The Effects of Technology on Ethics in the Workplace
Briefing Booklet

University of Maryland, Graduate School of Management and Technology
Susan Anstead, Kevin Craig, Robert Cuellar, Kamal Sheikh
December 1, 2000



Problem Statement
Technology and Business
Technology-Ethics Gap
Law Versus Ethics
Ethics Issues
    Employee Privacy
    Customer Privacy
    Copyright Violations
    Intellectual Property
Technology Advances Business Ethics in the Workplace
According to recent studies, technology is having a profound affect on ethics in the workplace.  One study found that nearly half of those polled said they had engaged in some sort of unethical action related to new technology within the last year. (McDonald, 1998)  Technology is also making the definition of ethical behavior even more unclear.  A second study found that one out of every six Americans believes traditional ideas of right and wrong have been made obsolete by new technologies. (Semas, 1998)
With new technological changes, managers are attempting to cope with the ethics of regulating the use of technology.  They must understand the new ethical issues, as well as laws that affect how those issues are handled.  These are areas of growing concern in the workplace, especially with the arrival of the Internet.
In our report, Group 1 will further examine how technology affects ethics in the workplace.  We will define the major ethical issues, outline laws that have been enacted to address some of these issues, and discuss what resources managers can use to assist them in managing these complex issues.

Technology has increased the potential for unethical practices and behavior. Of course, the meaning of ethical behavior is open to interpretation. As you will see from the examples in this paper, many people think certain practices are ethical while others believe those same practices are unethical. One example we discuss is that 54 percent of people (polled in McDonald’s 1988 survey) believe that using the office PC for personal online shopping is unethical, which means the other 46 percent think it is ethical.

Additionally, technology has made it much easier to do unethical things such as downloading inappropriate material from the Internet as well as stealing private information about another individual. Laws are currently being written trying to combat privacy and copyright issues.

Companies are developing ethics training programs, which specify the difference between ethical and unethical. These programs help diminish the potential for serious ethical problems and advise people on what to do when the see fellow employees engaged in unethical practices.

Now let’s take a closer look at ethics in the workplace and how they are effected by technology.


According to a study released in July 1998, technology is increasing the risk of unethical and illegal business practices.  The survey--conducted by the American Society of Chartered Life Underwriters & Chartered Financial Consultants, along with the Ethics Officer Association--polled a total of 726 respondents from a cross-section of American workers. Nearly half of those polled said they had engaged in some sort of unethical action related to new technology within the last year. (McDonald, 1998)

The most frequently cited action was "creating a potentially dangerous situation by using new technologies while driving." The next most common was "wrongly blaming an error you made on a technical glitch." (McDonald, 1998)

The stated objective of the study was to determine whether the advance of workplace technology increases the risk of unethical and illegal practices--an issue of obvious concern to insurance underwriters. The report does not establish whether there is a direct correlation between new technology and increased risk of unethical behavior (potentially leading to lawsuits). There are, however, many interesting numbers:  (McDonald, 1998)

Perhaps even more interesting are respondents' views of what constitutes unethical activity. For example, while 96 percent of polled workers agreed that sabotaging another's system was unethical, only 54 percent believed that using the office PC to shop online was wrong.
The respondents were culled from a wide range of professions in such fields as health care, retail, finance, and manufacturing.
Some argue that computer ethics do not exist. The ethical dilemmas are the same as they have always been; they are simply being applied to technological situations. However, computers can exacerbate every ethical situation by an order of magnitude.
Mason (1984) identified four issues of the information age: privacy, access, property and accuracy. Ten years ago, privacy, access, property and accuracy were highly localized. Technology destroys the geographic, temporal and quantity boundaries that used to minimize the impact of information. In a small village, people know where all villagers live. In a cyber society, with tools such as “people finders”, people know where millions of citizens reside. The amount of semi-private information available is staggering. Telecommuting ethics are an evolving code of conduct that dictates employee, managerial and corporate behavior to do ‘right’.


