The Impact of internet technology utilizations on companies in-

ternal work environments: The Social and Ethical Implications

By Janusz WIELKI

Abstract

This paper is an attempt to analyze challenges, threats and potential problems which result from the utilization in contemporary organizations of Internet technologies and tools. Five

basic areas of usage have been analyzed: access to Web resources, electronic mail, instant messaging programs, P2P applications and blogs. The most important types of risk connected

with their usage has been discussed, taking into consideration the social and ethical implica-tions of their usage. Finally conclusions and suggestions are offered.

l. Introduction

Currently it would seem that there is no need to convince anyone of the impact of the devel-opment of the Internet and internet technologies on the functioning of contemporary organiza-

tions, which has been taking place for over a decade. Its influence on almost all aspects of function of contemporary organizations has been something extremely visible and obvious

(see [Porter, 2001]) for many years now and in the case of some industries this impact has even significantly deepened recently (in that regard undoubtedly a very good example is the

music sector – see [Wielki, 2003], [Wielki, 2003a]). On the one hand this impact concerns single organizations and their methods of functioning and competing, while on the other hand

it affects consumers, their attitudes and behavior. Both these issues are mutually interrelated.

Already by the mid 1990s organizations were functioning in a more or less stable business environment, concentrating their efforts on conducting business activities in their own sectors

and facing typical challenges such as: cost reduction and the introduction of new products in the marketplace. It was clearly necessary to contend with changes taking place in the business

environment but they were predictable to a large extent [The Economist, 2000].

The second part of the 1990s saw the end of such relative stability, the main reason being due to the arrival of the Internet into the contemporary economy and the beginning of its utiliza-tion in business. An important element of this process was the emergence, within the space of

a year, of two Web browsers with intuitive user interfaces, allowing both companies (i.e. their employees) and their customers easy access to and use of the multimedial resources of the

Internet. At the same time, built-in Web browsers client e-mail programs gave users the pos-sibility of trouble-free utilization of electronic mail. Additionally, at the end of the 1990s two

other tools, based on the utilization of Internet technologies spread: instant messaging and P2P programs. Recently the importance of blogs (Weblogs) has also grown. Along with Web

browsers and e-mail programs they very quickly became the most often utilized tools based on internet technologies, available to contemporary organizations in the business sphere.

After analyzing the impact of the Internet on the business environment of contemporary or-

ganizations it seems that for a long time only one side of the process was perceived. Namely, the advantages which resulted from the commercial utilization of the Internet. So the most

commonly underlined issues were [ECaTT, 2000], [Margherio et al., 1998], [OECD, 1999], [Porter, 2001]:

• procurement cost reduction,

• inventory reduction level,

• lowering cycle times,

• improvement of customer support/service and the lowering of related costs,

• diminishing sales and marketing expenditures,

• emergence of more effective forms of work.

But there is another side of the process connected with the virtualization of the contemporary economy. Looking at these processes from today’s perspective, with over ten years experi-

ence connected with the commercial utilization of Internet technologies, it can clearly be seen that functioning in the electronic environment is far more complicated and brings many more

challenges than was initially predicted. This is especially so with regards to those previously almost completely unnoticed aspects connected with the internal work environment of or-

ganizations. Thus the basic goal of this paper is to analyze the real impact of the utilization of tools based on internet technologies on the internal work environment of organizations virtu-

alizing their business processes, along with the resulting social and ethical implications.

This paper is composed of three parts. In the first part an overview of the situation connected with the virtualization of the contemporary economy and the consequences of this processes

is briefly provided. The second part forms the core of this paper. It focuses on the internal problems and challenges connected with the utilization of Internet technologies, and those

tools based on it, in the work environment of companies. In all cases attention is concentrated not on the advantages of the mentioned tools utilization, which are quite well known and have

already been discussed in length, but on the social and ethical consequences which have be-come more and more important and highlighted by companies. In the final part of the paper,

the most significant conclusions and suggestions are offered.

