The Road to a Responsible and Sustainable e-Business

Norberto Patrignani and Marco De Marco

Catholic University of Milano, Largo Gemelli 1, 20123 Milano, Italy

Keywords: Corporate Social Responsibility, Business Ethics, Computer Ethics, Information Systems, Big Data.

Abstract: This paper introduces a definition of a responsible and sustainable e-business organization. Today every

company has to take into account the growing role of the stakeholders (employees, suppliers, customers,

and general society) and this has increased the importance of the Corporate Social Responsibility (CSR).

Also, they have to expose the impact of their operations on the environment in terms of supply-chain, power

consumption and waste management. Both these dimensions are becoming important also for organizations

that concentrate their activities on electronic channels. For them, information systems and communication

channels (ICT) represent the fundamental infrastructure. This paper concentrates on the questions: how to

harmonize the CSR strategy with the important decisions that has to be taken in the computing areas? How

to keep aligned the Business Ethics with the Computer Ethics strategies?

1 WHAT IS AN ETHICAL AND

SUSTAINABLE

ORGANIZATION?

One of the missions of corporations is to do the

interest of shareholders but in doing this they

interact with other actors: employees, customers,

suppliers, society in general and people different

from shareholders. They are called "stakeholders",

that is, all the entities that have some relationship

with the enterprise.

1.1 1919, Michigan, Dodge Vs Ford

Probably one of the most famous milestones in the

history of business management is the Dodge v.

Ford Motor Co. case. By 1916, the Ford Motor Co.

accumulated a capital surplus of $60 million. The

company's President, H.Ford, decided to stop

dividends for shareholders in favour of massive

investments in new plants that would enable to

improve the production, and the numbers of

employees, while continuing to cut the costs and

prices of his cars. In defence of this strategy, he

declared: "My ambition is to … spread the benefits

of this industrial system to the greatest possible

number ... To do this we are putting the greatest

share of our profits back in the business." While

Ford may have believed that such a strategy might

be in the long-term benefit of the company, the

minority shareholders objected to this strategy,

demanding Ford to continue to pay out dividends to

them instead of his proposed investments. Two

brothers, J.F.Dodge and H.E.Dodge, owned 10% of

the Company, the largest shareholders after Ford. In

1919 the Michigan Supreme Court was called upon

to decide whether the minority shareholders could

prevent Ford from pursuing his long-term strategy.

The Court held that a business corporation is

organized primarily for the profit of the

shareholders, as opposed to the community or its

employees. (Henderson, 2007)

1.2 Shareholders Vs Stakeholders

This (short-term) view of the role of business, also

known as the "shareholders view", was reinforced

up to the famous "Chicago School" article "The

Social Responsibility of Business Is to Increase Its

Profits" (Friedman, 1970). This traditional

"shareholders view" is nowadays facing enormous

challenges: defence of "commons" by local/national

communities, fair-trade organizations, financial

disasters, and limits of the planet. The need for

transparency and new relationships with all

stakeholders are pushing organizations to develop,

beyond the legal constraints, also a social and an

environmental balance. A new "stakeholders view"

is becoming mandatory (Freeman, 1984). In this

longer-term view fundamental questions arise for

corporations like: "Morally, how or in whose

345

Patrignani N. and De Marco M..

The Road to a Responsible and Sustainable e-Business.

DOI: 10.5220/0004035003450348

In Proceedings of the International Conference on Data Communication Networking, e-Business and Optical Communication Systems (ICE-B-2012),

pages 345-348

ISBN: 978-989-8565-23-5

 2012 SCITEPRESS (Science and Technology Publications, Lda.)

interests ought the corporation to be managed?".

There is a growing need for an active compliance

not just with laws and international standards, but

also with "ethical standards". CSR proponents argue

that corporations make more long-term profits by

operating with a perspective: a sustainable

organization (Freeman, 1984). This is the core of the

"stakeholder theory" and of business ethics (an

applied ethics that examines ethical problems in a

business environment). They articulates the view

that a business firm ought to be managed in a way

that achieves a balance among the interests of all

stakeholders. The economic crisis has revived the

old debate about whether firms should focus most on

their shareholders or on their stakeholders. Even

J.Welch, the famous General Electric's CEO,

formerly a stronger supporter of shareholders theory,

has recently expressed doubts discussing about the

financial crisis: "...On the face of it, shareholder

value is the dumbest idea in the world". (The

Economist, 2010)

