CSE332

INDUSTRY ETHICS
AND LEGAL ISSUES
 Course Overview
L T P: 2 0 0 Credits:2
Text Book:

• 1. ETHICS IN INFORMATION TECHNOLOGY by GEORGE W

REYNOLDS, CENGAGE LEARNING

• Reference books:

• “INTELLECTUAL PROPERTY RIGHTS-LAW AND PRACTICE” by ICSI

House, 22, Institutional Area, Lodi Road, New Delhi 110 003
Marks Breakup:
Activity Marks
Attendance 5
Continuous Assessment (CA)* 25
Mid-Term Examination (MTE) 20
End-Term Examination (ETE) 50
Total 100

* 2 Best CA out of 3 CA (Class test, MCQ).

CA1 (Class Test) will be held on 5th Week
CA2 (Class Test) Will be held on 9th Week
CA3 (Class Test) Will be held on 12th Week
8/16/2022 CSE332, Lovely Professional University
What is an Industry ethics and
legal issues
 What is an Industry?
• Any type of Economic Activity producing products or
Services.
• It is part of a chain –from raw materials to finished
product, finished product to service sector, and service
sector to research and development.
• Eg:-Google Assistant(product) launched by Google
ETHICS
 Ethics
• Computer ethics is a system of moral standards or
values used as a guideline for computer users.
• Eg:- Google has released what is effectively a rulebook
for how the company will apply AI technology
• The seven principles include making sure that AI is
applied to applications that are socially beneficial, safe
and won't create unfair bias.
 Legal Issues
• A legal issue can be any question of law that arises from a
particular set of facts.
• To prevent the misuse of computers.
Eg:- Copying and Legal Issues
make sure your research and development teams
thoroughly research the patents and copyrights of your
current product, to avoid a messy legal battle should you
step on a competitor's toes.
 Learning Outcomes
By the end of this course students will be able to:
• To understand ethical environment of work.
• Understand about the latest trends and current issues in
information technology.
• Describe the various types of funding and schemes for start
up business in IT sector.
• Comply with various cyber laws and related semantics for
deploying security mechanisms in IT industry.
• Understand various types of legal, ethical and professional
issues in Information Security.
• Understand the concept of intellectual properties.
 Learning Outcomes
• Reflectively judge the morality of behaviours involving the
use of computers
• Defend or attack a wide range of moral and/or legal
standpoints involving the use of computers.
• Recognize and act upon legal issues and constraints in
computing
6 UNITS
 UNIT 1
Ethics

• What is an ethical work environment,

• Ethical behavior of IT professional.
• Common ethical issues for IT users
 UNIT 2
Companies
• What are the companies act
• What is NASSCOM,
• What is STPI
• And Recent technology advancement,
 UNIT 3
Government Funding and schemes for Startup
• What are Startups.
• Benefit of startups.
 UNIT 4
Startup in IT
• Idea
• Planning
• General company Description,
• Marketing plan,
• Operational plan, Management
• And the most important…………...
 UNIT 5
Legal, Ethical and Professional issues in Information
Security:
• What is Cyber Crime?
• Cyber law of India
• Need for cyber law in India
 UNIT 6
• What is Intellectual Properties ?
• What is the need?
• How we can do it
Intellectual Properties
Types of IP
ETHICS
UNIT 1
 ETHICS
• Ethics is the field of study that is concerned
with questions of value, i.e., judgments about
what human behavior is "good" or "bad" in
any given situation.

• Ethics are the standards, values, morals,

principles, etc., which are used to base one's
decisions or actions on; often there is no clear
"right" or "wrong" answer.
 ETHICS
• Ethics is a set of belief about right and wrong
behaviour.
 Cisco “World’s Most Ethical Company”

1. It believes “A strong commitment to ethics is critical to our

long-term success as a company. Any success that is not achieved
ethically is no success at all.

2. Cisco conducts numerous programs aimed at fulfilling what it

sees as its corporate social responsibilities, Donations, manages
energy and greenhouse emission generated by its operations.
 Cisco “World’s Most Ethical Company”
1. It believes “A strong commitment to ethics is critical to our
long-term success as a company. Any success that is not achieved
ethically is no success at all”.

