You Name Here
1. What is Moore’s Law? What does it apply to?
2. What is a microprocessor? What devices do you or your family own that contain microprocessors (and hence are impacted by Moore’s Law)?
3. Why is Moore’s Law important for managers? How does it influence managerial thinking?
4. What three interrelated forces threaten to slow the advancement of Moore’s Law?
5. What is the advantage of using computing to simulate an automobile crash test as opposed to actually staging a crash?
6. What are the two characteristics of disruptive innovations?
7. Make a list of recent disruptive innovations. List forms that dominated the old regime and firms that capitalized after disruption. Are any of the dominant firms from the previous era the same as those in the postdisruptive era? For those firms that failed to make the transition, why do you think they failed?
8. What is dynamic pricing, and why might this be risky?
9. What is the long tail? How does the long tail change retail economics? How does it influence shoppers’ choice of where to look for products? What firms, other than Amazon, are taking advantage of the long tail in their industries?
10. What is channel conflict, and how has Amazon been subject to channel conflict?
Module 1: Introduction to Ethical Theories
Topics
Introduction to Ethical TheoriesTeleology (Consequentialism)Deontology (Rights and Duties)Computer Ethics
Introduction to Ethical Theories
The concepts of ethics, character, right and wrong, and good and evil have captivated humankind since we began to live in groups, communicate, and pass judgment on each other. The morality of our actions is based on motivation, group rules and norms, and the end result. The difficult questions of ethics and information technology (IT) may not have been considered by previous generations, but what is good, evil, right, and wrong in human behavior certainly has been. With these historical foundations and systematic analyses of present-day and future IT challenges, we are equipped for both the varied ethical battles we will face and the ethical successes we desire.
Although most of you will be called upon to practice applied ethics in typical business situations, you'll find that the foundation for such application is a basic understanding of fundamental ethical theories. These ethical theories include the work of ancient philosophers such as Plato and Aristotle. This module introduces the widely accepted core ethical philosophies, which will serve to provide you with a basic understanding of ethical thought. With this knowledge, you can begin to relate these theoretical frameworks to practical ethical applications in today's IT environment.
Let's start with a fundamental question: "Why be ethical and moral?" At the most existential level, it may not matter. But we don't live our lives in a vacuum—we live our lives with our friends, relatives, acquaintances, co-workers, strangers, and fellow wanderers. To be ethical and moral all.
You Name Here1. What is Moore’s Law What does it apply to.docx
1. You Name Here
1. What is Moore’s Law? What does it apply to?
2. What is a microprocessor? What devices do you or your
family own that contain microprocessors (and hence are
impacted by Moore’s Law)?
3. Why is Moore’s Law important for managers? How does it
influence managerial thinking?
4. What three interrelated forces threaten to slow the
advancement of Moore’s Law?
5. What is the advantage of using computing to simulate an
automobile crash test as opposed to actually staging a crash?
6. What are the two characteristics of disruptive innovations?
7. Make a list of recent disruptive innovations. List forms that
dominated the old regime and firms that capitalized after
disruption. Are any of the dominant firms from the previous era
the same as those in the postdisruptive era? For those firms that
failed to make the transition, why do you think they failed?
8. What is dynamic pricing, and why might this be risky?
9. What is the long tail? How does the long tail change retail
economics? How does it influence shoppers’ choice of where to
look for products? What firms, other than Amazon, are taking
advantage of the long tail in their industries?
10. What is channel conflict, and how has Amazon been subject
to channel conflict?
2. Module 1: Introduction to Ethical Theories
Topics
Introduction to Ethical TheoriesTeleology
(Consequentialism)Deontology (Rights and Duties)Computer
Ethics
Introduction to Ethical Theories
The concepts of ethics, character, right and wrong, and good
and evil have captivated humankind since we began to live in
groups, communicate, and pass judgment on each other. The
morality of our actions is based on motivation, group rules and
norms, and the end result. The difficult questions of ethics and
information technology (IT) may not have been considered by
previous generations, but what is good, evil, right, and wrong in
human behavior certainly has been. With these historical
foundations and systematic analyses of present-day and future
IT challenges, we are equipped for both the varied ethical
battles we will face and the ethical successes we desire.
Although most of you will be called upon to practice applied
ethics in typical business situations, you'll find that the
foundation for such application is a basic understanding of
fundamental ethical theories. These ethical theories include the
work of ancient philosophers such as Plato and Aristotle. This
module introduces the widely accepted core ethical
philosophies, which will serve to provide you with a basic
understanding of ethical thought. With this knowledge, you can
begin to relate these theoretical frameworks to practical ethical
applications in today's IT environment.
Let's start with a fundamental question: "Why be ethical and
moral?" At the most existential level, it may not matter. But we
don't live our lives in a vacuum—we live our lives with our
friends, relatives, acquaintances, co-workers, strangers, and
fellow wanderers. To be ethical and moral allows us to be
counted upon by others and to be better than we would
otherwise be. This, in turn, engenders trust and allows us to
3. have productive relationships with other people and in society.
Our ethical system, supported by critical thinking skills, is what
enables us to make distinctions between what is good, bad,
right, or wrong.
