee (it dictated which
equipment and software the employee would have to use to complete the work, it
For another perspective on contingent workers, read the following Forbes article,
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II. H-1B Workers
1. An H-1B visa is a temporary work visa granted by the U.S. Citizenship and Immigration
Services (USCIS) for people who work in specialty occupations—jobs that require at
2. Use Table 10-4 to aid a discussion of the cities with the most H-1B visa workers in 2016.
3. Point out that each year the U.S. Congress sets an annual cap on the number of H-1B
4. Note that in 2015, USCIS approved a total of 275,317 H-1B petitions submitted on behalf
of alien workers. Of these, 70,902 initial employment H-1B petitions plus an additional
A. Using H-1B Workers Instead of U.S. Workers
1. In order to compete in the global economy, U.S. firms must be able to attract the best and
B. Gaming the H1-B Visa Program
1. An important point to make is that even though companies applying for H-1B visas must
2. Because wages in the IT field vary substantially, unethical companies can get around the
average salary requirement.
3. Explain that companies that employ H-1B workers are required to declare that they will
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in 2015.
C. The Need for H-1B Workers
1. Explain that the heads of many U.S. companies complain that they have trouble finding
enough qualified IT employees and have called for fewer restrictions on visas for
2. Point out that according to the Bureau of Labor Statistics, the IT sector will add close to
3. Next, explain that according to the National Center for Education Statistics, there are
some 130,000 new computer and information science graduates each year to fill what the
4. Emphasize that opinions vary as to whether or not hiring of H-1B workers affects job
opportunities and wages for U.S. workers. Note that many factors affect an individual’s
5. Point out, however, that the law of supply and demand makes clear that where the supply
of workers exceeds the demand for workers for a specific job classification in a specific
geographic area, one can expect unemployment and a decrease in salaries.
Critical Thinking Exercises: New H-1B Workers at Your Firm
1. Students answers to this will vary. Encourage them to consider all of the information
regarding the pros and cons of the H-1B visa program presented in this chapter. After
Ask students to discuss whether or not they believe that the H-1B worker
program takes technical jobs from U.S. employees. Is it a good program for those
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III. Outsourcing
1. Introduce the term outsourcing—a long-term business arrangement in which a company
2. Point out that coemployment legal problems with outsourcing are minimal because the
company that contracts for the services does not generally supervise or control the
A. Offshore Outsourcing
1. Explain that offshore outsourcing is a form of outsourcing in which the services are
2. Many U.S. software firms set up development centers in low-cost foreign countries where
they have access to a large pool of well-trained candidates.
3. Organizations must consider many factors when deciding where to locate outsourcing
B. Pros and Cons of Offshore Outsourcing
1. Note that the wages that an American worker might consider low represent an excellent
2. Explain that, for example, offshore demand is driving up salaries in India by roughly 15
To learn more about outsourcing, including careers related to outsourcing, visit
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4. It is important to note that while offshore outsourcing can save a company in terms of
labor costs, it will also result in other expenses. In determining how much money and
time a company will save with offshore outsourcing, the firm must take into account the
additional time that will be required to select an offshore vendor as well as the additional
C. Strategies for Successful Offshore Outsourcing
1. Walk through the five factors that a company must consider when evaluating an
2. Explain that to ensure that company data is protected in an outsourcing arrangement,
3. Note that a successful SSAE No. 16 audit report demonstrates that an outsourcing firm
has effective internal controls in accordance with the Sarbanes-Oxley Act of 2002.
Critical Thinking Exercise: Pros and Cons of Outsourcing
1. Before making a decision, students would also need to know what the cost savings would
be if the project was outsourced to a U.S. company. They should also get a better
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Quick Quiz 2
1. A(n) _____ is a temporary work visa granted by the U.S. Citizenship and Immigration
Services (USCIS) for people who work in specialty occupations.
2. A person can work for a U.S. employer as an H-1B employee for a maximum continuous
period of _____ years.
3. In a(n) _____ arrangement, services are provided by an organization whose employees
are in a foreign country.
5. (True or False) Any work done at a relatively high cost in the United States may become
a candidate for offshore outsourcing.
6. (True or False) The primary rationale for outsourcing is to lower costs, but companies
also use it to obtain strategic flexibility and to keep their staff focused on the company’s
core competencies.
IV. Whistle-Blowing
1. Introduce the term whistle-blowing—an effort to attract public attention to a negligent,
2. Explain that in most cases, whistle-blowers act ethically in an attempt to correct what
they think is a major wrongdoing, often at great personal risk.
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organization.
