Solution Manual for Business and Society A

Strategic Approach to Social Responsibility 4th

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Solution Manual for Business and Society A Strategic Approach to Social Responsibility 4th E

CHAPTER 10
Technology Issues

PURPOSE AND PERSPECTIVE

In this chapter, we explore the nature of technology and its positive and negative effects on society.
Technology’s influence on the economy is very powerful, especially with regard to growth, employment,
and working environments. This influence on society includes issues related to the Internet, privacy,
intellectual property, health, and the general quality of life. The strategic direction for technology depends
on government, as well as on business’s ability to plan, implement, and audit the influence of technology
on society.

LECTURE OUTLINE
I. The Nature of Technology
Technology relates to the application of knowledge, including the processes and applications to solve
problems, perform tasks, and create new methods to obtain desired outcomes.
A. Characteristics of Technology
Characteristics of technology include the dynamics, reach, and the self-sustaining nature of
technological progress.
1. The dynamics of technology relate to the constant change that often challenges the
structure of social institutions and requires significant adjustments in the political,
religious, and economic structures of society.
2. Reach relates to the broad nature of technology as it moves through society.
3. The self-sustaining nature of technology relates to the fact that technology acts as a
catalyst to spur even faster development.
B. Effects of Technology
1. Civilizations must harness and adapt to changes in technology in order to maintain a
desired quality of life.
2. The global economy experienced the greatest acceleration of technological advancement
that ever occurred.
3. There are concerns that dramatic shifts in the acceleration and innovations derived from
technology may be spurring imbalances in not only the economy but also in our social
existence.
a. The flow of technology into developing countries can serve as a method to jump-start
economic development.
b. On the other hand, a failure to share technology or provide methods to disseminate
technology could cause a major divide in the quality of life.
II. Technology’s Influence on the Economy
A. Economic Growth and Employment
1. Over the past fifty years, technology has been a major factor in the economic growth in the
United States.
2. Investments in research and development are among the highest-return investments a
nation can make.
3. The relationship between business and consumers already is being changed by the
expanding opportunities for e-commerce, the sharing of business information, maintaining

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60 Chapter 10: Technology Issues

business relationships, and conducting business transactions by means of

telecommunications networks.
4. The Internet and related technologies are particularly important in business-to-business
relationships, where the improved quantity, reliability, and timeliness of information have
reduced uncertainties.
5. Advances in technology have created not only millions of new jobs, but also better health
and longer lives, new opportunities, and enrichment of our lives.
B. Economic Concerns About the Use of Technology
1. Small businesses in particular may have difficulty taking advantage of the opportunities
offered by the Internet.
2. The ability to purchase other types of technology may affect the nature of competition and
the success of various types of businesses.
3. The problems created by the accelerating change in technology can be addressed by
examining the outcomes associated with attempts to use technology and the impact of
technology on competition.
III. Technology’s Influence on Society
A. The Internet
1. The Internet has profoundly altered the way people communicate, learn, do business, and
find entertainment.
2. The interactive nature of the Internet has created tremendous opportunities for businesses
to forge relationships with consumers and business customers, target markets more
precisely, and even to reach previously inaccessible markets.
3. Despite the growing importance and popularity of the Internet, fraud has become a major
issue for businesses and consumers. Figure 10.2 lists the FTC’s top ten “dot cons.”
B. Privacy
1. Current technology has made it possible to amass vast quantities of personal information,
often without consumers’ knowledge.
2. On the positive side, today’s technology makes it easier for law enforcement agents to
catch criminals, for banks to detect fraud, and for consumers to learn about goods and
services and to communicate directly with businesses about their needs.
a. However, unauthorized use of personal information can result in e-mail spam, which
can impair productivity and sap network resources.
b. Computer cookies permit website operators to track how often a user visits the site,
what he or she looks at while there, and in what sequence.
3. Another area of growing concern is identity theft, which occurs when criminals obtain
personal information that allows them to impersonate someone else and use their credit to
obtain financial accounts and make purchases.
4. The use of information that websites require visitors to provide when registering is also
generating concern.
5. Privacy issues related to children are generating even more debate, as well as laws to
protect children’s interests.
3. Some measure of protection of personal privacy is already provided by the U.S.
Constitution, as well as Supreme Court rulings, the FTC, and federal laws.
4. International initiatives on privacy address privacy concerns around the world.
a. Many European countries, Canada, and Japan have established policies and
organizations to protect their citizens’ privacy.
b. However, protection of citizens’ privacy on the Internet is not a major public concern
in Russia.
5. Businesses are beginning to recognize that the only way to circumvent further government
regulation with respect to privacy is to develop systems and policies to protect consumers’
interests.