An individual's ethical system is based upon his or her personal
values and beliefs as they relate to what is important and is,
therefore, highly individualized. Values are things that are
important to us. "Values can be categorized into three areas:
Moral (fairness, truth, justice, love, happiness), Pragmatic
(efficiency, thrift, health, variety, patience) and Aesthetic
(attractive, soft, cold, square)" (Navran, n.d.). Moral values
influence our ethical system. These values may or may not be
supported by individual beliefs. For example, a person is faced
with a decision—he borrowed a friend's car and accidentally
backed into a tree stump, denting the fender—should he confess
or make up a story about how it happened when the car was
parked? If he had a personal value of honesty, he would decide
not to lie to his friend. Or, he could have a strong belief that
lying is wrong because it shows disrespect for another person
and, therefore, he would tell the truth. In either case, the ethical
decision making was influenced by his system of values or
beliefs. These may come from family, culture, experience,
education, and so on.
This discussion brings us to the term ethics. Frank Navran,
principal consultant with the Ethics Resource Center (ERC),
defines ethics as "the study of what we understand to be good
and right behavior and how people make those judgments"
(n.d.). Behavior that is consistent with one's moral values would
be considered ethical behavior. Actions that are inconsistent
with one's view of right, just, and good are considered unethical
behavior. However, it is important to note that determining what
is ethical is not just an individual decision—it also is
determined societally.
We will witness this larger social dimension in this course,
which is designed to provide you with an understanding of the
specific ethical issues that have arisen as information
4. technology has evolved over the last few decades. The very
changes that enhanced technology causes in society also create
ethical issues and dilemmas not previously encountered. The
lack of precedent in many areas, combined with the ease of
potentially operating outside of ethical paradigms, pose
significant challenges to end users, IT analysts, programmers,
technicians, and managers of information systems. We must be
prepared logically and scientifically to understand ethics and to
practice using ethical guidelines in order to achieve good and
right solutions and to plan courses of action in times of change
and uncertainty.
You can see from the benefits discussed above that knowledge,
respect for, and a deeper understanding of norms and laws and
their source—ethics and morals—is extremely useful. Ethical
thought and theories are tools to facilitate our ethical decision-
making process. They can provide the foundation on which to
build a great company, or to become a better and more
productive employee, a better neighbor, and a better person.
Still, some professionals may wonder "Why study ethics?"
Robert Hartley, author of Business Ethics: Violations of the
Public Trust (Hartley, 1993, pp. 322–324) closes his book with
four insights, which speak directly to this question for business
and IT professionals. They are:
· The modern era is one of caveat vendidor, "Let the seller
beware." For IT managers, this is an important reason to
understand and practice ethics.
· In business (and in life), adversity is not forever. But Hartley
points out that when business problems are handled unethically,
the adversity becomes a permanent flaw and results in company,
organization, and individual failure.
· Trusting relationships (with customers, employees, and
suppliers) are critical keys to success. Ethical behavior is part
and parcel of building and maintaining the trust relationship,
and hence business success.
· One person can make a difference. This difference may be for
good or evil, but one person equipped with the understanding of
5. ethical decision-making, either by acting on it or simply
articulating it to others, changes history. This sometimes takes
courage or steadfastness—qualities that spring from basic
ethical confidence.
In the world of information technology today and in the future,
the application of these ethical theories to day-to-day and
strategic decision making is particularly relevant. The ability to
garner personal, corporate, and governmental information and to
disseminate this data in thousands of applications with various
configurations and components brings significant
responsibilities to ensure the privacy, accuracy, and integrity of
such information. The drive to collect and distribute data at
increasing volume and speed, whether for competitive
advantage in the marketplace or homeland security cannot
overshadow the IT manager's responsibility to provide
appropriate controls, processes, and procedures to protect
individual and organizational rights.
Let's begin building our understanding of several predominant
ethical theories. Ethical theories typically begin with the
premise that what is being evaluated is good or bad, right or
wrong. Theorists seek to examine either the basic nature of the
act or the results the act brings about. As Deborah Johnson
(2001, p. 29) states in Computer Ethics, philosophical ethics is
normative (explaining how things should be, not how they are at
any given moment) and ethical theories are prescriptive
(prescribing the "desired" behavior). Frameworks for ethical
analysis aim to shape or guide the most beneficial outcome or
behavior. There are two main categories of normative ethical
theories: teleology and deontology. Telos refers to end and deon
refers to that which is obligatory. These theories address the
fundamental question of whether the "means justify the end" or
the "end justifies the means." Deontological ethical systems
focus on the principle of the matter (the means), not the end
result. In contrast, teleological ethical systems address the
resulting consequences of an action (the ends).
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6. Teleology (Consequentialism)
Teleological theories focus on maximizing the goodness of the
cumulative end result of a decision or action. In determining
action, one considers the good of the end result before the
immediate rightness of the action itself. These theories focus on
consequences of an action or decision and are often referred to
as consequentialism. Teleological theories include
utilitarianism, ethical egoism, and common good ethics.
Utilitarianism
The most prevalent example of a teleological theory is
utilitarianism, often associated with the writings of John Stuart
Mill and Jeremy Bentham. Utilitarianism looks for the greatest
good for the greatest number of people, including oneself.
Individual rights and entitlements are subservient to the general
welfare. There are two main subtypes: act-utilitarianism (for
which the rules are more like rules-of-thumb/guidelines) and
rule-utilitarianism (for which the rules are more tightly defined
and critical). Utilitarianism requires consideration of actions
that generate the best overall consequences for all parties
involved. This entails:
· cost/benefit analysis
· determination of the greatest good or happiness for the
greatest number
· identifying the action that will maximize benefits for the
greatest number of stakeholders of the organization
This quote explains a bit more: "The fathers of utilitarianism
thought of it principally as a system of social and political
decision, as offering a criterion and basis of judgment for
legislators and administrators" (Williams, 1993, p. 135).
Utilitarianism is geared to administrative and organizational
decision-making, given that in complex systems or
relationships, a single individual may not have the resources to
determine the overall benefit to the total number of people
affected by the decisions.
