James A. O'Brien, and George Marakas Management Information Systems, 9th ed. 

Boston, MA: McGraw-Hill, Inc., 2009  ISBN: 13 9780073376769

Chapter 13 Security and Ethical Challenges

McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All rights

reserved.

1. Identify several ethical issues in how the use of information technologies in business affects: employment, individuality, working conditions, privacy, crime, health, and solutions to societal problems

2. Identify several types of security management strategies and defenses, and explain how they can be used to ensure the security of business applications of information technology

3. Propose several ways that business managers and professionals can help to lessen the harmful effects and increase the beneficial effects of the use of information technology

Learning Objectives

13-2

Case 1: Ethics, Moral Dilemmas, and Tough Decisions

• The pervasive use of IT in organizations and society present individuals with new ethical challenges and dilemmas.

• If companies don’t set ethical policies and guidelines, or don’t make sure that employees know what they are and understand them, companies cannot hold workers accountable for their unethical behavior.

13-3

Case Study Questions1. Companies are developing ethical policies and guidelines for

legal reasons, but also to clarify what is acceptable and what is not. Do you think any of the issues raised in the case required clarification? Would you take exception to any of them being classified as inappropriate behavior? Why do you think these things happen anyway?

2. In the first example (Bryan’s), it is apparent that he did not believe justice had been ultimately served by the decision his company made. Should he have taken the issue to the authorities? Or, was it enough that he reported the problem through the proper channels and let the organization handle it, as was the recommendation of Linn Hynds? Provide a rationale for the position you are willing to take on this matter.

13-4

Case Study Questions

3. In the case, Gary chose not to stop his boss from installing unlicensed software, although he refused to do it himself. If installing unlicensed software is wrong, is there any difference between refusing to do it versus not stopping somebody else? Do you buy his argument that it was not really going to hurt anybody? Why or why not?

13-5

IT Security, Ethics, and Society

13-6

IT Security, Ethics, and Society

• Information technology has both beneficial and detrimental effects on society and people– Manage work activities to minimize the

detrimental effects of information technology

– Optimize the beneficial effects

13-7

Business Ethics

• Ethics questions that managers confront as part of their daily business decision making include– Equity

– Rights

– Honesty

– Exercise of corporate power

13-8

Categories of Ethical Business Issues

13-9

Corporate Social Responsibility Theories• Stockholder Theory

– Managers are agents of the stockholders– Their only ethical responsibility is to increase

the profits of the business without violating the law or engaging in fraudulent practices

• Social Contract Theory– Companies have ethical responsibilities to all members

of society, who allow corporations to exist• Stakeholder Theory

– Managers have an ethical responsibility to manage a firm for the benefit of all its stakeholders

– Stakeholders are all individuals and groups that have a stake in, or claim on, a company

13-10

Principles of Technology Ethics• Proportionality - The good achieved by the technology must

outweigh the harm or risk; there must be no alternative that achieves the same or comparable benefits with less harm or risk

• Informed Consent - Those affected by the technology should understand and accept the risks

• Justice– The benefits and burdens of the technology should be

distributed fairly– Those who benefit should bear their fair share of the risks,

and those who do not benefit should not suffer a significant increase in risk

• Minimized Risk - Even if judged acceptable by the other three guidelines, the technology must be implemented so as to avoid all unnecessary risk 13-11

AITP Standards of Professional Conduct

13-12

Responsible Professional Guidelines• A responsible professional

– Acts with integrity

– Increases personal competence

– Sets high standards of personal performance

– Accepts responsibility for his/her work

– Advances the health, privacy, and general welfare of the public

13-13

Computer Crime• Computer crime includes

– Unauthorized use, access, modification, or destruction of hardware, software, data, or network resources

– The unauthorized release of information– The unauthorized copying of software– Denying an end user access to his/her own

hardware, software, data, or network resources

– Using or conspiring to use computer or network resources illegally to obtain information or tangible property

13-14

Hacking• Hacking is

– The obsessive use of computers– The unauthorized access and use of networked

computer systems• Electronic Breaking and Entering

– Hacking into a computer system and reading files, but neither stealing nor damaging anything

