Chapter 15 Social, Ethical, and Legal Issues
253
Chapter 15
Social, Ethical, and Legal Issues
Objectives and Overview
The purpose of this chapter is to make future managers aware of and sensitive to the social,
ethical, and legal issues associated with the use of information technology (IT).
The chapter begins with a short introduction to the complex legal environment that is faced with a
rapidly changing technological environment and is also increasingly stressed by the development
of the Internet and the increasing globalization of our economy. Then there is a discussion of a
The remainder of the chapter is devoted to discussion of a number of social issues along with
their legal and ethical aspects. Our first major topic is privacy, a topic of major concern to only a
minority of people, but those who are concerned may be very passionate about it. The growth of
large databases and the Internet have made it possible for the first time in history to easily access
The second topic, identity theft, is an example of the damage that can be caused by a violation of
your personal privacy that allows someone else to assume your identity and obtain access to your
financial resources. Prevention of, and recovery from, identity theft presents a complex set of
legal and ethical issues.
Our third major topic is intellectual property rights. This is a very complex area in all three
aspects social, ethical, and legal. Because the students are probably involved in downloading
Chapter 15 Social, Ethical, and Legal Issues
Teaching Suggestions
1. There is a lot of material covered in this chapter, so you may want to pick out a few issues for
3.
software. Most of your students will probably argue that this is not a significant ethical issue.
Review Questions
1. What is meant by the term identity theft? What can happen to a person who is the victim
of identity theft?
According to the Federal Trade Commission (FTC), identity theft is the act of someone appropriating
your personal information without your knowledge to commit fraud or theft. An identity thief uses
information about you, such as your name, address, social security number, credit card number, or
ifier) so valuable that
someone might steal it?
3. Describe the services provided by a credit reporting service such as Experian, Equifax,
and TransUnion. How are these services provided?
Chapter 15 Social, Ethical, and Legal Issues
255
4. What do U.S. laws require a financial company to do in regard to sharing information
that it has collected on its customers?
The Gramm-Leach-Bliley Act (GLBA) provides limited privacy protections against the sale of
this private financial information as follows:
5. What is the difference between a copyright and a patent on a computer program?
The ownership rights of developers of computer software are protected by both copyrights and
patents. One cannot copyright an idea, but one can copyright a specific written expression of
that idea, whether it is on paper, magnetic disk, CD, or in some other electronic form. Computer
Chapter 15 Social, Ethical, and Legal Issues
256
6. In reference to a company sharing information that it has collected about a customer, what is
– –
–
7. Has IT created an ethical problem for you or someone you know? Explain.
Discussion Questions
1. Suppose you are the victim of an identity thief who continues to use your identity and to ruin
your credit rating after you have discovered the problem. What problems do you have in
clearing your name? How could the laws be changed to help you in this process?
First, you have to prove that you are the victim of identity theft which may be difficult when the
police will not even accept your report of the crime. Then you have to deal with each of your
Chapter 15 Social, Ethical, and Legal Issues
257
2.
?
Those are idealistic ideas, but impractical. If access to computers were to be unlimited there
3. Spam on the Internet is a growing problem. Why is spam so attractive to some marketers?
To what degree can spam be controlled by laws? Are there other ways that spam might be
controlled? How?
Spam is attractive because it can be distributed at practically zero cost once you have the e-mail
addresses. At zero cost a microscopic positive response rate can still be very profitable.
There are laws prohibiting spam, but they are not effective. In the first place, it is difficult to
cultural and a technological change to the Internet, so it would be a last resort.
4.
property and real property? Should someone be able to own intellectual property? Why or
why not?
Intellectual property is any product of the human mind, such as an idea, an invention, a literary
creation, a work of art, a business method, an industrial process, a chemical formula, a computer
program, or a presentation.
258
5. The U.S. Patent Office is granting patents on computer processes such as Amazon –
-supported business processes?
Why or why not?
This is not an easy question. It would seem that we should be very careful about wholesale
6. In your opinion, what is the most important social issue raised by the pervasiveness of IT?
Why? How can society best deal with this issue?
This question should lead to a number of different choices and some interesting discussion.
7. The RIAA asserts that downloading copyrighted music on the Internet without paying for it
is stealing, but lots of people are doing it. Is this ethical? Why or why not? If this is not ethical,
why are so many people doing it?
It is hard to argue that taking intellectual property that someone has created to sell is not
8. In the United States, information that a company collects about the customer is legally the
Explain why there is this difference in the legal treatment of this information.
9. In order to protect against terrorists, the U.S. government is collecting more and more data
on individuals into comprehensive databases. Have you any concerns about this? Why or why
not?
When this information is scattered through many different databases it is difficult to get access
Chapter 15 Social, Ethical, and Legal Issues
259
10. Although this practice might invade individual privacy, many companies use IT to measure
ations of this
practice.