Ethical Egoism and Altruism
Egoism is maximizing your own benefits and minimizing harm
7. to yourself. This is sometimes thought of as behavioral
Darwinism, and clearly it guides decision-making with an eye
toward basic survival. Although different aspects of this theory
debate whether all human behavior is self-serving or should be
self-serving, it is impossible to know with certainty what
internally motivates an individual.
Altruism determines decisions and actions based on the interests
of others, the perceived maximized good for others, often at
one's own expense or in a way directly opposed to the egoist
alternative.
Further debate can be found over whether ethical egoism also
incorporates an element of altruism. For example, a network
engineer working for a vendor recommends to a client a network
security installation that generates a substantial commission for
the engineer. However, this installation also provides maximum
network security for the benefit of the client. Is this self-serving
or altruistic? The inability to distinguish pure motives in most
practical applications, along with the inherent conflict resulting
from competing self-interests, leads to an unsurprising result:
these theories are not typically used in generally accepted
frameworks for ethical decision-making.
The Common Good
The common-good approach comes from the teachings and
writings of Plato, Aristotle, Cicero, and Rawls. It is based on an
assumption that within our society, certain general conditions
are equally advantageous to all and should therefore be
maximized. These conditions include health care, safety, peace,
justice, and the environment. This is different from
utilitarianism in that utilitarianism strives for the maximum
good for the most (but not necessarily all) people. The common-
good approach sets aside only those conditions that apply to all.
All teleological theories focus on the end result: what's best for
me, what's best for you, or what's best for some or all of us.
One important factor in using teleological frameworks as a
guide to action is that you need to be able to understand
accurately and project the end result for the variety of affected
8. groups. For egoism and altruism, this is perhaps not difficult.
For larger, more remote, and less-well-understood groups,
teleological theories can lead to acts that in turn become the
bricks paving the road of good intentions. However, in
information technology, where many people are affected either
positively or negatively by the acts of a few, teleological
theories can be very helpful.
Return to top of page
Deontology (Rights and Duties)
Deontological theories focus on defining the right action
independently of and prior to considerations of the goodness or
badness of the outcomes. The prefix deon refers to duty or
obligation—one acts because one is bound by honor or training
to act in the right manner, regardless of the outcome.
Deontological theories include those that focus on protection of
universal rights and execution of universal duties, as well as
those that protect less universal rights and more specific duties.
These rights and duties are usually learned and are often
codified in some traditional way. For example, theologism is a
deontological theory based on the Ten Commandments. Boy
Scouts have a code that is intended as a guide to the rights of
others and personal duties. Deontology uses one's duty as the
guide to action, regardless of the end results.
Kant's Categorical Imperative
Deontological theories are most often associated with Immanuel
Kant and his categorical imperative. Kant's famous categorical
imperative takes two forms:
1. You ought never act in any way unless that way or act can be
made into a universal maxim (i.e., your act may be
universalized for all people), and
2. Act so that you treat humanity, whether in your own person
or that of another, always as an end and never only as a means.
Kant's duty-based approach might directly conflict with
teleological approaches, for in a utilitarian solution, individuals
could very easily serve as the means for other ends. Duty-based
ethical analysis leads a manager to consider the following
9. questions:
1. What if everyone did what I'm about to do? What kind of
world would this be? Can I universalize the course of action I
am considering?
2. Does this course of action violate any basic ethical duties?
3. Are there alternatives that better conform to these duties? If
each alternative seems to violate one duty or another, which is
the stronger duty?
Duty-Based Ethics (Pluralism)
A duty-based approach to ethics focuses on the universally
recognized duties that we are morally compelled to do. There
are several "duties" that are recognized by most cultures as
being binding and self-evident. These duties include being
honest, being fair, making reparations, working toward self-
improvement, and not hurting others. A duty-based approach
would put these obligations ahead of the end result, regardless
of what it may be. Pluralism includes the care-based ethical
approach based simply on the Golden Rule, "Do unto others as
you would have them do unto you."
Rights-Based Ethics (Contractarianism)
A rights-based approach to ethics has its roots in the social
contract philosophies of Rousseau, Hobbes, and John Locke.
These ideas are also at the foundation of the United States form
of government and history, and rights (whether natural or
granted by governments) are intensely held American
ideological values. Because the global information technology
leadership is fundamentally an American creation, contractarian
philosophical approaches in IT are widely used, even if we don't
think about it overtly. When invoking a rights-based or
contractarian framework, managers must carefully consider the
rights of affected parties:
· Which action or policy best upholds the human rights of the
individuals involved?
· Do any alternatives under consideration violate their
fundamental human rights (i.e., liberty, privacy, and so on)?
· Do any alternatives under consideration violate their
10. institutional or legal rights (e.g., rights derived from a contract
or other institutional arrangement)?
Fairness and Justice
The fairness-and-justice approach is based on the teachings of
Aristotle. It is quite simple: equals should be treated equally.
Favoritism, a situation where some benefit for no justifiable
reason, is unethical. Discrimination, a situation where a burden
is imposed on some who are not relevantly different from the
others, is also unethical. This approach is deontological because
it simply identifies a right and a duty, and does not specifically
consider the end result.
Virtue Ethics
Whereas teleological theories focus on results or consequences
and deontological theories relate to rights and duties, the virtue
ethics approach attributes ethics to personal attitudes or
character traits and encourages all to develop to their highest
potential. This theory includes the virtues themselves: "motives
and moral character, moral education, moral wisdom or
discernment, friendship and family relationships, a deep concept
of happiness, the role of emotions in one's moral life and the
fundamentally important questions of what sort of person I
should be and how I should live my life" (Hursthouse, 2003).