• Cracker– A malicious or criminal hacker who maintains

knowledge of the vulnerabilities found for private advantage

13-15

Common Hacking Tactics• Denial of Service

– Hammering a website’s equipment with too many requests for information

– Clogging the system, slowing performance, or crashing the site

• Scans– Widespread probes of the Internet to determine types of

computers, services, and connections– Looking for weaknesses

• Sniffer– Programs that search individual packets of data as they

pass through the Internet– Capturing passwords or entire contents

13-16

Common Hacking Tactics• Spoofing - Faking an e-mail address or Web page to trick

users into passing along critical information like passwords or credit card numbers

• Trojan House - A program that, unknown to the user, contains instructions that exploit a known vulnerability in some software

• Back Doors - A hidden point of entry to be used in case the original entry point is detected or blocked

• Malicious Applets - Tiny Java programs that misuse your computer’s resources, modify files on the hard disk, send fake email, or steal passwords

13-17

Common Hacking Tactics• War Dialing - Programs that automatically dial thousands of

telephone numbers in search of a way in through a modem connection

• Logic Bombs - An instruction in a computer program that triggers a malicious act

• Buffer Overflow - Crashing or gaining control of a computer by sending too much data to buffer memory

• Password Crackers - Software that can guess passwords• Social Engineering - Gaining access to computer systems

by talking unsuspecting company employees out of valuable information, such as passwords

• Dumpster Diving - Sifting through a company’s garbage to find information to help break into their computers

13-18

Cyber Theft• Many computer crimes involve the theft of

money• The majority are “inside jobs” that involve

unauthorized network entry and alternation of computer databases to cover the tracks of the employees involved

• Many attacks occur through the Internet• Most companies don’t reveal that they have

been targets or victims of cybercrime

13-19

Unauthorized Use at Work• Unauthorized use of computer systems

and networks is time and resource theft– Doing private consulting– Doing personal finances– Playing video games– Unauthorized use of the Internet or company

networks• Sniffers

– Used to monitor network traffic or capacity– Find evidence of improper use

13-20

Internet Abuses in the Workplace– General email abuses– Unauthorized usage and access– Copyright infringement/plagiarism– Newsgroup postings– Transmission of confidential data– Pornography– Hacking– Non-work-related download/upload– Leisure use of the Internet– Use of external ISPs– Moonlighting

13-21

Software Piracy• Software Piracy

– Unauthorized copying of computer programs

• Licensing– Purchasing software is really a payment

for a license for fair use

– Site license allows a certain number of copies

A third of the software industry’s revenues are lost to piracyA third of the software industry’s revenues are lost to piracy

13-22

Theft of Intellectual Property• Intellectual Property

– Copyrighted material– Includes such things as music, videos, images,

articles, books, and software

• Copyright Infringement is Illegal– Peer-to-peer networking techniques have made

it easy to trade pirated intellectual property

• Publishers Offer Inexpensive Online Music– Illegal downloading of music and video is

down and continues to drop

13-23

Viruses and Worms• A virus is a program that cannot work without

being inserted into another program– A worm can run unaided

• These programs copy annoying or destructive routines into networked computers– Copy routines spread the virus

• Commonly transmitted through– The Internet and online services– Email and file attachments– Disks from contaminated computers– Shareware

13-24

Top Five Virus Families of all Time• My Doom, 2004

– Spread via email and over Kazaa file-sharing network– Installs a back door on infected computers– Infected email poses as returned message or one

that can’t be opened correctly, urging recipient to click on attachment

– Opens up TCP ports that stay open even after termination of the worm

– Upon execution, a copy of Notepad is opened, filled with nonsense characters

13-25

Top Five Virus Families of all Time• Netsky, 2004

– Mass-mailing worm that spreads by emailing itself to all email addresses found on infected computers

– Tries to spread via peer-to-peer file sharing by copying itself into the shared folder

– It renames itself to pose as one of 26 other common files along the way

13-26

Top Five Virus Families of all Time• SoBig, 2004

– Mass-mailing email worm that arrives asan attachment• Examples: Movie_0074.mpg.pif, Document003.pif