2. Problems and challenges connected with the utilization of Internet tech-

nologies in companies internal work environment

In spite of obvious and undisputed benefits related with the utilization by the contemporary

organizations cyberspace in their business activities, it seems that today, in the situation of crystallization of the e-economy, it can be hypothesized that numerous internal challenges,

threats and potential problems connected with the functioning of organizations in an elec-tronic environment have emerged. First of all they result from the common utilization of

Internet technologies, and tools based on it, in the everyday business activities of organiza-tions. It mostly relates to five basic aspects: employee access to WWW resources and Web

browser utilization, utilization by employees electronic mail and instant messaging programs, employee access to the resources of P2P networks and P2P programs utilization and blogs

utilization (see fig. 1). Additionally, to some degree, it is connected with the usage of chat-rooms and IRC (predecessor of IM applications).

Fig. 1. Main areas of the impact of internet technologies on organization’s work environment

e-mail

P2P networks

instant messaging

blogs (Weblogs)W

WW resources

Source: author’s own

2.1 Challenges connected with employees access to WWW resources

Nowadays employees’ access to WWW resources seems to be something that is quite obvious

and natural. Furthermore, the lack of it is perceived as a completely strange situation, prevent-ing workers from functioning effectively. Undoubtedly the possibility of its utilization by

workers resources of the multimedial part of the Internet can bring a company numerous benefits such as: faster searching required business information, easier access to professional

knowledge, more effective competitor monitoring, possibility of cooperation with business partners or on-line procurement of products and services necessary for organization (business-

to-business e-commerce).

But according to the results of various surveys, employees commonly use access to Web re-sources for completely personal purpose and the scope of this phenomenon is not marginal.

Fig. 2. Business and personal use of WWW access at work

64,7

91,2

83,7%89,7% 90,2%

50,7%

60,7% 60,5%

0

10

20

30

40

50

60

70

80

90

100

2000 2001 2002 2003

%

business

use

personal

use

Source: [USC Annenberg School, 2004]

The results of the report of UCLA Center for Communication Policy show that over 91% of

employees with Internet access, use it to visit Web sites related with their work, but at the

same time almost 65 % of them visit Web sites completely unconnected with their profes-

sional duties [USC Annenberg School, 2004].

Simultaneously eMarketer report clearly proves that most of the Web sites visited by Ameri-can at-work Internet users have nothing to do with their business activity (see fig. 3) and 60%

of the money consumers spend on-line is spent in the workplace [eMarketer, 2003].

The scope of potential problems and challenges connected with such utilization of the Web resources, to which employees were not entitled is very broad. Undoubtedly the basic chal-

lenge is the risk of their productivity loss resulted from devoting part of their work time on activities completely unrelated with their business activities. But there are also other, not less

significant ones such as: threats of virus infection connected with downloading various files (music, movies, games etc.), legal risks related to downloading unsavory or copyright mate-

rial, “absorption” of the part of computers’ disk space, consumption of network bandwidth as well as risk of downloading and installation of various types of malware (spyware or ad-

ware) on corporate systems. Threats connected with such programs are significant and com-monly perceived. Operating in the background they can not only send information about the

computer’s user, utilized for advertising purpose, but they can also allow third-part entities to have access to sensitive business information and can be used for business espionage (see

[Mitchell, 2004]. [Dunn, 2005].

Fig. 3. Types of Websites visited by US Internet users at work

57%

45%

44%

43%

42%

39%

33%

33%

31%

27%

26%

24%

0% 10% 20% 30% 40% 50% 60%

News

Retail shopping

Financial serv ices

Computer/sof tware

Special Interests/hobbies

Games

Educational

Trav el related

Food/cooking

Sports

Health/f itness

Job listings

Source: [eMarketer, 2003]

Generally they comprise of four basic groups of threats:

• risk of diminishing employee’s productivity,

• dangers relate to company security,

• legal risks,

• challenges connected with the proper functioning of IT infrastructure.