When faced with an ethical dilemma, a virtue ethicist would
focus on the character traits of honesty, generosity, or
compassion, for example, rather than consequences or rules.
Virtue ethics is included in the area of what is referred to as
normative ethics.
The table below helps to organize the various ethical theories
for you. Note that these theories have evolved over time, and
there are some overlapping ideas and theorists.
Major Ethical Theories
Theory
Key Players
Explanation
Utilitarianism
11. John Stuart Mill, Jeremy Bentham
Seeks the greatest good for the greatest number of people;
wants to make the world a better place
Egoism
Epicurus, Thomas Hobbes
Seeks to maximize one's individual benefit and minimize harm
to self; key idea: survival.
Altruism
Auguste Comte
Seeks to maximize decisions and actions based on interests of
others, even if at own individual expense; opposite of egoism.
Common Good
Plato, Aristotle, Cicero and Rawls
Based on the assumption that within society, we are all pursuing
common goals and values.
Duty-Based or Pluralism
Immanuel Kant
Based on Kant's categorical imperative: all acts can be made
into a universal maximum; act always as an end (not a means)
Rights-Based (Contractarianism)
Rousseau, Hobbes, and John Locke
Seeks action or policy that best upholds the human rights of
individuals involved (foundation for United States form of
government).
Fairness and Justice Approach
Aristotle
Equals should be treated equally; favoritism and discrimination
are unethical.
Virtue
12. Predominantly influenced by Plato and Artistotle
Seeks to encourage all to develop to their highest potential
Return to top of page
Computer Ethics
What is computer ethics? This term can be used in a variety of
ways. It may refer to applying traditional ethical theories to IT
situations, or it may entail the broader application that we see
with the prevalence of ethical codes, standards of conduct, and
new areas of computer law and policy. There also is an
increasing interest in how sociology and psychology relate to
computing. Scholars generally agree that the study of computer
ethics began with Norbert Wiener, an MIT professor who
worked during World War II to develop an anti-aircraft cannon.
His work in the 1940s prompted Wiener and his associates to
create a new field of study that Wiener labeled cybernetics.
Their work fostered the development of several ethical
conclusions regarding the potential implications of this type of
advanced technology. Wiener published his book, The Human
Use of Human Beings, in 1950. Although the term computer
ethics was not used by Wiener and it was decades later that the
term came into general use, his work certainly laid the
foundation for future study and analysis. His book became a
cornerstone for the study of computer ethics. In it, Wiener talks
about the purpose of human life and the four principles of
justice, but he also offers discussion, application, and examples
of what would come to be recognized as computer ethics.
(Bynum, 2001)
It wasn't until the 1970s that computer ethics began to garner
interest. Walter Maner, a university professor then at Old
Dominion University, offered a course in computer ethics to
examine the ethical problems created, exacerbated, or changed
due to computer technology (Bynum, 2001). Through the 70s
and 80s, interest increased in this area, and in 1985, Deborah
Johnson (previously referenced in this module) authored the
first textbook on the subject, Computer Ethics. Both Maner and
Johnson advocated the application of concepts from the ethical
13. theories of utilitarianism and Kantianism. However, in 1985,
James Moor published a broader definition of computer ethics
in his article "What is Computer Ethics?" He states: "computer
ethics is the analysis of the nature and social impact of
computer technology and the corresponding formulation and
justification of policies for the ethical use of such technology"
(Moor, 1985, p. 266). His definition was in line with several
frameworks for ethical problem-solving rather than the specific
application of any philosopher's theory. With the potentially
limitless ability of computing comes a dynamic, evolutionary
flow of related ethical dilemmas. Moor indicated that as
computer technology became more entwined with people and
their everyday activities, the ethical challenges would become
more difficult to conceptualize and do not lend themselves to
the development of a static set of rules (Moor, 1985).
Throughout the 1990s and continuing into the new millennium,
we've seen tremendous developments in the field of technology.
Not surprisingly, with these developments, we've seen the wide-
spread adoption of computers to almost every application
imaginable, including the affordability and prevalence of
computers in homes and businesses. Professional associations
have adopted codes of conduct for their members, organizations
have developed ethical codes and standards of conduct for
employees, and the IT field has focused increased efforts in
addressing the ethical situations and challenges that have
unfolded.
In the following modules, we will explore how to apply these
traditional theories and analysis and problem-solving
frameworks to effectively understand and address ethical
challenges in the information age.
Module 2: Methods of Ethical Analysis
Topics
Application of Ethical TheoriesMethods for Ethical Analysis
14. Application of Ethical Theories
In module 1, we acquired a foundation in classical ethical
theories. In this module, we will learn how to apply this
knowledge to ethical challenges in today's business world and,
more specifically, to the area of information technology.
As we learned in module 1, the main traditional ethical theories
tend to be either rule-based (deontological) or consequentialist
(teleological). Both types of theories provide a framework for
deciding whether actions are right, depending upon the
consequences that result from the action (consequentialist) or
whether the action follows the relevant rules for ethical
behavior (deontological). Traditional ethical theories were
intended to apply universally to ethical dilemmas and obviously
didn't factor in issues such as marketplace competition,
stockholders, and today's ever-changing world of information
technology. Today's IT manager needs to be able to address
ethical issues and to find resolutions in concrete business terms
rather than engage in a philosophical ethical debate. However,
we can use those theories to guide our ethical decision-making
process.