2. Cisco conducts numerous programs aimed at fulfilling what it

sees as its corporate social responsibilities, Donations, manages
energy and greenhouse emission generated by its operations.

3. Cisco Chairman and CEO advocates Ethical Behaviour It

communicates its Code of Conduct to suppliers, monitors their
compliance, and helps them improve performance.
 Answer the question
• What does it mean for an individual to act in
an ethical manner? What does it mean for an
organization to act ethically?

• How should an organization balance its

resources between pursuing its primary
mission for existence and striving to meet
social responsibility goals?
What is difference between
moral, ethics and law?
 Ethics and Morality

Ethics refers to standards of conduct, standards

that indicate how one should behave based on
moral duties and virtues, which themselves are
derived from principles of right and wrong.
 Moral Relativism

Values are determined by the society

we grow up in, and there are no
universal values. Moral values are
simply customs or conventions that
vary from culture to culture.
 Moral Consistency
To what extent do you think the following individuals are
morally inconsistent?

A. an anti-abortionist who supports the death penalty

B. a vegetarian who buys leather shoes
C. a socialist who educates his children at a private school
D. A politician who advocates family values and has an affair
E. An environmental activist who drives an SUV
F. Someone who thinks stealing is wrong but makes illegal
copies of computer software or music.
 The Relationship Between
Ethics and Law

If everyone made the same ethical decisions

with the same results, there would be no need
for law. In the real world, however, some
people engage in conduct that most people
agree is wrong.
 Why Law is Necessary
• Law is the system of rules of conduct
established by the government of a society to
maintain stability and justice.

• Law defines the legal rights and duties of the

people and provides the means of enforcing
these rights and duties.
 Ethics and Legal Conflicts
• Because law is made by people, it is imperfect.
• Legislators and judges bring their own
personal opinions on ethics to the lawmaking
process.
• As a result, ethics and law will sometimes
conflict.
Define Law
Ethics
Ethics
 Software Piracy

• The software is being copied or used in a way

that violates the terms of service.

• This often is cited as a cause for low sales of a

piece of software or poor profits when the
software itself is very popular.
 Example
For example:-
Attitudes toward software
piracy- the practice of illegally
making copies of software or
enabling others to access
software to which they are not
entitled—range from strong
opposition to acceptance of
the practice as a standard
approach to conducting
business.
Why Piracy happens?
Survey
IMPORTANCE OF
INTEGRITY
Integrity means following your moral or ethical
convictions and doing the right thing in all
circumstances, even if no one is watching you.
Having integrity means you are true to yourself
and would do nothing that demeans or
dishonour you..

Example:- Temptation of picking money or cell

phone from the bench
 Importance of Integrity in Business
World
• Open your notebook and write ,
• If you have 1 lakh rupee only to buy a phone
which phone will you buy. and why?
• Write any 5 reason.
 ETHICS IN THE BUSINESS WORLD
Why promoting Good business ethics is important:-
• To gain the goodwill of the community
• To create an organization that operates consistently.
• To produce good business
• To protect the organization and its employees from
legal action
• To avoid unfavourable publicity.
Example :-the Peanut Corporation of America allegedly
shipped tainted products from its plant in Georgia, which
led to a salmonella outbreak in 2008 that killed at least
eight people and sickened over 550 people in 43 states.
To gain the goodwill of the
community
Blake Mycoskie started Toms Shoes on the premise that
for every pair of shoes sold, one pair would be donated
to a child in need. This innovative idea resulted from a
trip to Argentina where Mycoskie saw an overwhelming
number of children without shoes. Toms Shoes
recognized that consumers want to feel good about
what they buy, and thus directly tied the purchase with
the donation. In just four years, Toms Shoes has
donated more than 400,000 shoes, evidence that
consumers have clearly embraced the cause.
 CSR
Corporate social responsibility (CSR) is the
concept that an organization should act ethically
by taking responsibility for the impact of its
actions on the environment, the community,
and the welfare of its employees
No doubt organization exist primarily for profits
and customer satisfaction but they also have
some basic responsibilities to society.
Philanthropy is one way in which an
organization can demonstrate its values in
action and make a positive connection with its
stakeholders.