2.2 Challenges connected with utilization of instant messaging programs

Instant messaging programs (IM) entered very broadly into the organizations’ work environ-

ment. They mainly allow for real-time communication between computer users, but they also provide opportunities of exchanging files, carry on voice conversation or arranging video con-

ferences, generally making communication processes simpler and faster.

Common utilization of such application by employees proves research conducted by Blue Coat Systems in US and UK companies during August 2003. According to this research more than 65% of office workers (UK) and 39% (US) surveyed used IM for personal conversation

during working hours. At the same time only 27% (US) and 11% (UK) of workers used IM for business purposes only (see fig. 4). Results of research conducted by META Group leads

to a similar conclusion. According to their results 57%, of the people surveyed use instant messaging applications at work for personal purposes [Goad, 2004]. It is estimated that by the

end of 2005 the number of people using instant messaging applications at work will reach 350 million by 2005. But although this tool is used in 85% of companies, it is officially supported

in only 10% of them [Murphy, 2004].

Undoubtedly the utilization of instant messaging applications can be a source of benefits con-nected with an employees work. An important aspect is the possibility of their usage for es-

tablishing an informal, internal fast communication network among the organization’s em-ployees. It can be particularly important in situations when a company hasn’t implemented

such kinds of solutions (see [eMarketer, 2002]).

Fig. 4. Utilization of IM applications by the UK and US office workers

65%

11%

39%

27%

0%

10%

20%

30%

40%

50%

60%

70%

80%

usage of IM by office workers for

personal conversation during

working hours

usage of IM by office workers for

business purpose only during

working hours

% surveyed

UK

USA

Source: [Blue Coat, 2003]

The next important aspect is an opportunity to use instant messaging for easy and fast com-munication with people outside an organization and establishing a kind of real-time “knowl-

edge-exchange community” with them.

But there are numerous threats which surpass above the potential benefits of IM usage. The

most significant one seems to be risk of employees productivity loss resulting from conduct-ing, lasting sometimes for many hours, private conversations with friends, causing that it’s

difficult for them to concentrate on other tasks. Results of mentioned earlier research confirm that this problem is a very real one. According to their results nearly 80% of respondents from

UK companies admitted to gossiping via IM [Blue Coat, 2003].

Other serious challenges are security issues connected with uncontrolled usage of instant mes-saging programs. They result from the fact that nearly 80% of communication with IM usage

in the workplace takes place over the public networks (see [King, 2004]) what means that important and often sensitive corporate data is being transmitted through various unknown

and unsafe third-party servers [Murphy, 2004]. Also in case of communication with IM use the whole process takes place outside the companies mail servers, so all incoming messages

(along with attached files) are not controlled by established virus scanning and blocking mechanisms. Quite significant challenge is risk of leaking of confidential information as a

result of informal ad-hoc conversations carried on with people outside of an organization. It’s obvious that all above mentioned activities involving instant messaging programs usage have

an impact consumption of network bandwidth.

2.3. Challenges connected with utilization of P2P by employees

Employees’ access to the resources of P2P (Peer-to-Peer) networks and P2P programs utiliza-tion is nowadays the next common area of Internet technologies usage in organizations. Utili-

zation of application allowing for easy access to their resources spread out with emergence of Napster network in 1999 which provided people with opportunity of downloading MP3 files.

In spite of closing Napster network in 2001, utilization of P2P applications has not finished. In place of it there have emerged numerous new and dynamically developing networks such

as Kaaza, Morpheus or Gnutella, with millions of users around the world, offering free access to music files, software and movies [AssetMetrix, 2003], [Wielki, 2003a].

Results of the research conducted by Blue Coat at the end of 2003 and the beginning of 2004,

prove that utilization of such applications is common among employees. I shows that almost 42% of people use P2P file sharing applications and almost 39% of them conduct file sharing

in the workplace [Blue Coat, 2004].