In addition to the ethical theories already presented, business
ethics attempts to take traditional ethics and apply them
practically to a business context. The normative theories of
business ethics (NTBE), introduced to the information systems
community in large part by Smith and Hasnas, provide three
basic approaches to ethical problems: stockholder, stakeholder,
and social contract theories (Smith, 2002). In this section, we
will introduce those theories as well as make connections to
classical theory.
Normative Theories of Business Ethics
As its name indicates, the stockholder theory of NTBE focuses
on making ethical decisions that benefit stockholders.
According to this theory, because stockholders have invested in
the company for their own profit, actions taken by the company
should be focused on benefiting the bottom line. A manager or
employee has a responsibility to use corporate resources in
15. ways that do not take away from the stockholders' benefits.
Stockholder theory instructs managers to act within legal
constraints. It does not instruct or encourage managers to ignore
ethical constraints.
Stakeholder theory expands a manager's responsibility beyond
the stockholders to include anyone with an interest in the firm.
This could include employees, customers, stockholders, and
potentially even competitors. Given that there is a potential
conflict among the interests of the various stakeholders, the
manager's challenge is to balance those interests and to provide
the best possible solution that does not substantially infringe on
any individual stakeholder group.
According to social contract theory, businesses have ethical
obligations to benefit society by fulfilling customer and
employee interests within the generally accepted rules or codes.
If there were a hypothetical contract between society and a
group of individuals who wished to establish a business, what
would the latter need from society—and what would society
expect in return? The terms of this hypothetical contract would
outline both those sets of expectations. Therefore, in giving the
group of individuals rights to act as an organization, use
resources, and hire employees, a society would have
expectations related to fair treatment of employees, appropriate
uses of natural resources, and so on. (Smith, 2002).
Figure 2.1 illustrates the various links between business ethics
and traditional ethical theories to show the continuing relevance
of the latter. To find out more about the connections between
NTBE and traditional ethics, click on the titles under Normative
Theories of Business Ethics and read the information contained
in the pop-up.
Figure 2.1
Linkages between Traditional Ethical and Business Ethics
Frameworks
(Adapted from Smith, H. J. (2002). Ethics and Information
Systems: Resolving the Quandaries. The DATABASE for
16. Advances in Information Systems (Summer 2002), p. 5.)
As you can see from the dotted lines in figure 2.1, the modern
and traditional elements do have connections and relationships
despite their various origins and applications. As you become
more familiar with each of these areas, the similarities and
differences will become clearer.
Try This 2.1: Booksellers, Inc - Please go to My Tools -> Self
Assessments-> to complete this self assessment.
Methods for Ethical Analysis
Now that you've had some practice in working through an
ethical decision-making scenario, let's look at various structured
approaches for addressing such situations. There are several
ways to systematically approach an ethical dilemma. Each has
merits, and each will result in an ethical decision if
straightforwardly and honestly applied. As you will see, the
various approaches are similar yet have somewhat different
slants.
Reynolds Seven-Step Approach
George Reynolds uses a seven-step ethical decision-making
approach that is summarized in table 2.1.
Table 2.1
Reynolds' Seven-Step Ethical Decision-Making Approach
Steps
Description
1. Get the facts
Before proceeding, ensure that you have assembled the relevant
facts regarding the ethical issue that you're addressing.
2. Identify the stakeholders
Identify who is impacted by this situation and its subsequent
resolution. Define what their role is as well as what would be
the best-case outcome for each stakeholder group.
3. Consider the consequences
What are the benefits and/or harm that could come from your
decision to you individually, the stakeholders, and the
organization as a whole?
17. 4. Evaluate the various guidelines, policies, and principles
First look to any applicable laws, then to any existing corporate
policies, ethical codes, and individual principles. Look at the
application of traditional ethical theories as well as Normative
Theories of Business Ethics.
5. Develop and evaluate options
You may identify several possible solutions and may find it
useful to support each with key principles that support the
recommendation. Your chosen solution should be ethically
defendable and, at the same time, meet the stakeholder and
organizational needs and obligations.
6. Review your decision
Review your decision in relationship to your personal and the
organization's values. Would others see this as a good and right
decision?
7. Evaluate the results
Did the final outcome achieve the desired results? This is an
important step to help develop and increase your decision-
making abilities.
(Adapted from Reynolds, G. W. (2003). Ethics in Information
Technology, pp.115-118.)
Kidder's Nine-Steps
In his book How Good People Make Tough Choices, Rushworth
Kidder presents a similar process; however, he defines four
dilemmas by which various moral issues could be categorized
(Kidder, 1995, p.18).
· Truth versus loyalty
· Individual versus community
· Short-term versus long-term
· Justice versus mercy
Kidder's Nine-Steps are:
1. Recognize that there is a moral issue.
2. Determine the actor (whose moral issue is it?).
3. Gather the relevant facts.
4. Test for right-versus-wrong issues.
5. Test for right-versus-right paradigms (what sort of dilemma
18. is this?).
6. Apply the resolution principles (ends-based, rule-based, or
care-based).
7. Investigate the "trilemma" options (look for common ground
or compromise).
8. Make the decision.
9. Revisit and reflect on the decision. (Kidder, 1995, p. 183-
187)
Kidder places "recognize that there is a moral issue" as the first
step in the analysis for two reasons. First, it helps to ensure that
issues receive the attention required. Secondly, it encourages a
person to adequately address moral questions and distinguish
moral issues from other situations involving social conventions
or contradictory values that could be "economic, technological,
or aesthetic" rather than moral issues (Kidder, 1995, p. 183).