.
 To create an organization that
operates consistently
Consistency also means that shareholders, customers,
suppliers, and the community know what they can expect
of the organization that it will behave in the future much
as it has in the past
• Operate with honesty and integrity, staying true to organizational
principles.
• Operate according to standards of ethical conduct, in words and
action.
• Treat colleagues, customers, and consumers with respect.
• Strive to be the best at what matters most to the organization.
• Value diversity.
• Make decisions based on facts and principles
Example :- Need of 30 megapixel phone
 TO PRODUCE GOOD BUSINESS
• Companies that produce safe and effective products
avoid costly recalls and lawsuits.
The recall of the weight loss drug Fen-Phen cost its
maker, Wyeth-Ayerst Laboratories, almost $14 billion in
awards to victims, many of whom developed serious
health problems as a result of taking the drug.
Example :- MAGGI
 Avoiding Unfavourable Publicity
• In 2012, Google agreed to pay a fine of $22.5
million to end an FTC investigation into
allegations that the firm utilized cookies and
bypassed privacy settings to track the online
habits of people using Apple’s Safari browser..
• Why did Google agree to pay?
The amount of the fine, while the largest in FTC
history, represented less than one day’s worth of
Google’s profits. Why ?
• The public reputation of a company strongly
influences the value of its stock, how consumers
regard its products and services,
• The degree of oversight it receives from
government agencies,
• The amount of support and cooperation it
receives from its business partners.
Thus, many organizations are motivated to build a
strong ethics program to avoid negative publicity
Lecture 2

Unit 1
 Improving Corporate Ethics

• Assume one scenario, you want to start a

company (any company) what type of rules
you will going to make for your employee.
Improving Corporate Ethics

• Ethics Resource Centre found

Attended Ethical workshop NOT attended ethical

workshop
86% of them are perceiving 25% of them are perceive a
strong ethical culture culture that promote integrity
 Characteristics of a Successful Ethics
Program
• Employees are willing to seek advice about
ethics issues.
• Employees feel prepared to handle situations
that could lead to misconduct.
• Employees are rewarded for ethical behaviour.
• The organization does not reward success
obtained through questionable means.
• Employees feel positively about their
company.
Survey after completion of workshop
• National business survey
How can we improve business ethics ?
Appointing a Corporate Ethics Officer
• A corporate ethics officer (also called a corporate
compliance officer) provides an organization with
vision and leadership in the area of business
conduct.
• The corporate ethics officer should be a well-
respected, senior-level manager who reports
directly to the CEO.
• Ethics officers come from diverse backgrounds,
such as legal staff, human resources, finance,
auditing, security, or line operations.
Need of appointing CEO
• Started in 1980 when series of defence-
contracting scandals when firms used bribes
to gain inside information that they could use
to improve their contract bids.

• Increase in appointments followed in the

aftermath of the mortgage loan scandals
uncovered beginning in 2008.
 Specific responsibilities include the
following:
• Responsibility for compliance—that is, ensuring
that ethical procedures are put into place and
consistently adhered to throughout the
organization
• Responsibility for creating and maintaining the
ethics culture that the highest level of corporate
authority wishes to have
• Responsibility for being a key knowledge and
contact person on issues relating to corporate
ethics and principles.
 Ethical Standards Set by Board of
Directors
• Responsible for careful and responsible management of an
organization.
• In a for-profit organization, primary objective is to oversee the
organization’s business activities and management for the benefit
of all stakeholders
• A board of directors fulfils some of its responsibilities directly and
assigns others to various committees. The board is not normally
responsible for day-to-day management and operations
• However, the board is responsible for supervising the
management team. Board members responsibilities are :-
1. set highest standard for personal and professional integrity
2. ethical conduct
3. compliance with laws and regulations.
• News Corporation is a media conglomerate founded by Rupert Murdoch—
with recent annual revenue over $30 billion generated by its cable networks
(including Fox News Channel), film and television production subsidiaries,
and publishing units. In 2009, it came to light that News Corporation’s
British subsidiary, News International Ltd., publisher of the highly popular
Sunday tabloid paper, News of the World, used telephone hacking and
bribes to police to obtain stories about celebrities, sports figures,
politicians, and ordinary citizen’s. It was alleged that the practice was well
known to senior executives within the company. Based on strong negative
public reaction, News Corporation stopped publication of the News of the
World tabloid, and the British government blocked a major deal in which
News Corporation was to fully acquire the highly successful British
broadcasting company BskyB. These actions resulted in a $3 billion drop in
the stock value of News Corporation. In addition, the scandal led to the
arrest of over 60 former and current journalists, and many high-level
executives resigned from the firm. In a lawsuit filed in March 2011,
shareholders claimed lack of board oversight for failing to react to warning
signals that should have alerted them to the telephone hacking.
 Establishing a Corporate Code of
Ethics
• A code of conduct defines how a company’s
employees should act on a day-to-day basis.
• It reflects the organization’s daily operations,
core values and overall company culture
• every code of conduct is unique to the
organization it represents.
Including Ethical Criteria in Employee
Appraisals
• Performance
• Self improvement
• Successful completion of projects
• Initiatives
• Maintenance of good customer relation
 Think !
• You and your best friend both are working in a
same company and you are doing very well and
you are expecting a promotion in a week and
your friend is not serious about his job. He got so
many warnings from boss ,a small mistake and he
can lose his job and this morning he calls you at 9
a.m. at work and ask for a favor that he is having
trouble this morning and will be an hour late for
work. He ask you to mark his manual attendance .
And one thing for sure boss is on checking. What
would you do?
- Creating an ethical work
environment
- Ethical decision making
- Ethics in information
technology
UNIT 1
Creating an Ethical Work Environment
 Creating an Ethical Work Environment