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 Chapter 10: Technology Issues 61

a.
More companies are hiring chief privacy officers (CPOs), who will establish policies
to protect consumer privacy.
b. Nonprofit organizations such as TRUSTe and the Better Business Bureau Online
have also stepped in to help companies develop privacy policies.
C. Intellectual Property
1. Intellectual property consists of the ideas and creative materials developed to solve
problems, carry out applications, educate, and entertain.
2. It is generally protected via patents and copyrights.
3. In the United States, losses total more than $11 billion a year from lost revenue due to
illegal copying of computer programs, movies, compact discs, and books.
4. Losses in propriety information and intellectual property may occur through a variety of
channels and by inadvertent or deliberate action.
5. Congress passed the Digital Millennium Copyright Act (DMCA) in 1998 to protect
copyrighted materials on the Internet and limit the liability of online service providers
(OSPs).
6. The Internet has created other copyright issues for some organizations that have found that
the web addresses (URLs) of other online firms either match or are very similar to their
own trademarks.
D. Health and Biotechnology
1. Bioethics refers to the study of ethical issues in the fields of medical treatment and
research, including medicine, nursing, law, philosophy, and theology, though today
medical ethics is also recognized as a separate discipline.
2. Because so many of our resources are spent on health care, the role of the private sector in
determining the quality of health care is an important consideration to society.
3. The government and the private sector often partner with academic researchers and
nonprofit institutes to develop new technologies in health and biotechnology.
4. Cloning, the replication of organisms that are genetically identical to the parent, has
become a highly controversial topic in biotechnology and bioethics.
a. Cloning has the potential to revolutionize the treatment of diseases and conditions
and create replacement human organs.
b. Despite the potential of cloning technology, many people believe it is unethical to
meddle with nature or destroy human embryos that might otherwise have been
capable of life.
5. Genetically modified (GM) foods can increase food production to satisfy the growing
demand for food without increasing land use.
a. Many people do not realize that some of the foods they eat were made from
genetically engineered crops.
b. Consumer groups are increasingly concerned that these foods could be unhealthy
and/or harmful to the environment.
c. A number of companies have responded to public concerns about genetically
modified food products by limiting or avoiding their use altogether.
d. Defenders of biotechnology say that consumer fears about GM have not been
substantiated by research.
IV. Strategic Implementation of Responsibility for Technology
A. The Role of Government
1. The government must maintain the basic infrastructure and support for technology in our
society.
2. The Defense Department explores ways that technology can improve the quality of life.
3. The government also serves as a watchdog to ensure that technology benefits society, not
criminals.

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62 Chapter 10: Technology Issues

B. The Role of Business

1. Business is involved in both reactive and proactive attempts to market and make effective
use of technology.
2. Reactive concerns relate to issues that have legal and/or ethical implications as well as to
issues of productivity, customer welfare, or other stakeholder issues.
a. More companies are reacting to unacceptable uses of technology by monitoring their
employees’ behavior online.
b. Even though companies may be legally within their rights to monitor and control the
use of websites by employees, such control raises strategic issues related to trust and
the type of long-term relationships that firms want to have with their employees.
3. On the other hand, a strategic, proactive approach to technology will consider the impact
on social responsibility.
a. Proactive management of technology requires developing a plan for utilizing
resources to take advantage of competitive opportunities.
b. To promote the responsible use of technology, a firm’s policies, rules, and standards
must be integrated into its corporate culture.
c. Top managers must consider the social consequences of technology in the strategic
planning process.
C. Strategic Technology Assessment
1. Companies can employ a procedure known as technology assessment to foresee the effects
new products and processes will have on their firm’s operation, on other business
organizations, and on society in general.
2. This assessment is a tool that managers can use to evaluate their firm’s performance and to
chart strategic courses of action to respond to new technologies.
a. Managers can estimate whether the benefits of adopting a specific technology
outweigh costs to the firm and to society at large.
b. The assessment process can also help companies ensure compliance with government
regulations related to technology.
3. If the assessment process indicates that the company has not been effective at utilizing
technologies or is using them in a way that raises questions, changes may be necessary.
4. Organizations should focus on the positive aspects of technology to determine how it can
be used to improve the work environment, its products, and the general welfare of society.
ANSWERS TO THE DISCUSSION QUESTIONS
1. Define technology and describe three characteristics that can be used to assess it.
Technology correlates the application of knowledge and the processes and applications to solve
problems, perform tasks, and create new methods to obtain desired outcomes. Intellectual knowledge
is included as well as the physical systems utilized to achieve business and personal objectives. Three
characteristics of technology include dynamics, reach, and the self-sustaining nature of technological
progress. The dynamics of technology relate to the constant change that requires significant
adjustments in the political, religious, and economic structures of society. The scope of technology
includes the far-reaching nature of technology as it moves through society, and the self-sustaining
nature of technology describes the fact that technology acts as a catalyst to spur even faster
development.
2. What effect has technology had on the U.S. and global economies? Have these effects been positive
or negative?
Information and telecommunication technology has minimized national borders, allowed people to
overcome the physical limitations of time and space, and enabled people to acquire customized goods
and services that cost less and are of higher quality. Due to technology, millions of jobs have been