After evaluating for legal compliance, Kidder advocates some
common sense checks such as "How would you feel if what you
are about to do showed up tomorrow morning on the front pages
of the nation's newspapers?" Then, he evaluates the issue to
identify which of the four dilemmas listed above apply to gain
better clarity around the dilemma, identifying the conflict at
hand. (Kidder, 1995, p. 184).
Spinello's Seven-Step Process
Richard Spinello provides a similar seven-step process for
ethical analysis designed specifically for IT professionals, and
it is geared toward development of public policy and law. His
sixth step entails adding an original normative conclusion: what
should happen? His seventh step includes the questions: "What
are the public-policy implications of this case and your
normative recommendations? Should the recommended behavior
be prescribed through policies and laws?" This approach can be
useful for IT organizations seeking to better structure and
define policies and procedures (Spinello, 1997, p. 45).
Here are all Seven-Steps:
1. Identify and formulate the basic ethical issues in each case.
Also, consider legal issues and whether ethical and legal issues
19. are in conflict.
2. What are your first impressions, your moral intuition about
the problem?
3. Consult appropriate formal guidelines, the ethical and/or
professional codes.
4. Analyze the issues from the viewpoint of one or more of the
three ethical frameworks.
5. Do the theories lead to a single solution, or do they offer
competing alternatives? If competing, which principle or avenue
of reasoning should take precedence?
6. What is your normative conclusion—what should happen?
7. What are the public-policy implications of this case and your
normative recommendations? Should the recommended behavior
be prescribed through policies and laws?
Many common business activities, such as process
improvement, problem solving, and project management, have
defined approaches to support their process. To effectively
make ethical decisions, it also is extremely useful to have a
structure to approach the problem. As a beginning step, have an
understanding of the available methodologies for approaching
the issue in an objective manner. Eventually, skill and
experience in applying the process will enable you to explain
your process and subsequent recommendations to other
stakeholders.
One of the challenges for those working in IT is the lack of
precedence in some situations. The more you can apply a well-
grounded methodology when faced with a new or ambiguous
ethical dilemma, the greater the likelihood that you can come to
an ethical solution that will effectively balance individual,
organizational, and/or social concerns with good business.
Ultimately, you need to use an analytical approach that works
for you and for your organization. It may be one of the
approaches we've discussed, or it may be a hybrid. Individual
values will also drive the approach. In addition to these
theories, corporations and professional associations have
attempted to provide guidance through corporate codes of
21. Chapter 6
Amazon.com: An Empire Stretching from Cardboard Box to
Kindle to Cloud
Learning Objectives
Appreciate the breadth of businesses in which Amazon
competes.
Understand that Amazon’s financial performance has not been
consistent.
Begin to recognize the reasons for this performance
inconsistency and set the stage for the examination unfolding in
subsequent sections.
Recognize how Amazon’s warehouse technology and systems
are designed to quickly and cost-effectively get product from
suppliers to customers with a minimum of error.
Understand how high inventory turns and longer accounts
payable periods help fuel a negative cash conversion cycle at
Amazon, and why this is a good thing.
Gain insight into various advantages that result from the firm’s
scale and cost structure.
Appreciate how data can drive advantages not fully available to
offline firms, ranging from increased personalization to
innovation and service improvements.
Learning Objectives
Identify the two sides in Amazon Marketplace network effects,
and why they are important in strengthening the firm’s brand.
Understand the financial advantages of goods sold through
22. marketplace vs. those that Amazon takes possession of and sells
itself.
Appreciate how mobile access is influencing opportunities
through additional changes in how, where, and when consumers
shop.
Understand the motivation behind Amazon’s Kindle business.
Recognize the various ways that Amazon earns money and
strengthens its competitiveness via the Kindle platform.
Examine the changes Amazon’s digital media offerings have
brought to the traditional publishing industry value chain.
Understand key concepts such as channel conflict, wholesale
pricing, and agency pricing.
Learning Objectives
Identify several of Amazon’s personal cloud offerings, how they
are used, and the value they provide both users and Amazon.
Understand Amazon’s cloud-computing offerings, the services
provided, the firms that use AWS (Amazon Web Services), the
size of this business, and the firm’s vision for its future growth.
Recognize why firms use cloud-computing platforms, and some
of the risks associated with giving up control of certain
infrastructure.
Amazon’s Profitability and Breadth of Business
Postponed profits and concentrated on:
Expanding warehousing capacity.
Building e-commerce operations worldwide.
Developing a cloud computing platform.
Pioneering in eBook readers.
Kindle business:
Mobile computing as a vehicle for media consumption.
Distribution channel for sales and advertising.
Creator of switching costs.
23. Gathering point for useful data.
AWS (Amazon Web Services) business:
Powerhouse cloud provider.
Generates new competitive assets.
Amazon’s Wheel of Growth
CUSTOMER EXPERIENCE
GROWTH
SELLERS
TRAFFIC
SELECTION
LOWER COST STRUCTURE
LOWER PRICES
Adapted from a Jeff Bezos napkin scribble.
Emperor of E-Commerce
Pillars of the business: Large selection, convenience, and lower
prices.
Work together to create additional assets for competitive
advantage.
Outstanding customer experience results in repeat customers.
As number of customers increase, more products can be offered.
Caters to third-party sellers.
Fulfillment Operations
New products are prepped for order within hours of arrival.
Problems with incoming shipments are dealt with as they occur.
Mass land: Area where fast-moving items get dropped for fast
pick-up.
Shelvers: Place slower-moving items on shelves.
Unique shelf code scanned for the location.
24. Similar products are stacked at different locations to minimize
pickup errors.