The rate of technological advancement has a significant impact on the way we do business today. The corporation, management and individuals must react to the constant state of change in order to remain competitive.

One important aspect to the management of technological change is coping with the ethics of regulating the use of technology. Policies must be defined by businesses as to how their resources are to be used and the consequences of misuse. Businesses must clearly define what is private and what is public within the organization. It should also inform the employee if they are to be monitored through any of a number of means. This is an area of growing concern in the workplace, especially with the arrival of the Internet and with little precedent.

The Internet poses a particularly interesting problem. The issue main issue is whether or not communication via the Internet should be regulated. This area affects both business as well as home/personal communications. This current hot topic of debate, especially as it concerns the Communications Decency Act of 1996.


Ethical behavior has become even more unclear than before thanks to technology. So said the Ethics Officer Association, based on a recent study it conducted in concert with the American Society of Chartered Life Underwriters (CLU) and Chartered Financial Consultants (ChFC).  (Semas, 1998)

The study found that one out of every six Americans believes traditional ideas of right and wrong have been made obsolete by new technologies. Virtually everyone agreed that certain extreme behaviors are beyond the ethical pale, such as sabotaging an employer's computer systems or data. But other activities drew seriously split opinions. (Semas, 1998)  The following are some statistics from the Study (Semas, 1998):

"Workers are not really sure what is perceived as ethical," said Beverly Brooks, president-elect of the American Society of CLU and ChFC.  In part, that might be because of limited interest in ethical training. In a field as demanding as engineering, for example, formal training in professional ethics is basically an afterthought. Santa Clara University learned that the hard way.  In 1997 their Engineering School announced the launch of its brand-new ethics in engineering course. The class was designed with the idea that engineering, because it's a complex field with the potential to affect so many lives, requires at least a basic understanding of the core ethical concepts of individual rights, social responsibility, virtue, and the common good. But the next year, not one student signed up for the course. What's more, the class attracted a combined total of only 17 students in its previous two quarters. (Semas, 1998)

Not many firms have seemed to develop specific ethical policies that relate to technology. "Almost every large company has a policy on the use of company resources and assets, but very few have made an explicit distinction for new technology," said Edward Petry, executive director of the Ethics Officer Association. (Semas, 1998)  Even when employers do set down policies on Internet use and other technology-tied statements of what's right and what's wrong, such policies often vary from firm to firm, which just adds to the confusion.  Some companies flatly prohibit use of their computers for personal business. Others allow workers to surf the Net on lunch hours and breaks. Still others leave the question up to individual employee judgment. And some actively encourage such use in the belief that it will raise the comfort level of workers with technology and, thus, benefit the company in the long run.


Throughout our report, we will address both ethical issues, and laws that have been passed to address those issues.  It is important here to discuss the relationship between laws and ethics.
Law can be defined as a consistent set of universal rules that are widely published, generally accepted, and usually enforced. These rules describe the ways in which people are required to act in their relationships with others in a society. They are requirements to act in a given way, not just expectations or suggestions to act in that way. Since the government establishes law, the government can use police powers to enforce laws. (Anstead, Susan, “Law Versus Ethics in Management”, 1999)
The word ethics is derived from the Greek word ethos (character), and from the Latin word mores (customs). Together they combine to define how individuals choose to interact with one another. In philosophy, ethics defines what is good for the individual and for society and establishes the nature of duties that people owe themselves and one another. (Anstead, Susan, “Law Versus Ethics in Management”, 1999)
Ethical values and legal principles are usually closely related, but ethical obligations typically exceed legal duties. In some cases, the law mandates ethical conduct. Examples of the application of law or policy to ethics include employment law, federal regulations, and codes of ethics.  (Anstead, Susan, “Law Versus Ethics in Management”, 1999)


