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94 Part 1 • Introduction
::::::: Technology and the Manager’s Job :::::::
THE ETHICS OF DATA ANAlyTICS

Every time you click on anything in Facebook or do a search in be analyzed by highly sophisticated data processing, should we?
Google or purchase anything on Amazon or post anything on And should organizations (managers) be using it? When it was
Instagram, data is being collected about you. Technology has discovered that Facebook had manipulated news feeds either posi-
evolved to the point where companies can capture data about tively or negatively of more than half a million randomly selected
consumer habits anytime they access a Web site, post on social users to see how emotions spread on social media, people were
media, do a search, or purchase something online. But it’s not just outraged. But Facebook isn’t the only one that manipulates and
on external Web sites that data is being collected and analyzed. analyzes user data. Google, Yahoo, Amazon, and others also
A recent article in the Wall Street Journal discussed how certain manipulate and analyze this data, all under the guise of “improving
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companies have been analyzing a wide variety of data points on the user experience.” The technology of data analytics itself is
employees to try to pinpoint who is likely to leave the organiza- ethics-free; it’s neither good nor bad. But it’s in how the technology
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tion. Since employee turnover costs money and time, companies is used that ethical concerns can arise.
want to try to get an early handle on it so managers can take If your professor has assigned this, go to the Assignments section
action before an employee—and especially a good employee— of mymanagementlab.com to complete these discussion
decides to leave. questions.
Statisticians and data scientists have expressed misgivings
TAlk AbOuT IT 3: What does it mean that the technology of
about the lack of ethical guidelines for big data research and data analytics is ethics-free?
analytics, especially online. Just because we have the technology
to collect these vast amounts of quantifiable information that can TAlk AbOuT IT 4: How could managers ethically use big data?

If managers are serious about encouraging ethical
behaviors, there are a number of things they can do.

Like what? Hire employees with high ethical standards, establish codes of ethics,
lead by example, link job goals and performance appraisal, provide ethics training,
and implement protective mechanisms for employees who face ethical dilemmas. By
themselves, such actions won’t have much of an impact. But if an organization has a com-
prehensive ethics program in place, it can potentially improve an organization’s ethical
climate. The key variable, however, is potentially. A well-designed ethics program does
not guarantee the desired outcome. Sometimes corporate ethics programs are mostly public
relations gestures that do little to influence managers and employees. For instance, even
Enron, often thought of as the “poster child” of corporate wrongdoing, outlined values in
its final annual report that most would consider ethical—communication, respect, integrity,
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and excellence. Yet the way top managers behaved didn’t reflect those values at all. We
want to look at three ways that managers can encourage ethical behavior and create a com-
prehensive ethics program.

CoDes of etHICs. Codes of ethics are popular tools for attempting to reduce employee
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ambiguity about what’s ethical and what’s not. A code of ethics is a formal document
that states an organization’s primary values and the ethical rules it expects managers and
nonmanagerial employees to follow. Ideally, these codes should be specific enough to
guide organizational members in what they’re supposed to do yet loose enough to allow
for freedom of judgment. Research shows that 97 percent of organizations with more than
code of ethics 10,000 employees have written codes of ethics. Even in smaller organizations, nearly 93
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A formal document that states an organization’s percent have them. And codes of ethics are becoming more popular globally. Research
primary values and the ethical rules it expects by the Institute for Global Ethics says that shared values such as honesty, fairness, respect,
managers and nonmanagerial employees to follow 40
responsibility, and caring are embraced worldwide.