While in case of instant messaging programs its usage one can perceive some work-related benefits, in case of utilization of P2P applications it’s hard to notice them. They are solely

utilized by employees for their personal purposes and fast broadband networks used by or-ganizations additionally stimulates P2P file sharing programs in the workplace. It is con-

firmed by previously mentioned research. According to it, almost 78% of surveyed confirmed that P2P applications do not add any value to their job [Blue Coat, 2004].

There are numerous challenges which emerge in connection of their utilization. Undoubtedly in case of usage P2P file sharing programs there are four most important groups of threats:

security issues, challenges connected with proper functioning of companies’ IT infrastructure, legal risks and employees’ productivity loss risk. When security issues are considered it is

necessary to mention two basic types of threats: virus risks and risks connected with 3rd party malware (adware, trackware and spyware). In case of usage P2P networks virus risk is really

significant and heighten by the fact that there exists viruses not present elsewhere, targeted especially at file-sharing applications (see [Wielki, 2003a]). At the same time threats con-

nected with malware is extremely high. It is commonly included within the P2P-application

installation and according to the results of the research conducted by AssetMetrix Research Labs, over 98% of P2P file sharing programs include malware [AssetMetrix, 2003].

The usage of P2P applications also pose a significant threat for the proper functioning of cor-

porate IT infrastructures. Because the fact that the size of downloaded files is usually quite big (in the case of movies it can range from 500Mb to 1Gb) their downloading can signifi-

cantly decrease bandwidth available for mission critical applications. According to the Blue Coat report, a few dozen employees using P2P applications for downloading thousands files

can “consume” over 30% of companies network banwidth [Blue Coat, 2004]. One can’t also omit legal risks (risk of company liability for actions of end-users i.e. employees), connected

with downloading and storing on company’s computers copyrighted material (especially mu-sic and films). Examples of actions undertaken by music and movie industries in the U.S.

prove that this kind of risk is quite real. In the case of productivity loss, it mostly relates to the allocation of employees part of work time for files searching which are interesting for

them in P2P networks and downloading them (see [Meta Group, 2004]).

2.4 Challenges connected with utilization of electronic mail in companies work

environment

Electronic mail is undoubtedly (beside access to WWW resources) the most common utiliza-tion of Internet technologies in an organizations’ work environment. In today’s situation it

became an essential element of practically every single organization’s functioning, regardless of the sector it operates or its size. The most important aspect connected with electronic mail

utilization in work environment include: better and faster communication with customers and business partners, easier access to co-workers or improved quality of team work.

Similar to the case of Web access, employees commonly use electronic mail in the workplace

for private purposes. According to the report of USC Annenberg School Center for Digital Future, over 85% of those who utilize the Internet at work use e-mail for business purposes,

but at the same time almost 64% of them accessed their personal e-mail at work (see fig. 5)

Fig. 5. Business and personal e-mail access at work

79,7%85,5% 83,5% 85,9%

52,4%58,1% 57,1%

63,5%

0

20

40

60

80

100

2000 2001 2002 2003

business

personal

Źródło: [USC Annenberg School, 2004] Research conducted by Hitachi Data Systems shows that the amount of non-work related e-mail correspondence poses serious problem in some countries. In the case of South Africa 74% of companies one in five e-mails sent in the workplace are non-work related. Similar

situations are in the case of Israeli or Dutch companies [Hitachi Data Systems, 2003]. The most popular ways of private e-mail use in the workplace are shown in fig. 6. Fig. 6. The most common ways of private utilization of e-mail at work