Employee Privacy
There is much discussion as of late regarding the appropriateness of a company monitoring an employees internet and e-mail use.  The following are three examples from the past year:
In response to these concerns, H.R. 4908 Notice of Electronic Monitoring Act was presented to the 106th Congress on July 20, 2000 by Charles Canady (R-FL) and Bob Barr (R-Ga) to address the issue of employee privacy.  According to this proposed law:

“Any employee who intentionally, by any electronic means, reads, listens to, or otherwise monitors any wire communication, oral communication, or electronic communication of an employee of the employer, or otherwise monitors the computer usage of an employee of the employer, without having provided the employee notice… shall be liable to the employee for relief…” (“Notice of Electronic Monitoring Act”, 2000)

An exception exists when a particular employee of the employer is engaged in conduct that violates the legal rights of the employer or another person, and involves significant harm to the employer or such other person. (“Notice of Electronic Monitoring Act”, 2000)

If this Act is passed, the potential amount of monetary damages awarded an employee may not exceed $20,000, and the aggregate amount of monetary damages awarded against an employer for a given violation (such as class action suits) may not exceed $500,000   (“Notice of Electronic Monitoring Act”, 2000)

The Notice of Electronic Monitoring Act is currently in the Committee on the Judiciary.

Customer Privacy

With the explosion of electronic commerce in the past two years, many consumers are concerned about what will happen to personal data collected by such companies.Although most companies insist that their customer databases will not be sold, consumers are still wary.

GeoCities, one of the most popular sites on the World Wide Web, agreed to settle Federal Trade Commission charges that it misrepresented the purposes for which it was collecting personal identifying information from children and adults. Under the settlement, GeoCities agreed to post on its site a clear and prominent Privacy Notice, telling consumers what information is being collected and for what purpose, to whom it will be disclosed, and how consumers can access and remove the information. This was the FTC’s first internet privacy case. (“Internet Site Agrees to Settle FTC Charges of Deceptively Collecting Personal Information in Agency's First Internet Privacy Case”, 1998)

Several pieces of legislation address customer concerns, and provide a basis for their protection.Electronic Communications Privacy Act of 1998 amends the Federal criminal code to extend the prohibition against the unauthorized interception of communications to include specific types of electronic communications. Previous laws prohibited only the interception of wire and oral communications. (Public Law 99-508, 10/21/86)

In 1972, the Secretary of the U.S. Department of Health Education and Welfare, then Elliot L. Richardson, appointed an Advisory Committee on Automated Personal Data Systems to explore the impact of computerized record keeping on individuals. In a report published in 1973, the Advisory Committee proposed a Code of Fair Information Practices. (“The Code of Fair Information Practices”, 1973)These practices supplied the intellectual and statutory framework for theU.S. Privacy Act of 1974, the federal law regulating the use of personal information by the government, and served as a model for privacy legislation in this country and worldwide. (“Privacy & Intellectual Property Rights Index”, 2000)

According to the U.S. Privacy Act: (“Privacy Act of 1974”, 1974)

Copyright Violations
In May 1999, the Business Software Alliance (BSA) and the Software & Information Industry Association (SIIA), the two leading trade associations for the software industry, released the results of their study on global software piracy. The organizations estimated that in 1998, revenue losses to the global software industry due to piracy amounted to approximately $11 billion. The United States accounted for approximately $2.9 billion of this total, which was up from the 1997 amount of $2.7 billion. The BSA and SIIA estimate that one in every four applications in the United States is pirated.(“Worldwide Business Software Piracy Losses”, 1999)

Software companies are attempting to control the unauthorized distribution of their products. The following are examples of recent cases:

