Strategic and Ethical Issues in Outsourcing Information Technologies

Outsourcing of information technology (IT) is the transfer of a company’s information technology functions to external vendors. Ordinarily, such transfer is considered only with regard to its strategic and economic impact on the organization. However, as the recent practice demonstrated, cost-benefit considerations and other strategic considerations are not sufficient to analyze an outsourcing case. Important ethical concerns relating to fiduciary responsibilities, insiders’ bidding for outsourcing contracts, and the like, are also pertinent to the analysis of outsourcing. This chapter will identify major ethical problems and will propose guidelines for ethical conduct in the process of outsourcing IT. Such guidelines could have broad practical implications for the practice of outsourcing. The chapter will analyze literature on outsourcing models and professional ethical standards. It will have the following structure. First, the benefits and models of outsourcing information technology will be discussed. Second, ethical literature in general and professional organizations’ codes of ethics in particular will be considered. Third, a recent case of IT outsourcing will be presented and analyzed. The ethical standards established in the thesis will be applied to the case. Finally, generalized ethical guidelines will be suggested for outsourcing models.

Social Issues in Electronic Commerce

Policy implementation for electronic commerce is a complex process since policy makers, national governments in their majority, have to act in a fast changing environment. They need to balance special national demands with international cooperation (Papazafeiropoulou & Pouloudi, 2000). One of the areas that policy makers have to tackle is dealing with barriers that have been reported in the adoption of electric commerce today. These barriers are mostly derived from factors such as lack of awareness about the opportunities offered by electronic commerce as well as lack of trust to ward network security. Additionally the current legislative framework, drawn before the advent of electronic commerce, is perceived as outdated, thus impeding the expansion of online transactions. Policy makers, therefore, find it increasingly critical to update commerce legislation (Owens, 1999; Shim et al., 2000; the White House, 1999) and take other measures to facilitate the uptake of electronic commerce.

Software Piracy

Despite the existence of laws and much publicity surrounding software piracy, it is widely believed that software piracy is commonplace (Eining & Christensen, 1991; Simpson, Banerjee, & Simpson, 1994). A recent study (i.e., Business Software Alliance, 1999) confirms that software piracy is increasing, with a 2.5 percent increase in piracy in 1998 over 1997, resulting in $3.2 billion in losses to organizations in the United States and $11 billion worldwide. Yet reasons why such illegal behavior continues to occur are lacking. While some attempts have been made at AACSB-accredited schools of business to incorporate ethics education into business programs, there is no knowledge of such education’s relationship to actual behavior, nor is there knowledge on what exactly should be taught. Because previous educational, software-based safeguards, and attempts at raising awareness have failed to stop software piracy, some researchers (e.g., Simpson et al., 1994) believe that only when contributory factors are isolated can appropriate measures be taken to reduce software piracy. In addition, Watson and Pitt (1993) suggest that software piracy research lacks attention to individual factors, important for further understanding of the phenomenon.

Method over Mayhem in Managing e-Commerce Risk

Under the system of e-commerce, organisations leave themselves open to attack which can have catastrophic consequences. Recent well-publicised business disruptions to firms such as Northwest Airlines and Ebay have had significant business impacts. The chapter identifies the differences in risk management approaches for older information technology systems and those required for e-commerce. The benefits and the critical success factors for an e-commerce risk management methodology are identified and discussed. A literature survey revealed the existence of only two methodologies with potential suitability for e-commerce risk management. They are evaluated against the critical success factors. The chapter recommends a program of research to make risk management more dynamic and interactive particularly for the operational aspects of e-commerce.

The Societal Impact of World Wide Web - Key Challenges for the 21st Century

Many lessons from history offer strong evidence that technology can have a definite effect on the social and political aspects of human life. At times it is difficult to grasp how supposedly neutral technology might lead to social upheavals, mass migrations of people, and shifts in wealth and power. Yet a quick retrospective look at the last few centuries finds that various technologies have done just that, challenging the notion of the neutrality of technology. Some examples include the printing press, railways, and the telephone. The effects of these technologies usually begin in our minds by changing the way we view time and space. Railways made the world seem smaller by enabling us to send goods, people, and information to many parts of the world in a fraction of the time it took before. Telephones changed the way we think about both time and distance, enabling us to stay connected without needing to be physically displaced. While new technologies create new opportunities for certain individuals or groups to gain wealth, there are other economic implications with a wider ranging impact, political and social. Eventually, as the technology matures, social upheavals, mass migrations and shifts in economic and political power can be observed. We find concrete examples of this dynamic phenomenon during the Reformation, the industrial revolution, and more recently, as we witness the ongoing information technology revolution.