– Scans all .WAB, .WBX, .HTML, .EML, and .TXT files looking for email addresses to which it can send itself

– Also attempts to download updates for itself

13-27

Top Five Virus Families of all Time• Klez, 2002

– A mass-mailing email worm that arrives with a randomly named attachment

– Exploits a known vulnerability in MS Outlook to auto-execute on unpatched clients

– Tries to disable virus scanners and then copy itself to all local and networked drives with a random file name

– Deletes all files on the infected machine and any mapped network drives on the 13th of all even-numbered months

13-28

Top Five Virus Families of all Time• Sasser, 2004

– Exploits a Microsoft vulnerability to spread from computer to computer with no user intervention

– Spawns multiple threads that scan local subnets for vulnerabilities

13-29

The Cost of Viruses, Trojans, Worms• Cost of the top five virus families

– Nearly 115 million computers in 200 countries were infected in 2004

– Up to 11 million computers are believed to be permanently infected

– In 2004, total economic damage from virus proliferation was $166 to $202 billion

– Average damage per computer is between $277 and $366

13-30

Adware and Spyware• Adware

– Software that purports to serve a useful purpose, and often does

– Allows advertisers to display pop-up and banner ads without the consent of the computer users

• Spyware– Adware that uses an Internet connection in the

background, without the user’s permission or knowledge

– Captures information about the user and sends it over the Internet

13-31

Spyware Problems• Spyware can steal private information and

also– Add advertising links to Web pages– Redirect affiliate payments– Change a users home page and search settings– Make a modem randomly call premium-rate

phone numbers– Leave security holes that let Trojans in– Degrade system performance

• Removal programs are often not completely successful in eliminating spyware

13-32

Privacy Issues• The power of information technology to

store and retrieve information can have a negative effect on every individual’s right to privacy– Personal information is collected with every

visit to a Web site

– Confidential information stored by credit bureaus, credit card companies, and the government has been stolen or misused

13-33

Opt-in Versus Opt-out• Opt-In

– You explicitly consent to allow data to be compiled about you

– This is the default in Europe

• Opt-Out– Data can be compiled about you unless you

specifically request it not be– This is the default in the U.S.

13-34

Privacy Issues• Violation of Privacy

– Accessing individuals’ private email conversations and computer records

– Collecting and sharing information about individuals gained from their visits to Internet websites

• Computer Monitoring– Always knowing where a person is Mobile and paging

services are becoming more closely associated with people than with places

• Computer Matching– Using customer information gained from many sources to

market additional business services• Unauthorized Access of Personal Files

– Collecting telephone numbers, email addresses, credit card numbers, and other information to build customer profiles

13-35

Protecting Your Privacy on the Internet

• There are multiple ways to protect your privacy– Encrypt e-mail

– Send newsgroup postings through anonymous remailers

– Ask your ISP not to sell your name and information to mailing list providers and other marketers

– Don’t reveal personal data and interests on online service and website user profiles

13-36

Privacy Laws• Electronic Communications Privacy Act

and Computer Fraud and Abuse Act– Prohibit intercepting data communications

messages, stealing or destroying data, or trespassing in federal-related computer systems

• U.S. Computer Matching and Privacy Act– Regulates the matching of data held in

federal agency files to verify eligibility for federal programs

13-37

Privacy Laws (cont’d)• Other laws impacting privacy and how

much a company spends on compliance– Sarbanes-Oxley– Health Insurance Portability and

Accountability Act (HIPAA)– Gramm-Leach-Bliley– USA Patriot Act– California Security Breach Law– Securities and Exchange Commission rule

17a-4

13-38

Computer Libel and Censorship• The opposite side of the privacy debate…

– Freedom of information, speech, and press• Biggest battlegrounds

– Bulletin boards– Email boxes– Online files of Internet and public networks

• Weapons used in this battle– Spamming– Flame mail– Libel laws– Censorship

13-39

Computer Libel and Censorship• Spamming

– Indiscriminate sending of unsolicited email messages to many Internet users

• Flaming– Sending extremely critical, derogatory, and

often vulgar email messages or newsgroup posting to other users on the Internet or online services

