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Ethics of IT Organizations (What is whistle-blowing, and what ethical…
Ethics of IT Organizations
What are contingent workers, and how are they employed in the information technology industry?
Contingent work is a job situation in which an
individual does not have an explicit or implicit
contract for long-term employment
Contingent workers include:
Independent contractors
Temporary workers through employment agencies
On-call or day laborers
On-site workers provided by contract firms
Needed for pronounced IT staffing fluctuations
Workers hired for the life of the project only
Sources
Temporary agencies
Employee leasing
Consulting organizations
Firms that provide temporary help:
Recruit, train, and test their employees in a wide
range of job categories and skill levels
Assign them to clients
Employee leasing
Business outsources all or part of its workforce to a
professional employer organization
Subject to special regulations regarding workers’
compensation and unemployment insurance
Coemployment relationship
Two employers have actual or potential legal rights
and duties with respect to the same employee or
group of employees
Advantages of using contingent workers
Business does not pay for benefits
Can continually adjust the number of contingent
workers to stay consistent with its business needs
Does not customarily incur training costs
Disadvantages of using contingent workers
May lack a strong relationship with the firm
Low commitment to the company and its projects
High turnover rate
Workers gain valuable practical experience working
within a company’s structure and culture
Lost when workers depart at the project’s completion
When deciding to use contingent workers:
Recognize the trade-off between:
Completing a single project quickly and cheaply
Developing people in the organization
When staffing is truly temporary:
Use of contingent workers is a good approach
Think twice about using contingent workers:
When they are likely to learn corporate processes and strategies that are key to the company’s success
Deciding when to use contingent workers
Can raise ethical and legal issues
Potential liability for:
Withholding payroll taxes
Payment of employee retirement benefits
Payment of health insurance premiums
Administration of workers’ compensation
Can be viewed as permanent employees by:
Internal Revenue Service
Labor Department
State workers’ compensation agency
State unemployment agencies
Vizcaino v. Microsoft lawsuit
Deciding factor is degree of control company
exercises over employees
Employers must exercise care in the treatment of
contingent workers
What key ethical issues are associated with the use of contingent workers, including H-1B visa holders and offshore outsourcing companies?
H-1B Workers
Meet critical business needs
Have essential technical skills and knowledge not
readily found in the U.S.
Employers must pay H-1B workers the prevailing
wage for the work being performed
Maximum continuous period of six years
After six years, the foreign worker must remain
outside the United States for one year before
another H-1B petition can be approved
Make up less than 0.1% of the U.S. workforce
Nearly 40% employed as computer programmers
Continued use of H-1B workers
Symptom of a larger, more fundamental problem
U.S. not developing sufficient IT employees
Top five outsourcing countries
India
China
Canada
United Kingdom
Philippines
Federal cap set on the number of H-1B visas
Applies only to certain IT professionals
Large number of workers are exempt from cap
English as a second language
Workers who are not fluent in English:
May find it difficult and uncomfortable to participate
May create their own cliques
May stop trying to acclimate
Can hurt a project team’s morale and lead to division
Managers and coworkers should:
Strive to help improve H-1B workers’ English skills
and cultural understanding
Be sensitive to workers’ heritage and needs
H-1B application process
Job offer employer must also offer sponsorship
Application has two stages
Labor Condition Attestation (LCA)
H-1B visa application
If H-1B are more than 15% percent of workforce:
Must prove that it first tried to find U.S. workers
Must prove not hiring H-1B after laying off similar U.S.
worker
American Competitiveness in the Twenty-First
Century Act (2000)
Allows current H-1B holders to start working for
employers as soon as their petitions are filed
Using H-1B workers instead of U.S. workers
Good for short-term hiring
Long-term hiring
Lessens incentive to educate and develop U.S.