There are several different methods that companies use to license their software. Individual licenses permit only a single user to use the software. Suite licenses permit only a pre-determined number of users. Concurrent-use licenses limit the number of people who may use the software at any one time. Site licenses generally permit an unlimited number of users at a company to use the software concurrently. This permits companies of different sizes and financial standing to purchase software licenses that are most effective for their situation. (Anstead, Susan, “Financial Implications of Copyright Violations”, 1999)
Further, Title 17 of the United States Code protects a person's right to control the reproduction and distribution of his or her creative works such as books, songs, movies, and computer software. In accordance with this Federal Law, computer software can be either sold or licensed, and these licenses generally contain restrictions on copying or transferring the software. (Anstead, Susan, “Financial Implications of Copyright Violations”, 1999)

Intellectual Property

Intellectual property is defined as a collection of rights created in the law to protect inventions, ideas, trademarks, trade names, written compositions, computer programs, art, music, and sound recordings. (“Intellectual Property Protection in Cyberspace”, 2000) It has always been clear who is the author of a book or a piece of artwork, but technology presents the question of who owns a software program. The following example illustrates this issue:

ABC Company hires Fred, a computer programmer, to develop a new financial system for ABC’s Accounting Department. Even though Fred wrote the program, for ownership and copyright purposes, ABC Company is the author.  The exception is if Fred and ABC Company signed a contract indicating that Fred would own the copyright.
The Copyright Act of 1976 clearly states the ownership requirements of software created while employed for a company. The "author" of a work made for hire is the employer or hiring party for whom the work was prepared. This default ownership rule is known as the work made for hire rule. Unless the parties have agreed otherwise in a signed written document, the employer or hiring party owns the copyright of a work made for hire.

In the case of a work made for hire, the employer or other person for whom the work was prepared is considered the author for purposes of this title, and, unless the parties have expressly agreed otherwise in a written instrument signed by them, owns all of the rights comprised in the copyright.


In the past several years, the gains associated with telecommuting and have been extraordinary. (Murphy, 1996) Productivity can be increased, workers are more satisfied with their jobs, and telecommuting can reduce traffic and pollution problems. (Murphy, 1996)  However, there is also some resistance to telecommuting. Firms are reluctant to adopt telecommuting programs and employees are reluctant to give up traditional work structures. Part of this reluctance can be described in terms of ethics and evolving behavioral norms. New technology is often accompanied by suspicion and skepticism. Telework is posing new questions about rules of conduct, work ethic and work privacy.

Advances in information technology are creating renewed interest in telecommuting. Telecommuting is work done remotely from an employee’s traditional workspace. This can include remote or home offices, airports, hotels or just about any area that is not the main office.

Networks, telephones and faxes, collaborative writing tools, e-mail, voice mail, desktop video conferencing, and the Internet are some tools that enable people to telecommute. As I mentioned, some benefits of telecommuting are higher productivity, job satisfaction and reduction of environmental problems. Some of the disadvantages are loss of communication with a central office; fear of co-worker resentment, and that telecommuting might hinder one's professional development.

As with all technological change, telecommuting is not without controversy. Companies are reluctant to adopt telecommuting programs even though statistical evidence indicates higher productivity, cost savings and other advantages. With concepts such as horizontal organization, a manager today has a massive task in organizing hundreds of individuals into a collaborative team to advance organizational goals. Empowerment and self managed work teams allow burdened managers to cope with increasing demands on their time and responsibility. An underlying key to this development is that of manager-employee trust. The reluctance of some firms to adopt telecommuting programs may be an indication of their inability to change their relationship with their employees. While productivity demands specialists and knowledge work, a strong tradition of management by control is still evident.


Companies dealing in education have also been faced with dealing with new ethical challenges as a result of new technology.  The following ethics statement provides clearly stated values and guidelines through which technologies are responsibly admitted, acquired and used within an educational setting or institution. (Beverly, 1993).

1. Human Value

To make technology, information, and technological tools of service to human process and growth including creative, spiritual, emotional, and thinking processes.

2. Human Responsibility

To negotiate intelligently with technology by taking responsibility for our choices and consequences and by knowing what technology can do, cannot do, and can undo.