– Especially prevalent on special-interest newsgroups

13-40

Cyberlaw• Laws intended to regulate activities over the Internet

or via electronic communication devices– Encompasses a wide variety of legal and political issues– Includes intellectual property, privacy, freedom of expression,

and jurisdiction• The intersection of technology and the law

is controversial– Some feel the Internet should not be regulated– Encryption and cryptography make traditional form of

regulation difficult– The Internet treats censorship as damage and simply routes

around it• Cyberlaw only began to emerge in 1996

– Debate continues regarding the applicability of legal principles derived from issues that had nothing to do with cyberspace

13-41

Other Challenges• Employment

– IT creates new jobs and increases productivity– It can also cause significant reductions in job

opportunities, as well as requiring new job skills• Computer Monitoring

– Using computers to monitor the productivity and behavior of employees as they work

– Criticized as unethical because it monitors individuals, not just work, and is done constantly

– Criticized as invasion of privacy because many employees do not know they are being monitored

13-42

Other Challenges• Working Conditions

– IT has eliminated monotonous or obnoxious tasks– However, some skilled craftsperson jobs have

been replaced by jobs requiring routine, repetitive tasks or standby roles

• Individuality• Dehumanizes and depersonalizes activities

because computers eliminate human relationships– Inflexible systems

13-43

Health Issues

• Cumulative Trauma Disorders (CTDs)– Disorders suffered by people who sit at a

PC or terminal and do fast-paced repetitive keystroke jobs

• Carpal Tunnel Syndrome– Painful, crippling ailment of the hand and

wrist

– Typically requires surgery to cure

13-44

Ergonomics

• Designing healthy work environments– Safe, comfortable, and pleasant for people to

work in

– Increases employee morale and productivity

– Also called human factors engineering

13-45

Ergonomics Factors

13-46

Societal Solutions

• Using information technologies to solve human and social problems– Medical diagnosis

– Computer-assisted instruction

– Governmental program planning

– Environmental quality control

– Law enforcement

– Job placement

13-47

Societal Solutions

• The detrimental effects of information technology– Often caused by individuals

or organizations not accepting ethical responsibility for their actions

13-48

Security Management of IT

• The Internet was developed for inter-operability, not impenetrability– Business managers and professionals alike

are responsible for the security, quality, and performance of business information systems

– Hardware, software, networks, and data resources must be protected by a variety of security measures

13-49

Case 2: Raymond James Financial, BCD Travel, Houston Texans, and Others• For companies like Raymond James, leakage of

sensitive customer data or proprietary information is a new priority.

• Companies are starting to focus on keeping sensitive information within their boundaries.

• Companies are deploying Outbound content management tools to monitor outgoing information.

• Companies not only have to monitor e-mail messages, but also the explosion of alternative communication mechanisms that employees are using, including instant messaging, blogs, FTP transfers, Web mail, and message boards.

13-50

Case Study Questions1. Barring illegal activities, why do you think that employees in

the organizations featured in the case do not realize themselves the dangers of loosely managing proprietary and sensitive information? Would you have thought of these issues?

2. How should organizations strike the right balance between monitoring and invading their employees’ privacy, even if it would be legal for them to do so? Why is it important that companies achieve this balance? What would be the consequences of being too biased to one side?

3. The IT executives in the case all note that outbound monitoring and management technologies are only part of an overall strategy, and not their primary defense. What should be the other components of this strategy? Which weight would you give to human and technological factors? Why?