Employees must have a knowledgeable

resource with whom they can discuss
perceived
unethical practices
INCLUDING ETHICAL CONSIDERATIONS IN
DECISION MAKING
• Lets take a general scenario , you are a carrier
councellor and suppose a parent visit you with
their ward and according to them their child is
pursuing a B.Tech CSE and he is in third year
and he was doing well academically but
recently he scored very less marks and he is
not interested in this field, he is interested in
fine arts then how you will going to do the
right decision making
 DEVELOP A PROBLEM STATEMENT
• A problem statement is a clear, concise
description of the issue that needs to be
addressed.
It Answers-
• What do people observe that causes them to think
there is a problem?
• Who is directly affected by the problem?
• Is anyone else affected?
• How often does the problem occur?
• What is the impact of the problem?
• How serious is the problem?
 Problem Statement
• Why does new generation like Hollywood
movies more than Bollywood movies.
 DEVELOP A PROBLEM STATEMENT
• Good problem statement: Our product supply
organization is continuously running out of stock of
finished products, creating an out-of-stock situation on
over 15 percent of our customer orders, resulting in
over $300,000 in lost sales per month.
• Poor problem statement: We need to implement a new
inventory control system. (This is a possible solution, not
a problem statement.)
• Poor problem statement: We have a problem with
finished product inventory.(This is not specific enough.)
 IDENTIFY ALTERNATIVES
• It is ideal to enlist the help of others, including
stakeholders, to identify several alternative
solutions to the problem.
• Brainstorming with others will increase your
chances of identifying a broad range of alternatives
and determining the best solution.
• Try not to be critical of ideas, as any negative
criticism will tend to shut down the discussion, and
the flow of ideas will dry up.
• Simply write down the ideas as they are suggested.
EVALUATE AND CHOOSE AN ALTERNATIVE
• Virtue Ethics Approach • Utilitarian Approach
❖ It focuses on how you ❖ You should choose the
should behave and think action or policy that has
about relationships if you the best overall
are concerned with your consequences for all
daily life in a community. people who are directly or
❖ Example- honesty and indirectly affected.
openness when dealing ❖ Example- Business
with others are generally managers, legislators, and
considered virtues; scientists weigh the
however, a corporate benefits and harm of
purchasing manager who policies when deciding
is negotiating a whether to invest
multimillion dollar deal resources in building a
might need to be vague in new plant in a foreign
discussions with potential country, to enact a new
suppliers. law, or to approve a new
prescription drug.
• Fairness Approach • Common Good Approach
❖ The fairness approach ❖ It is based on a vision of
focuses on how fairly society as a community
actions and policies whose members work
distribute benefits and together to achieve a
burdens among people common set of values and
affected by the decision. goals.
❖ It attempt to implement
❖ The guiding principle of this social systems, institutions,
approach is to treat all and environments that
people the same. everyone depends on and
that benefit all people.
❖ Examples include an
effective education system,
a safe and efficient
transportation system, and
accessible and affordable
health care.
 IMPLEMENT THE DECISION
• Once an alternative is selected, it should be
implemented in an efficient, effective, and
timely manner.
• It is often much easier said than done, because
people tend to resist change.
 EVALUATE THE RESULTS
• After the solution to the problem has been
implemented, monitor the results to see if the
desired effect was achieved, and observe its
impact on the organization and the various
stakeholders.
ETH ICS IN INFORMATION
TECHNOLOGY
Here are some examples that raise public concern
about the ethical use of information technology:

• Many employees have their email and Internet

access monitored while at work, as employers
struggle to balance their need to manage
important company assets and work time with
employees’ desire for privacy and self direction.
• Millions of people have downloaded music
and movies at no charge and in apparent
violation of copyright laws at tremendous
expense to the owners of those copyrights.
• Organizations contact millions of people
worldwide through unsolicited email (spam)
as an extremely low-cost marketing approach.

• Hackers break into databases of financial and

retail institutions to steal customer
information, then use it to commit identity
theft—opening new accounts and charging
purchases to unsuspecting victims.
• Students around the world have been caught
downloading material from the Web and
plagiarizing content for their term papers.

• Web sites plant cookies or spyware on visitors’

hard drives to track their online purchases and
activities.
ETHICS FOR IT WORKERS
&
IT USERS
 Profession
A profession is a calling that requires specialized
knowledge and often long and intensive
academic preparation.

Professional ?
Professionals
 Professional Employee
The United States Code of federal regulations defines a “professional
employee” as one who is engaged in the performance of work:

• Requiring knowledge of an advanced type in a field of science or

learning customarily acquired by a prolonged course of
specialized intellectual instruction and study in an institution of
higher learning.
• Requiring the consistent exercise of discretion and judgment in its
performance.
 Are IT Workers Professionals?
• IT Professional can be:
– Marketing analysts, financial consultants, and IT specialists such as
mobile application developers, software engineers, systems analysts,
and network administrators.

One could argue, however, that not every IT role requires “knowledge
of an advanced type in a field of science or learning customarily
acquired by a prolonged course of specialized intellectual instruction
and study,” to quote again from the United States Code.

From a legal perspective, IT workers are not recognized as

professionals because they are not licensed by the state or federal
government.
• IT workers often have the skills and knowledge to
abuse systems and data or to enable others to do so.

• Software piracy is an area in which IT workers may

be tempted to violate laws and policies. Although
end users often get the blame when it comes to
using illegal copies of commercial software

• Software piracy in a corporate setting is sometimes

directly traceable to IT staff members—either they
allow it to happen or they actively engage in it, often
to reduce IT-related spending.
Common Ethical Issues for IT Users
1)Software Piracy:
• Software Piracy in a corporate setting can sometimes be
directly traceable to IT professionals—they might allow it to
happen, or they might actively engage in it.
• Sometimes IT users are the ones who commit software
piracy. A common violation occurs when employees copy
software from their work computers for use at home.
When confronted, the IT user’s argument might be: “I
bought a home computer partly so I could take work home
and be more productive; therefore, I need the same
software on my home computer as I have at work.”
2) Inappropriate Use of Computing Resources:
• Some employees use their computers to surf popular Web sites
that have nothing to do with their jobs, participate in chat rooms
and play computer games. These activities eat away at worker
productivity and waste time.

• Example :- Executive Director of the Pentagon’s Missile Defence

Agency issued a memo to its 8,000 employees warning them to
stop using their work computers to access Internet objectionable
sites. One concern of government officials is that these sites are
infected with computer viruses and other malware; criminals
and foreign intelligence agencies often use such sites as a means
to gain access to government and corporate computer networks.
For example, a foreign agent can embed malware capable of
stealing data or opening computer communications ports
whenever certain photos or videos are downloaded to a
computer
3) Inappropriate Sharing of Information:
• Every organization stores vast amounts of
information that can be classified as either
private or confidential. Private data
describes individual employees—for
example, their salary information,
attendance data, health records, and
performance ratings. Private data also
includes information about customers—
credit card information, telephone number,
home address, and so on.
 Business Software Alliance (BSA)
• The Business Software Alliance (BSA)
is a trade group that represents the
world’s largest software and
hardware manufacturers.