workforces
Does nothing to develop strong core of permanent
U.S. IT workers needed in future
Potential exploitation of H-1B workers
Salary abuse by unethical companies
H1-B workers are paid $10,000 to $30,000 less than
U.S. workers in the same job
Visa Reform Act (2004)
Defined a modified wage-rate system
At end of the six-year visa term
If no green card, firm loses worker
Suddenly unemployed worker must return home
Temporary work visa
U.S. Citizenship and Immigration Services (USCIS)
For people who work in specialty occupations
Outsourcing
Approach to meeting staffing needs
Long-term business arrangement
Company contracts with an outside organization that
has expertise in providing a specific function
Rationale
Lower costs
Obtain strategic flexibility
Keep staff focused on core competencies
Offshore Outsourcing
Variation of outsourcing
Services provided by an organization whose
employees are in a foreign country
Companies reduce labor costs
Increasing in IT industry
As key processes move offshore, U.S. IT providers
are forced to lower prices
Common to use offshore outsourcing for major
programming projects
Pros and cons of offshore outsourcing
Low wages
• Increasing due to demand
Dramatically speeds up development efforts
• Make progress on a project around the clock
Can also result in new expenses
Additional time to select an offshore vendor
Additional costs for travel and communications
Same ethical issues as H1-B and contingent workers
Difficulty of communications over long distances
Strategies for successful offshore outsourcing
Expertise in technologies involved in the project
Project manager speaks native language of
employer
Large staff available
State-of-the-art telecommunications setup
High-quality on-site managers and supervisors
What is whistle-blowing, and what ethical issues are associated with it?
Effort to attract public attention to a negligent,
illegal, unethical, abusive, or dangerous act by a company
Whistle-blower
Usually has personal or special knowledge
Risks own career
Might even affect lives of friends and family
Must choose between protecting society and
remaining silent
Protection laws allow employees to alert authorities to employer actions that are unethical, illegal, or unsafe, or that violate specific public policies
No comprehensive federal law
Each law has different:
Filing provisions
Administrative and judicial remedies
Statutes of limitations
False Claims Act (“Lincoln Law”)
Enacted during the Civil War
Enticed whistle-blowers to come forward
Offered a share of the money recovered
Qui tam provision allows private citizen to file in
name of government
Violators are liable for three times the dollar
amount the government is defrauded
Provides strong whistle-blower protection
Complexity requires advice of an attorney
Whistle-blower protection for private-sector workers
Laws prevent workers from being fired because of
an employee’s participation in “protected” activities
Whistle-blowers can file claims against their
employers for retaliatory termination
Whistle-blowers are entitled to jury trials
If successful at trial, can receive punitive damage
awards
What is an effective whistle-blowing process?
Dealing with a whistle-blowing situation
Assess the seriousness of the situation
Begin documentation
Attempt to address the situation internally
Consider escalating the situation within the company
Assess implications of becoming a whistle-blower
Use experienced resources to develop action plan
Execute the action plan
Live with the consequences
What measures are members of the electronics manufacturing industry taking to ensure the ethical behavior of the many participants in their long and complex supply chains?
Electronic Industry Citizenship Coalition (EICC)
Promotes common code of conduct for ICT industry
Focuses on the areas of:
Worker safety and fairness
Environmental responsibility
Business efficiency
Coalition membership is voluntary
Code of conduct defines performance, compliance, auditing, and reporting guidelines across five areas of social responsibility
Guiding principles of social responsibility
Labor
Must uphold the human rights of workers
Health and safety
Must provide safe and healthy work environment
Environment
Adverse effects minimized
Management system
Ensures compliance with code
Ethics
Must uphold the highest standards of ethics
Key Ethical Issues for Organizations
Use of nontraditional workers
The Need for Nontraditional Workers
Bureau of Labor Statistics (BLS) forecast
– Employment in IT will grow by 38.3%
– Driven by increasing reliance of business on IT
– Continuing importance of maintaining systems and
network security
Period from 2006 to 2014
– Highest forecasted growth rate of 50%
• Networking and data communications positions
– Concern about a shortfall in the number of U.S.
workers to fill these positions
Long-term shortage of IT workers
Employers turning to nontraditional sources
Sources include:
Contingent workers
H-1B workers
Outsourced offshore workers
Ethical decisions about whether to:
Recruit new/more workers from these sources
Develop their own staff to meet their needs
Whistle-blowing
Green computing
ICT code of ethics
Green Computing
To manufacture truly “green” products, companies
must:
Reduce the amount of hazardous materials used
Increase amount of reusable or recyclable materials
Help consumers dispose of their products in an
environmentally safe manner at the end of the
product’s useful life
Devices contain thousands of components
Some harmful to humans and environment
Entire supply chain at risk
EPEAT (Electronic Product Environmental
Assessment Tool)
Enables purchasers to evaluate, compare, and
select electronic products
Based on a total of 51 environmental criteria
Products are ranked in three tiers of environmental
performance
European Restriction of Hazardous Substances
Directive
Restricts use of many hazardous materials in
computer manufacturing
How to safely dispose of obsolete computers
Many states have recycling programs
Some manufacturers have developed programs
Greenpeace environmental activist organization
Issues quarterly ratings of manufacturers according
to the manufacturers’ policies on:
Toxic chemicals, recycling, and climate change