13-51

Security Management

• The goal of securitymanagement is the accuracy, integrity, and safety of allinformation system processes and resources

13-52

Internetworked Security Defenses

• Encryption– Data is transmitted in scrambled form

– It is unscrambled by computer systems for authorized users only

– The most widely used method uses a pair of public and private keys unique to each individual

13-53

Public/Private Key Encryption

13-54

Internetworked Security Defenses• Firewalls

– A gatekeeper system that protects a company’s intranets and other computer networks from intrusion

– Provides a filter and safe transfer point for access to/from the Internet and other networks

– Important for individuals who connect to the Internet with DSL or cable modems

– Can deter hacking, but cannot prevent it

13-55

Internet and Intranet Firewalls

13-56

Denial of Service Attacks

• Denial of service attacks depend on three layers of networked computer systems– The victim’s website– The victim’s Internet service provider– Zombie or slave computers that have been

commandeered by the cybercriminals

13-57

Defending Against Denial of Service

• At Zombie Machines– Set and enforce security policies– Scan for vulnerabilities

• At the ISP– Monitor and block traffic spikes

• At the Victim’s Website– Create backup servers and network

connections

13-58

Internetworked Security Defenses• Email Monitoring

– Use of content monitoring software that scans for troublesome words that might compromise corporate security

• Virus Defenses– Centralize the updating and distribution of

antivirus software– Use a security suite that integrates virus

protection with firewalls, Web security, and content blocking features

13-59

Other Security Measures• Security Codes

– Multilevel password system– Encrypted passwords– Smart cards with microprocessors

• Backup Files– Duplicate files of data or programs

• Security Monitors– Monitor the use of computers and networks– Protects them from unauthorized use, fraud,

and destruction

13-60

Other Security Measures• Biometrics

– Computer devices measure physical traits that make each individual unique• Voice recognition, fingerprints, retina scan

• Computer Failure Controls– Prevents computer failures or minimizes

its effects– Preventive maintenance– Arrange backups with a disaster recovery

organization

13-61

Other Security Measures

• In the event of a system failure, fault-tolerant systems have redundant processors, peripherals, and software that provide– Fail-over capability: shifts to back up

components

– Fail-save capability: the system continues to operate at the same level

– Fail-soft capability: the system continues to operate at a reduced but acceptable level

13-62

Other Security Measures• A disaster recovery plan contains

formalized procedures to follow in the event of a disaster– Which employees will participate– What their duties will be– What hardware, software, and facilities

will be used– Priority of applications that will be processed– Use of alternative facilities– Offsite storage of databases

13-63

Information System Controls• Methods and devices that attempt to ensure the

accuracy, validity, and propriety of information system activities

13-64

Auditing IT Security• IT Security Audits

– Performed by internal or external auditors

– Review and evaluation of security measures and management policies

– Goal is to ensure that that proper and adequate measures and policies are in place

13-65

Protecting Yourself from Cybercrime

13-66

Case 3: Cyberscams and Cybercriminals

• Cyberscams are today’s fastest-growing criminal niche– 87 percent of companies surveyed reported

a security incident

– The U.S. Federal Trade Commission says identity theft is its top complaint

– eBay has 60 people combating fraud; Microsoft has 65

– Stolen credit card account numbers are regularly sold online

13-67

Case Study Questions1. List several reasons “cyber scams are today’s fastest

growing criminal niche.” Explain why the reasons you give contribute to the growth of cyber scams.

2. What are several security measures that could be implemented to combat the spread of cyber scams? Explain why your suggestions would be effective.

3. Which of the four top cyber criminals described in this case poses the biggest threat to businesses? To consumers? Explain the reasons for your choices, and describe how businesses and consumers can protect themselves from these cyber scammers.

13-68

Case 4: Lowe’s, TCI, Bank of America, ChoicePoint, and Others• Security Breach Headlines

– Identity thieves stole information on 145,000 people from ChoicePoint

– Bank of America lost backup tapes that held data on over 1 million credit card holders

– DSW had its stores’ credit card data breached; over 1 million had been accessed

• Corporate America is finally owning up to a long-held secret– It can’t safeguard its most valuable data

13-69

Case Study Questions1. Why have there been so many recent incidents

of data security breaches and loss of customer data by reputable companies?

2. What security safeguards must companies have to deter electronic break-ins into their computer networks, business applications, and data resources like the incident at Lowe’s?

3. What security safeguards would have deterred the loss of customer data at TCI, Bank of America, and ChoicePoint? Defend your proposed security measures to avoid the incidents that occurred at each company.

13-70