• Its mission is to stop the

unauthorized copying of software
produced by its members. BSA is
funded both through dues based on
member companies’ software
revenues and through settlements
from companies that commit piracy.

• BSA membership includes two dozen

or so members such as Adobe, Apple,
Intel, McAfee, Microsoft, Symantec,
and The Math Works
• More than 100 BSA lawyers and investigators
prosecute thousands of cases of software piracy
each year.

• BSA investigations are usually triggered by calls to

the BSA hotline, reports sent to the BSA Web site
(www.nopiracy.org), and referrals from member
companies.

• Many of these cases are reported by disgruntled

employees or former employees.
Failure to cooperate with the BSA can
be extremely expensive.
• The cost of criminal or civil penalties to a corporation and the people
involved can easily be many times more expensive than the cost of
“getting legal” by acquiring the correct number of software licenses.
• Software manufacturers can file a civil suit against software pirates
with penalties of up to $150,000 per copyrighted work.
• The government can criminally prosecute violators and fine them up
to $250,000, incarcerate them for up to five years, or both.

Example:
• In 2012, the Alexander Automotive Group paid $325,000 to settle
claims that it was using unlicensed Microsoft software on its
computers. As part of the settlement agreement with BSA, the firm
deleted all unlicensed copies of software from its computers,
purchased the licenses required to become compliant, and agreed to
implement more effective software management procedures. BSA was
alerted to this situation by a report sent to its Web site
 Trade secret
• A trade secret is information, generally unknown to the public, that
a company has taken strong measures to keep confidential. It
represents something of economic value that has required effort or
cost to develop and that has some degree of uniqueness or novelty.

Example
• Colonel’s secret recipe of 11 herbs and spices used to make the
original KFC chicken, the formula for Coke, and Intel’s
manufacturing process for the i7 quad core processing chip.
• Employers worry that employees may reveal these secrets to
competitors, especially if they leave the company. As a result,
companies often require employees to sign confidentiality
agreements and promise not to reveal the company’s trade secrets.
Supporting the Ethical Practices of
IT Users
The growing use of IT has increased the potential for
new ethical issues and problems; thus, many
organizations have recognized the need to develop
policies that protect against abuses.
Establishing Guidelines for Use of Company Software:-
• Clear rules that govern the use of home computers
and associated software
• Companies negotiate contracts with software
manufacturers and provide PCs and software so that
IT users can work at home.
Defining the Appropriate Use of IT Resources:-
• Companies must develop, communicate, and enforce
written guidelines
• Effective guidelines allow some level of personal use
while prohibiting employees from visiting
objectionable Internet sites
Structuring Information Systems to Protect Data and
Information:-
• Organizations must implement systems and
procedures that limit data access to just those
employees who need it.
• For example, sales managers may have total access to
sales and promotion databases through a company
network, but their access should be limited to
products for which they are responsible.
Installing and Maintaining a Corporate
Firewall:
• A firewall can be configured to serve as an
effective deterrent to unauthorized Web
surfing by blocking access to specific
objectionable Web sites
 Certification and licensing
• Certification indicates that a professional possesses a
particular set of skills, knowledge, or abilities, in the
opinion of the certifying organization.

• Licensing applies only to people and is required by law,

certification can also apply to products (e.g., the Wi-Fi
CERTIFIED logo assures that the product has met rigorous
interoperability testing to ensure that it will work with
other Wi-Fi-certified products) and is generally voluntary.

• IT-related certifications may or may not include a

requirement to adhere to a code of ethics, whereas such a
requirement is standard with licensing.
• Vendor Certifications
Many IT vendors—such as Cisco, IBM, Microsoft, SAP,
and Oracle—offer certification programs for those who
use their products
• Example:- Cisco Certified Internetwork Expert (CCIE)
certification, also require a hands-on lab exam that
demonstrates skills and knowledge
Industry Association Certifications
Government Licensing
• A government license is government-issued
permission to engage in an activity or to operate a
business.

• Countries have enacted legislation to establish

licensing requirements and protect public safety in a
variety of fields
Example :- National Council of Examiners for
Engineering and Surveying (NCEES) has developed a
professional exam for electrical engineers and
computer engineers