Introduction
In the studied scenario, the IT administrator discovers a loophole that allows access to sensitive employee data but does not fix the problem for two weeks. After correcting the error, it became known that several employees reviewed personal data, which should have been protected. This problem has ethical and legal aspects to consider and assess its impact. While ethics are sometimes neglected in business, failure to meet moral principles and obligations can negatively affect the company.
Societal, Organizational, and Individual Ethical Perspectives on the Dilemma
Computing Ethics
Computer technology use, especially in data storage, requires significant protection and compliance with ethical and legal standards. From the perspective of computing ethics, specialists need to consider the consequences of their activities and act to avoid adverse effects (Ladwig & Schwieger, 2020). Moreover, when the company stores data about employees, they can expect that the information will be protected in accordance with their right to privacy. Therefore, the IT administrator must verify the system’s security and solve the problem immediately. In the considered case, the administrator failed to protect data, leading to a privacy violation.
Societal Ethics
The actions of the employees of the company are also determined by other sources of ethics relevant to the case under discussion. Societal ethics includes standards that govern people’s relationships in matters of honesty and justice, and the prevailing customs and values are the roots of these moral standards (Jones & George, 2022). From this perspective, employees who learned about loopholes had to follow ethical norms of justice. In particular, the administrator needed to fix the problem to protect his colleagues, and the employees who viewed the data should not have used the loophole. Therefore, the situation under consideration is unfair from the point of view of social ethics.
Organizational Ethics
Organizational ethics also regulates activities and relations in various companies. It includes beliefs and practices that management applies, considering its responsibility to its stakeholders (Jones & George, 2022). Employees are also stakeholders of the organization, and management must protect their interests. Allowing the loophole to persist and not taking action against the employees who accessed personnel records without authorization, the company may have failed in this duty.
Individual Ethics
Individual ethics is another source of ethics that guides employee behavior. It includes people’s personal values and moral standards, which help them assess responsibility to others amid their interests (Jones & George, 2022). In the case of a loophole, the IT administrator had to correct the problem per their duties and morals. Employees who use loopholes also put their interests above their colleagues, which can lead to distrust. Consequently, organizational and individual ethics are also violated in the situation under study.
Relevant Data Security and Privacy Laws
Unauthorized access to employee information may be a violation of several laws. They depend on the type of organization and its location since there are laws at the federal and state level and regulations applied to certain companies. For example, the Gramm-Leach-Bliley Act applies to financial institutions and requires the protection of private information (Welekwe, 2022). For violation of the law, employees can incur a fine of $10,000, and the company itself – $100,000 (Welekwe, 2022).
Fair and Accurate Credit Transactions Act and The Fair Credit Reporting Act require the protection of a covered account that contains data whose abduction leads to identity theft (Welekwe, 2022). At the state level, the penalty for violation is up to $1000; at the federal level – up to $2,500; and for a class action lawsuit – up to $1,000 for each affected stakeholder (Welekwe, 2022). Following the highlighted laws, failing to protect privacy has significant consequences for the organization.
Reputational and Financial Impacts of Data Breaches on Organizations
In addition to the consequences of law violations, the organization faces financial and reputational risks. Employees whose data could be stolen after learning about the problem and how long it was resolved could lose confidence in the company – such risks can push them to leave the workplace. Moreover, if the problem receives public coverage, the company’s reputation will suffer significantly.
The inability of the organization to ensure timely data protection leads to distrust on the part of all stakeholders – customers, potential employees, and investors. The company may suffer financial losses in profits and current capital due to the need to pay compensation or fines established by law. Consequently, the problem described in the case carries significant reputational and financial risks.
IT Administrator’s Response: Strategies for Addressing Data Security Challenges
Specific recommendations need to be followed in the case of a data breach and malfunction, which leads to it. The IT administrator needs to strengthen the system immediately, find vulnerabilities that led to the breach, fix it, and prevent additional data loss (Federal Trade Commission [FTC], 2021). After fixing the problem, following legal obligations, the administrator needs to notify employees whose information was accessed and make recommendations for protection in the event of data fraud (FTC, 2021). If the breach was caused intentionally or a legal obligation is established in the jurisdiction, the administrator may need to notify law enforcement agencies about the breach (FTC, 2021). Such actions will help reduce the damage caused by the problem and will comply with ethical principles.
Conclusion
Thus, the organization’s failure to protect the personal data of its employees violates ethical principles and established laws. As a result, the company may face significant reputational risks and suffer financial losses. The reason is that without adequately protecting the data of employees, the company loses the stakeholders’ trust and is forced to pay all costs and fines. The IT administrator, in this case, had to follow the official recommendations and protect the data of employees without delaying the solution to the problem.
References
Federal Trade Commission. (2021). Data breach response: A guide for business. Web.
Jones, G. R. & George, J. M. (2022). Contemporary management. McGraw-Hill.
Ladwig, C., & Schwieger, D. (2020). Ethical coding: Privacy, ethics & law in computing. Information Systems Education Journal, 18(2), 50-57. Web.
Welekwe, A. (2022). A guide to the federal and state data privacy laws in the U.S. Comparitech. Web.