Workers use wireless devices to pick up the required items
quickly.
Software determines the optimal box size for each order.
Systems stamp names and addresses on sealed boxes.
Warehouse movements and productivity are continuously
tracked.
Cash Conversion Cycle
Account payable: Money owed for products and services
purchased on credit
Liquidity problems: Arise when organizations cannot easily
convert assets to cash
Inventory turns: Number of times inventory is sold or used
during a specific period
Period between distributing cash and collecting funds associated
with a given operation
Cash Conversion Cycle
INVENTORY
ACCOUNTS RECEIVABLES
CASH
25. ACCOUNTS PAYABLE
Internet Economics, Scale, and Pricing Power
Quantity: Selling more goods gives better bargaining power
with suppliers.
Size: Provides negotiating leverage to secure lower prices and
longer payment terms.
Physical presence: Absence of brick-and-mortar stores brings
down costs for real-estate, energy, inventory, and security.
Employee efficiency: Greater as shift workers work at constant
rates throughout the day.
Amazon’s Customer Obsession
To enhance customer experience, it pioneered:
1-click ordering
Customer reviews and recommendations
Bundles
Look and search inside the book
Where’s my stuff
Free supersaver shipping
Highest rating on the University of Michigan’s American
Customer Service Index.
26. Leveraging the Data Asset
Used to collect data and compare performance among two
options studied (A and B).
Cookie
Line of identifying text, assigned and retrieved by a web server,
and stored by your browser.
Collaborative filtering
Monitors trends among customer and uses the data to
personalize an individual customer’s experience.
A/B testing
Selection and Network Effects
27. Sellers can warehouse and ship products themselves or use
Amazon’s warehouses.
Two-sided network effect: Products get more valuable as two
distinct categories of participants expand.
Affiliate program: Firm rewards partners who bring in new
business, with a percentage of any resulting sales.
Acquisitions and expansion
Acquisition of other firms and the growth of new internal
businesses has enabled it to:
Broaden its product offerings.
Absorb potentially threatening competitors before they get too
big.
Experiment with new product offerings and services.
Integrate value-added businesses and technologies.
Amazon’s Kindle Business
Kindle connects customers to the firm’s product offerings and
inventory.
Firm’s top-selling product.
Arrives linked to the customer’s Amazon account.
The Kindle’s market position allowed it to undercut
competition:
Kindle Fire was offered at half the price of its competition.
Kindle versions are sold at or below costs.
Digital publishing enables titles to enter the market far faster
than physical offerings.
Channel Conflict
Amazon’s wholesale pricing was endangered by some publishers
switching to agency pricing.
28. Wholesale pricing: Paying publishers for titles and then selling
the books at whatever price it wanted.
Agency pricing: Publisher sets the price and the reseller gets a
cut.
When a firm’s potential partners see the firm as a threat, they
offer competing products via alternate channels and work
closely with threatening competitors.
Amazon and the Cloud
Kindle
Amazon Cloud Drive
Amazon Cloud Player
Amazon Web Services
Goal was to monetize the firm’s expertise in scalability and
reliability.
Stores purchase content off-device and can load a customer’s
virtual bookshelf on demand.
Offers file storage similar to Dropbox and Google Drive.
30. Technology V 3.0
By John Gallaugher
Chapter 5
Moore’s Law and More: Fast, Cheap Computing, Disruptive
Innovation, and What This Means for the Manager
Learning objectives
Define Moore’s Law and understand the approximate rate of
advancement for other technologies, including magnetic storage
(disk drives) and telecommunications (fiber-optic transmission).
Understand how the price elasticity associated with faster and
cheaper technologies opens new markets, creates new
opportunities for firms and society, and can catalyze industry
disruption.
Recognize and define various terms for measuring data
capacity.
Consider the managerial implication of faster and cheaper
computing on areas such as strategic planning, inventory, and
accounting.
Some Definitions
MOORE’S LAW
Chip performance per dollar doubles every eighteen months.
MICROPROCESSOR
31. Part of the computer that executes the instructions of a
computer program .
RANDOM ACCESS MEMORY (RAM)
Fast, chip-based volatile storage in a computing device.
VOLATILE MEMORY
Storage that is wiped clean when power is cut off from a device.
SOME DEFINITIONS
NONVOLATILE MEMORY
Storage that retains data even when powered down.
32. FLASH MEMORY
Nonvolatile, chip-based storage.
SOLID STATE ELECTRONICS
Semiconductor-based devices.
SEMICONDUCTORS
Substance such as silicon dioxide used inside most computer
chips that is capable of enabling and inhibiting the flow of
electricity.
OPTICAL FIBER LINE
High-speed glass or plastic-lined networking cable used in
telecommunications.
33. Advancing rates of technology
Change in Technological Capabilities by Year
Optical Fiber (bits per second) 0 1 2 3 4 5 6
1 2.5 6.35 16 40.299999999999997 101.59
256 Data Storage (bits per square inch) 0 1 2 3
4 5 6 1 2 4 8 16 32 64
Moore's Law (number of transistors 0 1 2 3 4
5 6 1 1.68 2.82 4.76 8 13.45 22.63
Evolution of the technological landscape
Price elasticity: Rate at which the demand for a product or
service fluctuates with price change.
Evolving waves of computing:
1960s - Mainframe computers
1970s - Minicomputers
1980s - PCs
1990s - Internet computing
2000s - Smartphone revolution
2010s - Pervasive computing:
Vision of embedding low-cost sensors, processors, and
communication into a wide array of products and the
environment.
Allow a vast network to collect data, analyze input, and
automatically coordinate collective action.