3. Internal Human Ecological and Community Concerns

To integrate technology into our institution in such a way as to support positive growth of human educational processes and instruction, and to provide built-in evaluative means that protect internal human ecological aspects of our community that all technology necessarily affects.

4. Confidentiality and Privacy

To respect human rights to privacy, to avoid intrusion and abuse of these rights, and to avoid placing all information on equal levels, access to specific information will not be loosely available.

5. Contribution through History

To contribute to the education of our youth by giving them a sense of coherence, continuity, and interrelatedness in their studies and a sense of purpose and meaning in their lives, history is the central discipline.

6. Technological Admission, Acquisition and Use

To make the admission, acquisition, and use of technology intelligent by understanding what the designed function of the technology is, its content and its context of use, and to make the admission, acquisition and use of technology subject to the binding jurisdiction of this institution’s educational, social, and organizational intents and authority.


As part of a commitment to Corporate Social Responsibility (CSR), many companies have developed business ethics training programs. These programs, which assert company standards and core values, are considered critical, as today's stakeholders demand that corporations – and their employees – follow socially responsible business practices. (Stavraka, 1999)

The complexity of business ethics has made training a time-consuming task. Many programs are broad, geared toward defining values and developing the decision-making skills needed to address a wide spectrum of ethical dilemmas. (Stavraka, 1999) Now, new technologies are helping companies develop programs that advance these workplace principles quickly and effectively.  For example, Lockheed Martin Corporation's Office of Ethics and Business Conduct focuses significant effort on training in a wide variety of formats. Training modes range from the annual live "Ethics Challenge" featuring the popular Dilbert characters to web-based compliance training, testing and tracking tools.

Qwizard is Lockheed Martin's web-based test-and-review tool, providing employees with a comprehensive resource for "qualifying" on required corporate compliance topics. Using Qwizard and its customized review feature, employees can complete training requirements at work, at home, or on the road. Training records are automatically written to the company's compliance tracking system. Qwizard alone is projected to save Lockheed Martin millions of dollars in labor costs, because it enables employees who know their topic to commit significantly less time to training. (Stavraka, 1999)

Moreover, other companies are using technology as a training tool including Nortel Networks. The company's 24-hour "Adviceline" service encourages employees to call in to a dedicated number to ask ethical questions, request information, or seek confidential advice. Employees and customers alike have the opportunity to learn more about Nortel's policies and values. Additionally, Lancaster Laboratories, the Pennsylvania-based research laboratory, has established a similar program, which is an in-house mail and voice-mail system allows its 600 employees to seek advice from the company's Ethics Committee.

Comprehensive ethics and business conduct programs can help companies lessen the potential for serious problems. At Lockheed Martin, for example, an internal, web-based system used by ethics officers tracks allegations and violations, enabling the business to identify and address issues effectively. (Stavraka, 1999)   Showing off their ability in training and tracking is a key success factor in reducing the impact of a potential violation.

A comprehensive ethics and business conduct program is important to mission success, says Amy Karash, executive producer of corporate compliance training for Lockheed Martin. "Customers want to know that we take compliance training seriously and track it effectively," Karash says. "These programs demonstrate our commitment in both of these areas."

In addition to assuring that employees understand and abide by the company's value system, effective ethics and business conduct programs can strengthen company reputation and decrease vulnerability. (Stavraka, 1999)  This is turn should increase employee commitment to the organization as well as customer loyalty. Technological advances will continue to enhance the ethics-training environment, allowing employers to develop business ethics programs that effectively reach their employees.


In this paper, we demonstrate how ethics has been influenced by new and emerging technologies. Companies now realize that new ethics standards have to be incorporated into their code of conduct and training programs. Employees must be aware of what the company considers ethical and unethical.

We have discussed the legalities of ethics, technology gaps, privacy issues, education, and more. It clearly showed how technology has put a new spin on business ethics and discussed how the law, as well as people, view ethics and what they consider to be right and wrong.


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