Ten Lessons that Internet Auction Markets Can Learn from Securities Market Automation

Internet auction markets offer customers a compelling new model for price discovery. This model places much more power in the hands of the consumer than a retail model that assumes price taking, while giving consumers choice of vendor and product. Models of auction market automation has been evolving for some time. Securities markets in most countries over the past decade have invested significantly in automating various components with database and communications technologies. This paper explores the automation of three emerging market exchanges ( The Commercial Exchange of Santiago, The Moscow Central Stock Exchange, and Shanghai’s Stock Exchange ( with the intention of drawing parallels between new Internet models of retailing and the older proprietary networked markets for financial securities.

A New Approach to Evaluating Business Ethics

Stimulated by recent high-profile incidents, concerns about business ethics have increased over the last decade. In response, research has focused on developing theoretical and empirical frameworks to understand ethical decision making. So far, empirical studies have used traditional quantitative tools, such as regression or multiple discriminant analysis (MDA), in ethics research. More advanced tools are needed. In this exploratory research, a new approach to classifying, categorizing and analyzing ethical decision situations is presented. A comparative performance analysis of artificial neural networks, MDA and chance showed that artificial neural networks predict better in both training and testing phases. While some limitations of this approach were noted, in the field of business ethics, such networks are promising as an alternative to traditional analytic tools like MDA.

One Size Does Not Fit All

Managers, IT practitioners, and IS researchers are easily seduced by the latest information technology wave. Consequently, we tend not to question conventional assumptions about the implementation of IT systems in organizations. Instead of providing managers with directions, IS researchers can sometimes turn into prognosticators of the latest information technology fad. We call on researchers to delve below the surface of new IT trends to expose inconsistencies between technological promises and the reality of deploying information systems in global organizations. Many IS researchers are turning their attention to the area of global information management (Gallupe and Tan, 1999). This journal is a vehicle for publishing such research work. Interest in integrated global information systems is fueled both by the developments in information and communications technologies and the trends in business towards globalization of products and markets. Conventional wisdom suggests that businesses operating in global markets would benefit from implementing global information systems and achieve economies of scale and scope. This may be true in some cases, but does it hold for all cases? I suggest it may not. In certain cases deploying global IT systems could lead to diseconomies of scale.

The Government "Downunder" Attempts to Censor the Net

In western tradition information ethics has its origins in Athenian democracy. It was characterised by an oral culture and freedom of speech. Later, after a great struggle, freedom of written expression was added. In this age of electronic networks freedom of access to the Internet must be added. Currently, this freedom is under sustained attack worldwide. The Australian Government has joined this attack with the passage of the “Broadcasting Services Amendment (Online Services) Bill 1999. The legislative purpose is to regulate access to content that is offensive to a “reasonable adult” and unsuitable for children. This chapter reports the results of an analysis of the primary sources regarding the Bill. Specifically, it reports on the important issues that were addressed in the parliamentary hearings and debates. It also comments on the success of the legislation after 8 months of operation. Documentation of the Australian experience should inform other countries that are currently attempting to understand and resolve these complex issues, or for those who will attempt to do so in the future.

Kierkegaard and the Internet

In the last decade of the twentieth century, with the advent of computers networked through Internet Service Providers and the declining cost of such computers, the traditional topography of secondary and post-secondary education has begun to change. Where before students were required to travel to a geographically central location in order to receive instruction, this is often no longer the case. In this connection, Todd Oppenheimer writes in The Atlantic Monthly that one of the principal arguments used to justify increasing the presence of computer technology in educational settings is that “[W]ork with computers – particularly using the Internet – brings students valuable connections with teachers, other schools and students, and a wide network of professionals around the globe.”1 This shift from the traditional to the “virtual” classroom2 has been welcomed by many. As Gary Goettling writes, “[D]istance learning is offered by hundreds, if not thousands, of colleges and universities around the world, along with a rapidly growing number of corporate and private entities.”3 Goettling’s statement echoes an earlier claim by the University of Idaho School of Engineering that one of the advantages of using computers in distance education is that they “increase access. Local, regional, and national networks link resources and individuals, wherever they might be.”4