34. Learning Objectives
Describe why Moore’s Law continues to advance and discuss
the physical limitations of this advancement.
Name and describe various technologies that may extend the life
of Moore’s Law.
Discuss the limitations of each of these approaches.
The Death of Moore’s Law?
Moore’s Law is possible because the distance between the
pathways inside silicon chips gets smaller with each successive
generation.
Fabs: Semiconductor fabrication facilities
Silicon wafer: Thin, circular slice of material used to create
semiconductor device
Packing pathways tightly together creates problems associated
with size, heat, and power.
Chip starts to melt when the processor gets smaller.
Need to cool modern data centers draws a lot of power and that
costs a lot of money.
Quantum tunneling kicks in when chips get smaller .
Buying time
Multicore microprocessors: Contain two or more calculating
processor cores on the same piece of silicon.
Multicore chips outperform a single speedy chip, while running
cooler and drawing less power.
Now mainstream, most PCs and laptops sold have at least a two-
core (dual-core) processor.
Can run older software written for single-brain chips by using
only one core at a time.
Firms are radically boosting speed and efficiency of chips.
35. Taking chips from being paper-flat devices to built-up 3-D
affairs.
Transistors: Super-tiny on-off switches in a chip that work
collectively to calculate or store things in memory.
Learning objectives
Understand the differences between supercomputing, grid
computing, cluster computing, and cloud computing.
Describe how grid computing can transform the economics of
supercomputing.
Recognize that these technologies provide the backbone of
remote computing resources used in cloud computing.
Understand the characteristics of problems that are and are not
well-suited for parallel processing found in modern
supercomputing, grid computing, cluster computing, and multi-
core processors.
Discuss how network latency places limits on offloading
computing to the cloud.
A melding of minds
Supercomputers: Computers that are among the fastest of any in
the world at the time of their introduction.
Supercomputing was once considered the domain of
governments and high-end research labs.
Modern supercomputing is done by massively parallel
processing: Computers designed with many microprocessors
that work together, simultaneously, to solve problems.
Grid computing: Uses special software to enable several
computers to work together on a common problem as if they
were a massively parallel supercomputer.
Cluster computing: Connecting server computers via software
and networking so that their resources can be used to
36. collectively solve computing tasks.
A melding of minds
Multicore, massively parallel, grid, and cluster computing are
all related.
Each attempts to lash together multiple computing devices so
that they can work together to solve problems.
Software as a service (SaaS): Form of cloud computing where a
firm subscribes to a third party software and receives a service
that is delivered online.
Cloud computing: Replacing computing resources with services
provided over the Internet.
Server farms: Massive network of computer servers running
software to coordinate their collective use.
Latency: Delay in networking and data transfer speeds.
Low latency systems are faster systems.
Moore’s Law will likely hit its physical limit soon, but still-
experimental quantum computing could make computers more
powerful.
Learning objectives
Identify the two characteristics of disruptive innovations.
Understand why dominant firms often fail to capitalize on
disruptive innovations.
Suggest techniques to identify potentially disruptive
technologies and to effectively nurture their experimentation
and development.
Characteristics of Disruptive Technologies
They come to market with a set of performance attributes that
existing customers do not value.
37. Over time the performance attributes improve to the point where
they invade established markets.
Product Performance
Time
Performance demanded at the high end of the market
Performance demanded at the low end of the market
Incumbent market leader
Disruptive innovation
Source: Adapted from C. Christensen, The Innovator’s
Dilemma. Harvard Business School Press, 2013.
Why big firms fail
Failure to see disruptive innovations as a threat.
Reason: They do not dedicate resources to developing the
potential technology since these markets do not look attractive.
Creates blindness by an otherwise rational focus on customer
demands and financial performance.
Start-ups amass expertise quickly.
Big firms are forced to play catch-up.
Few ever close the gap with the new leaders.
Recognizing Potentially Disruptive Innovations
Remove short-sighted, customer-focused, and bottom-line-
obsessed blinders.
Have conversations with those on the experimental edge of
advancements.
Increase conversations across product groups and between
managers and technologists.
If employees are quitting to join a technology, it might be worth
considering.
38. When a Potential Disruptor is Spotted
Build a portfolio of options on emerging technologies, investing
in firms, start-ups, or internal efforts.
Focus solely on what may or may not turn out to be the next big
thing.
Options give the firm the right to continue and increase funding
as a technology shows promise.
If a firm has a stake in a start-up, it may consider acquiring the
firm.
If it supports a separate division, it can invest more resources if
that division shows promise.
Encourage new market and technology development.
Focus while isolating the firm from a creosote bush-type of
resource sapping from potentially competing cash-cow efforts.
Learning Objectives
Understand the magnitude of the environmental issues caused
by rapidly obsolete, faster, and cheaper computing.
Explain the limitations of approaches attempting to tackle e-
waste.
Understand the risks firms are exposed to when not fully
considering the lifecycle of the products they sell or consume.
Ask questions that expose concerning ethical issues in a firm or
partner’s products and processes, and that help the manager
behave more responsibly.
E-waste
May be toxic since many components contain harmful materials
such as lead, cadmium, and mercury.
It also contains small bits of increasingly valuable metals such
39. as silver, platinum, and copper.
Requires recycling, which is extremely labor intensive.
Most of the waste is exported for recycling,
Discarded, often obsolete technology associated with negative
externalities
E-waste
Managers must consider and plan for the waste created by their:
Products, services, and technology used by the organization.
Managers must audit disposal and recycling partners with the
same vigor as their suppliers and other corporate partners.