39%

26%

15%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Sending jokes or

chain e-mails at some

point

Discussing personal

life

Gossiping about work

% of surveyed

Source: [Fallows, 2003] The most common way of its personal usage is sending other people (inside or outside an or-ganization) various jokes or chain e-mails received from others. They are very often not only text messages but they also include attachments such as pictures, shorts movies or Power Point presentations. Also discussing and gossiping personal life or work issues are quite common ways of using e-mail by employees in the workplace. This kind of behavior is a source of numerous challenges. The most important one is productivity loss which result from devoting part of work time on reading and answering personal e-mails. Additionally com-monly received and forwarded e-mails containing jokes, pictures or multimedia presentations are the sources of few kinds of challenges. On the one hand they contribute to an increasing amount of spam circulating in cyberspace, which rapid growth in recent years has become a serious problem, diminishing people’s confidence in e-mail as a business tool. On the other hand such workers behavior affects bandwidth of Internet connection, although undoubtedly not in such a significant way as in the case of P2P applications. How serious a problem this can pose is proved by the case of Lockheed Martin. In this company the e-mail system crashed for six hours after its employees sent 60,000 co-workers an e-mail concerning a na-tional prayer day, additionally requesting confirmation of its receipt. The cost of it was hun-dreds of thousands of dollars [Naughton, 1999]. Additionally earlier mentioned attachments, commonly accompanying personal correspondence, pose a serious threat to an organization’s security and it relates to such issues as virus or malware risks. Another increasingly serious issue is the problem of the impact of common utilization of elec-tronic mail on the structure of the daily budget of employees’ working time. It is connected with a fact that the usage of this tool in everyday work forces them, more and more often, to spending increasing part of their workday on reading and answering e-mails. According to research conducted by the American Management Association an average respondent spends almost everyday two hours (about 25% of workday) on e-mail, while in the case of many workers this time is much longer (see fig. 7). Fig. 7. Amount of time spent on a typical workday on e-mail

9,9%

18,5%

24,4%

47,3%

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

less than 1 hour 1-2 hours 2-4 hours more than 4 hours

Source: [Amecian Management Association, 2004] Research conducted by the Pew Internet & American Life Project indicates that in extreme situation this issue can pose a serious challenge. According to their results in the group of “power e-mailers”, which make up about a fifth of employees using the Internet, 68% of the people surveyed spend over 2 hours of a workday on handling e-mails, including 16% who spend more than 4 hours on such activities [Fallows, 2003]. So in the result of extreme situa-tions the utilization of electronic mail as a business tool can lead to opposite effects as ex-pected i.e. loss of productivity through message overload and increased amounts of issues not handled on time. Such a problem was perceived by telephone retailer Phones 4u, which banned its own employees sending internal e-mails. They estimate that its would save each worker every day at least three hours of work time and $1.6 million each month [Reuters, 2003]. At the same time research recently conducted in the UK, on behalf of Hewlett Packard, shows that there is at least one more challenge connected with common utilization of e-mails in an organizations work environment. The phenomenon is called an “Info-Mania” and it relates to the usage by workers of technologies allowing them the continuous access to various types of messages (“always-on” technology). According to the results of this research, employees tools based on such technologies tend to constantly check if they received new messages and

respond to it. It affects their mental sharpness, lowering their productivity. In this context the most dangerous aspect turned out to be an electronic mail. The results of the research showed

that the “Info-Mania” phenomenon can lead to the loss of employees’ IQ by 10 points [Wainwright, 2005].

There is also one more kind of threat connected with growing e-mail utilization in an organi-

zations work environment. This is a risk of accidental disclose by employees various sensitive information in outbound e-mail correspondence. Such situations can cost company amounts in

revenues, legal penalties, and organizational credibility. Although this risk is commonly overlooked numerous cases prove that it is a serious problem (see [Clearswift, 2005]).