1.3 Can It Pay to Be Ethical?

According to Ethisphere Institute, being ethical has

also some economic rewards: looking at the

performances of the companies and organizations

defined as WME (World's Most Ethical companies)

compared with the generic Standard & Poors 500, it

is evident that WME are performing 20-40% better

(Ethisphere, 2012). Despite the current economic

outlook, environmental sustainability is at the top of

the agenda of many organizations. According to a

recent study from MIT Sloan Management School,

"sustainability now occupies a central and

permanent place in corporate boardrooms". It

describes that 66% of managers see it as necessary

to being competitive in today global marketplace,

and that for 31% of them it is contributing to their

profits (MIT-SMR, 2012). There are international

standards for CSR like the ISO 26000 and the

United Nations Global Compact (UNGC, that

defines principles in the areas of Human Rights,

Labour, Environment and Anti-Corruption).

2 HOW ICT COULD

CONTRIBUTE TO AN

ETHICAL AND SUSTAINABLE

E-BUSINESS?

There are at least "five moral dimensions of the

information age": a) information rights and

obligations (e.g. privacy); b) property rights and

obligations; c) accountability and control; d) system

quality; and e) quality of life (Laudon and Laudon,

2007). If we focus on the area of privacy we can see

that an organization based on e-business has the

power of collecting immense amount of data. This

"Big Data" enables to work for identifying new

opportunities and trends but, on the other side, it can

also scaring off customers. The so called NORA

(Non Obvious Relationship Awareness) technology

enables deep data analysis by collecting information

about people from different sources and find "non

obvious relationships" ("mosaic" effect). A recent

example of Big Data application to elections is the

"Narwhal Project", a gigantic data-analysis project

used for the 2012 US President elections (Issenberg,

2012). In this area an e-business aiming at a

consistent ethical and sustainable CSR strategy have

to manage this kind of technologies very carefully

and to provide transparent evidence of a minimalist

(and legal) use of customers' data.

2.1 The Role of Computer Ethics

ICT are the new critical infrastructure of our society

and in particular for e-business. If organizations

want to consistently develop their CSR strategy,

they need to align them with the ICT strategy, they

need to "bridge" business ethics and computer

ethics. Probably the first example of reflexivity in

ICT is due to a MIT professor, N.Wiener, in 1948.

He was the first at identifying the connections

between Ethics and ICT, and the social and ethical

impacts of computers in the society (Wiener, 1948).

He introduced the fundamental concepts of the

discipline that today we call "Computer Ethics".

After him, D.Parker, a computer scientist working at

Stanford Research Institute, wrote: "It seemed, that

when people entered the computer centre they left

their ethics at the door." (Parker, 1968). He

contributed on the elaboration of the first Code of

Ethics of Professional Conducts of ACM

(Association for Computing Machinery), a basic

reference worldwide, a good example of code that

could be adopted by an ethical and sustainable e-

business. In 1985 D.Johnson published his

fundamental book, "Computer Ethics" (Johnson,

1985). In the 1990s' became clear the need for a new

applied ethics that could help organizations in:

reducing the probability of disasters deriving from

computers and in preparing guidelines and codes of

ethics for designers and employees. In particular

D.Gotterbarn introduced the concept of computer

ethics as a professional ethics that should develop

ICE-B 2012 - International Conference on e-Business

346

codes of conduct for computing professionals

(Gotterbarn, 1991). Internet and the Web put

humanity in front of ethical issues at global scale.

Think about the problem of laws in cyberspace,

where are the borders? Or all the issues related to e-

business where financial transactions are taking

place in global networks; or the effects on cultures

and traditions of a global education; not to mention

the digital divide among different areas of the planet.

Also, a growing attention is now dedicated to the

environmental impact of ICT: how to select

environmental-friendly hardware platforms? How to

minimize their power consumption? How to manage

the disposal of hardware devices at the end of their

life?

2.2 The Challenges for Information

Systems Management

Information Systems (IS) Management is a very

young area compared to other fields that have

developed well defined "Code of Ethics" (law,

medicine). Also, here we have an "ethical gap": ICT

are evolving at such a speed that we had no time to

develop guidelines for addressing the social and

ethical issues that ICT creates. In order to develop a

consistent framework that could help IS Managers in

dealing with ethical dilemmas in their daily life, we

propose to develop a "bridge" between the corporate

"business ethics" and "computer ethics" strategies

starting with a collection of guidelines. An

information system is relatively easy to use and

access, so committing a "victim-less crime", is easy.