A. Protection for Whistle-Blowers
1. Explain that there are no comprehensive federal laws to protect all whistle-blowers from
2. Introduce the terms False Claims Act and qui tam.
3. Point out that violators of the False Claims Act are liable for three times the dollar
amount for which the government was defrauded. They can also be fined civil penalties
B. Whistle-Blowing Protection for Private-Sector Workers
1. Under state law, an employee could traditionally be terminated for any reason, or no
reason, in the absence of an employment contract. However, many states have created
C. Dealing with a Whistle-Blowing Situation
1. Emphasize that each potential whistle-blowing case involves different circumstances,
2. Note that while it is impossible to outline a definitive step-by-step procedure for how to
Assess the Seriousness of the Situation
1. Explain that before considering whistle-blowing, a person should have specific
To learn about the National Whistleblower Center, an organization dedicated to
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Begin Documentation
1. Note that an employee who identifies an illegal or unethical practice should begin to
Attempt to Address the Situation Internally
1. Point out that an employee should next attempt to address the problem internally by
Consider Escalating the Situation within the Company
1. Explain that the employee’s initial attempt to deal with a situation internally may be
unsuccessful. At this point, the employee may rationalize that he or she has done all that
Assess the Implications of Becoming a Whistle-Blower
1. Explain that if whistle-blowers feel they have made a strong attempt to resolve the
2. Depending on the situation, an employee may incur significant legal fees in order to air or
Use Experienced Resources to Develop an Action Plan
1. Note that a whistle-blower should consult with competent legal counsel who has
Execute the Action Plan
1. Point out that a whistle-blower who chooses to pursue a matter legally should do so based
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Live with the Consequences
1. It is important to note that whistle-blowers must be on guard against retaliation, such as
Critical Thinking Exercise: Whistle-Blower Situation?
1. In considering whether this situation rises to the level of a potential whistle-blowing
situation, students should weigh factors such as the transparency of the review and voting
process, whether or not they were allowed to put their objections into the record (and
V. Green Computing
1. Point out that electronic devices such as personal computers and smartphones contain
hundreds—or even thousands—of components which are, in turn, composed of many
2. Introduce the term green computing, which is concerned with the efficient and
environmentally responsible design, manufacture, operation, and disposal of IT-related
3. Note that the three goals of green computing are: (1) reduce the use of hazardous
4. Point out that many organizations recognize that going green is in their best interests in
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6. Emphasize that until manufacturers stop using these toxic substances, safe disposal and
7. It is important to note that in many cases, recycling companies export large quantities of
8. Introduce the EPEAT (Electronic Product Environmental Assessment Tool), a system
9. Point out that under EPEAT, products are ranked in three tiers of environmental
performance. Use Table 10-8 to aid the discussion.
Critical Thinking Exercise: Moving to Green Computing
1. Students answers to these questions will vary. Combining data sources may offer more
green benefits over time, but the move would come with some up-front financial costs as
Quick Quiz 3
1. _____ is an effort to attract public attention to a negligent, illegal, unethical, abusive, or
Teaching
Tip
To learn more about the EPEAT, visit: www.epeat.net.
Teaching
Tip
Ask the students how they would go about safely disposing of obsolete
computers. Are there manufacturer or government programs to assist them?
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dangerous act by a company or some other organization.
2. The _____ was enacted during the U.S. Civil War to combat fraud by companies that
sold supplies to the Union Army.
3. (True or False) Violators of the False Claims Act are liable for ten times the dollar
amount for which the government was defrauded.
4. The three goals of green computing are (1) _____, (2) allow companies to lower their
power-related costs, and (3) enable the safe disposal or recycling of computers and
computer-related equipment.
5. _____ is a system that enables purchasers to evaluate, compare, and select electronic
products based on a total of 51 environmental criteria.
Discussion Questions
1. Are jobs in the IT industry the only jobs that are outsourced offshore? Are there jobs in
the IT industry that cannot be effectively outsourced offshore?
2. When a similar trend toward outsourcing in the manufacturing industry occurred in the
Additional Projects
1. Visit the website for the National Center for Women & Information Technology
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women in IT, and write a paper documenting your findings.
2. Is there any way to regulate offshore outsourcing? If so, would this be desirable? Write a
Additional Resources
1. “Working in a Gig Economy,” Bureau of Labor Statistics
2. “Emerging Trends for H–1B Petitions,” Society for Human Resource Management
Key Terms
coemployment relationship: An employment situation in which two employers have actual or
potential legal rights and duties with respect to the same employee or group of employees.
contingent work: A job situation in which an individual does not have an explicit or implicit
contract for long-term employment.
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printer supplies.
H-1B visa: A temporary work visa granted by the U.S. Citizenship and Immigration Services
(USCIS) for people who work in specialty occupations—jobs that require a four-year bachelor’s
degree in a specific field, or equivalent experience.
offshore outsourcing: A form of outsourcing in which services are provided by an organization
whose employees are in a foreign country.
outsourcing: A long-term business arrangement in which a company contracts for services with
an outside organization that has expertise in providing a specific function.