2.5 Challenges related to utilization of blogs by employees

Blog (Weblog) is a tool which recently has been rapidly becoming one of the basic instru-

ments based on Internet technology. It is estimated that at the end of April 2005 the number of blogs reached almost 9 million and 40,000 new ones emerge every day [Baker, 2005]. Their

popularity quickly grows not only among Internet users writing own diaries on various inter-esting issues (see [Rainie, 2005]. Simultaneously they become an important business tool util-

ized by various organizations [Baker, 2005]. They are used by such companies as IBM, Gen-

eral Motors and Microsoft. In this latter one there are over 1000 corporation blogs (see

[Rosencrance, 2004). They are utilized for stimulating internal cooperation and knowledge exchange among employees but also in communicating with customers and the business envi-

ronment [Li, 2004]. But also in case of this tool usage there are quite serious challenges and the most important one is uncontrolled leaking of internal information. On the one hand it can

be disclosing, in corporation blogs, information important for competitors such as shifts in the organization’s strategy or undertaking works on certain projects. On the other hand a signifi-

cant challenge can pose various type of private employees blogs, often containing comments concerning internal organization’s issues and its functioning (see [Perez, 2005]). They pose a

significant challenge because of the fact that “blog posts linger on the Web forever” [Baker, 2005] and that the most popular ones attract even dozens of thousands of people. Such a situa-

tion took place in the case of a fired Google employee whose blog, devoted to his work ex-perience, in one day was read by 60,000 visitors. A potential challenge connected with blogs

is also a risk of productivity loss resulting from employees devoting part of their work day on reading and writing blogs not connected with professional issues. An additional threat related

with blogs is their increased exploitation for distribution of malware (see [Websense, 2005]).

3 Conclusions

There are many issues concerning the functioning of an organization, in the situation of dy-

namic development of the e-economy, which require deep analysis and rethinking. As we still have to deal with very early phase of crystallization of the new form of contemporary econ-

omy, there are numerous and unpredictable aspects which unceasingly emerge almost every day posing organizations numerous new challenges. In this context undoubtedly an extremely

important issue for organizations connected with utilizations by their employees in an elec-tronic environment in which more and more often they have to work. As numerous researches

show functioning in this new environment and the utilization by them in everyday work, tools based on Internet technologies has been not only a source of many benefits but it also causes

the emergence of numerous very real problems and challenges. Although the intensity of its impact on the work environment of contemporary organization is various it is already quite

clear that this influence must be carefully observed and analyzed, taking into account not only benefits but also challenges,. These challenges are not only of pure a technical nature, con-

nected with the proper functioning of the organization and its security in the situation of in-creasing virtualization of its business activities. They also include numerous and difficult so-

cial and ethical implications which emerge with more and more common utilization of cyber-space in an organizations functioning.

The range of necessary shifts is so significant that it becomes necessary to rethink and rede-

fine ways and rules which are the base of organization of functioning. This situation necessi-tates the introduction of comprehensive solutions including both organizational and technical

issues, leading to defining the confines of employees’ functioning in electronic environment. So more and more companies becomes aware of this fact undertaking various types of action.

According to the study conducted by American Management Association together with The ePolicy Institute, 76% of surveyed organizations monitor employees’ Website connections

and 55% of them review their e-mails. Simultaneously organizations more and more often establish their own policies concerning the usage of tools based on Internet technology utili-

zation. According to the previous mentioned research 84% companies have such a policy re-lating to personal e-mail usage, 81% of them concerning personal Internet usage, 42% firm

have regulated personal usage of instant messengers and 23% have a policy concerning post-ings on corporate blogs [American Management Association, 2005].

Generally various approaches to this problem are possible, from very restrictive ones to more liberal (see [American Management Association, 2005], [Naughton, 1999], [Reuters, 2003]),

but nowadays it’s obvious that issues related with workers functioning in cyberspace can not be left to itself. Such attitudes can lead to a situation in which benefits following from utiliza-

tion of the Internet and internet technologies by organizations will be vary questionable. Si-multaneously because of big and dynamic changes taking place in cyberspace, its monitoring

and flexible adjusting organization as well as solutions functioning in it seems to be essential.

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