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 Chapter 10: Technology Issues 63

created, as well as better health, longer lives, new opportunities, and enrichment of lives. However,
economic development could suffer in underserved areas without greater access to the latest
technology.
3. Many people believe that the government should regulate business with respect to privacy online, but
companies say self-regulation is more appropriate. Which approach would most benefit consumers
most? Business?
Most likely, government regulation will benefit consumers because business will be accountable to a
higher authority. Government intervention could reduce consumers’ concerns about falling victim to
privacy infringement. However, managers and companies usually prefer self-regulation because there
is the ability to control activities and associated costs. Many companies have been very proactive on
the privacy issue. Their actions and commitment to privacy have demonstrated that self-regulation can
work. However, government regulation would make the privacy issue of concern to all companies, not
just those proactive firms.
4. What is intellectual property? How can owners of intellectual property protect their rights?
Intellectual property consists of the ideas and creative materials developed to solve problems, carry
out applications, educate, and entertain. It is also considered the end-product of the creative process.
Owners can copyright their material in order to protect their rights to intellectual property. However,
there is wide discrepancy in the enforcement of copyright laws in different countries.
5. What is bioethics? What are some of the consequences of biomedical research?
Bioethics is the study of ethical issues in the fields of medical treatment and research, which includes
medicine, nursing, law, philosophy, and theology. There are consequences of biomedical research,
some of which hold promise for curing disease yet open the possibility for designer babies and genetic
alteration and replication of humans. Many people feel it is unethical to meddle with nature,
especially human embryos that may be capable of life. Gene patents may also permit a company to
control the diagnosis and treatment of specific diseases for years, thereby raising anticompetition
concerns.
6. Should genetically modified foods be labeled as “genetically modified”? Why or why not?
Student answers will vary. One side of the argument may reflect the following statement.
Genetically modified foods should be labeled to allow consumers to decide whether or not they want
to purchase a food product that was grown, ripened, harvested, or otherwise treated with genetic-
altering technology. Although they may choose to purchase genetically modified foods, consumers
have a right to know about the modifications.
7. How can a strategic technology assessment help a company?
A technology assessment represents a firm’s proactive stance and commitment to understanding the
effects of its technology on many facets of social responsibility. For example, the assessment is used
to foresee the effects of new products and processes on the firm’s operations, on other business
organizations, and on society in general. The assessment also evaluates the company’s understanding
and implementation of laws related to technology, the existence and effectiveness of technology
training and education, risks associated with technology, and other areas associated with social
responsibility and stakeholder relationships. A strategic technology assessment ensures that
technology is adopted, used, evaluated, and improved with respect to a firm’s social responsibility
philosophy and overall strategic direction.

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Solution Manual for Business and Society A Strategic Approach to Social Responsibility 4th E

64 Chapter 10: Technology Issues

COMMENTS ON THE EXPERIENTIAL EXERCISE

Visit three websites that are designed primarily for children or that focus on products of interest to children
under age thirteen. For example, visit the websites for new movies, games, action figures, candy, cereal, or
beverages. While visiting these sites, put yourself in the role and mind-set of a child. What type of language
and persuasion is used? Is there a privacy statement on the site that can be understood by children? Are
there any parts of the site that might be offensive or worrisome to parents? Provide a brief evaluation of
how well these sites attend to the provisions of the Children’s Online Privacy Protection Act.
This experiential exercise requires students to visit websites targeted at children (for example,
http://www.nick.com and http://www.disney.com). When visiting a site, students should take on the
perspective of a child, assessing the site for any persuasion, potentially worrisome content, and
privacy issues. Students should also take a look at guidelines of the Children’s Online Privacy
Protection Act. The exercise requires knowledge of government policy, strong analytical skills, and
the ability to verify information and recognize subjectivity.

COMMENTS ON THE WHAT WOULD YOU DO? EXERCISE

This exercise focuses on James Kitling, the director of information technology at a medium-sized company
employing mainly professionals, administrative staff, and customer service personnel. Several managers
have come to him complaining about the amount of time employees are spending using the Internet for
personal matters. Despite his belief that this is a growing problem affecting productivity, he has been
hesitant to purchase and implement an Internet monitoring system for fear of causing a sharp decline in
employee trust. In his role, he is expected to provide leadership in developing a solution. Students should
discuss these issues in terms of privacy, company resources, and the potential return on investment of
monitoring software. They should analyze the extent of the problem at Kitling’s company and offer
suggestions on curbing the problem while minimizing the erosion of employee trust.

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