If you have the credentials to access some

applications, then you better have a strong ethical

background otherwise the temptation to just click on

a screen is too higher: many computer crimes are

from insiders. E-business is global by definition and

now we have a world of more than 2.2 Billion users

interconnected (Internetworldstats, 2012). In many

areas we have difficulties in defining what law to

apply. For example privacy has very different

legislations in US and EU, so we need special

agreements for data crossing global networks

(Garante, 2012). Without an ICT infrastructure an e-

business simply does not exist, it cannot operate. In

this perspective the responsibility of IS managers is

evolving and escalating towards the highest levels.

The complexity and rapid evolution of ICT put the

management in front of true ethical dilemmas where

the decision between "right" or "wrong" is difficult

and now it is clear the need for a "computer ethics".

2.3 A Collection of Guidelines

A basic recommendation could be to have a good

knowledge of computing infrastructures inside an e-

business organization: a good knowledge of

computing solutions and of the related social,

environmental and ethical impacts can provide the

skills for a good responsible and sustainable e-

business, an alignment between business ethics

(know-what) and computer ethics (know-how). In the

following we provide a collection of guidelines.

1. Participatory design: the design of ICT

applications should start from the involvement of

people that will daily use the systems. The persons

that actually know and implements the business

flows and processes should be involved since the

beginning in the design of ICT solutions. This will

also ensure a good acceptance of the new working

environments; 2. workplace: a responsible e-

business will give particular attention to the design

of the working environment, to its safety and

ergonomics. It will provide also flexible solutions to

information workers like: tele-working and flexible

working time. Another hot issue is the personal use

of corporate computing resources; 3. hardware and

the environment: here the organization can really

make a difference by carefully selecting the

hardware suppliers that minimize the environmental

impact; 4. software: free or proprietary? It is now

well recognized the role of free and open source

software in the development of "local" software

companies (for customization and maintenance) and

a responsible e-business strategy should be aware of

this dimension. If the organization is going towards

"cloud computing" solutions, then it should ask to

cloud providers evidence of their choices (for

example, in the direction of Green IT); 5. open

formats: are data models based on open standards?

(in case of an e-business working also with public

authorities this "open data" approach is becoming

mandatory); 6. privacy: a good strategy could be to a

adopt a "minimalist" approach to the use of data; for

example to use only the minimum amount of data

required to process transactions. All personal data

should be available to their owners (the "habeas

data" approach) (Rodotà, 2004), and this is more

and more important also on mobile platforms (Van

Sinderen, 2006); 7. a responsible customer

relationship management: clear policies about data

mining and the use of customers' profiles should be

defined and published; 8. security and reliability:

these two issues should be among the top priorities

for a responsible e-business. For example a proper

use of "ethical hackers" (security experts that help

The Road to a Responsible and Sustainable e-Business

347

organizations in improving their security and in

minimizing risks) should be triggered by critical

situations or events (also important is a definition of

appropriate risk management plans, internal code of

ethics for computer professionals and managers); 9.

accessibility: to provide a universal access to

computing applications, a great attention should be

taken in the design of interfaces' accessibility in

particular to people with disabilities. The EU

Commission is taking particular attention to this area

of "eInclusion" that should drive the design of all

human-computer interfaces. An e-business with an

accessible Web interface has a strategic competitive

advantage and could show this "sensorial-barriers

free" approach as a core part of its CSR strategy; 10.

towards a knowledge-based society: a strong effort

should be put in knowledge management strategy,

the continuous cultural and professional update of

employees (lifelong education), the development of

"community of practices", the proper internal use of

Web 2.0 technologies (wikis, social networks)

should be fundamental choices for talents attraction

and retention.

3 CONCLUSIONS

Any enterprise that would like to be responsible and

with a sustainable strategy, needs to have also a

robust "business ethics". Organizations that develop

an e-business strategy should be aware that they are

doing business in a global computing platform. If

they really want to be "future-proof" organizations

they need a "business ethics" and a "computer

ethics" strategies that are consistently converging.

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