case study question
2- Describe an effective e-mail and Web use policy for a company.
3- Should managers inform employees that their Web behavior is being monitored? Or should managers monitor secretly? Why or why not?
READING:
Interactive Session: Organizations The Battle Over Net Neutrality
What kind of Internet user are you? Do you primarily use the Net to do a little e-mail and online banking? Or are you online all day, watching YouTube videos, downloading music files, or playing online games? Do you use your iPhone to stream TV shows and movies on a regular basis? If you’re a power Internet or smartphone user, you are consuming a great deal of bandwidth. Could hundreds of millions of people like you start to slow the Internet down? Video streaming on Netflix accounts for 32 percent of all bandwidth use in the United States, and Google’s YouTube for 19 percent of Web traffic at peak hours. If user demand overwhelms network capacity, the Internet might not come to a screeching halt, but users could face sluggish download speeds and video transmission. Heavy use of iPhones in urban areas such as New York and San Francisco has already degraded service on the AT&T wireless network. AT&T reported that 3 percent of its subscriber base accounted for 40 percent of its data traffic. Internet service providers (ISPs) assert that network congestion is a serious problem and that expanding their networks would require passing on burdensome costs to consumers. These companies believe differential pricing methods, which include data caps and metered use—charging based on the amount of bandwidth consumed—are the fairest way to finance necessary investments in their network infrastructures. But metering Internet use is not widely accepted, because of an ongoing debate about net neutrality. Net neutrality is the idea that Internet service providers must allow customers equal access to content and applications, regardless of the source or nature of the content. Presently, the Internet is neutral: all Internet traffic is treated equally on a first-come, first-served basis by Internet backbone owners. However, this arrangement prevents telecommunications and cable companies from charging differentiated prices based on the amount of bandwidth consumed by the content being delivered over the Internet. The strange alliance of net neutrality advocates includes MoveOn.org; the Christian Coalition; the American Library Association; data-intensive Web businesses such as Netflix, Amazon, and Google; major consumer groups; and a host of bloggers and small businesses. Net neutrality advocates argue that differentiated pricing would impose heavy costs on heavy bandwidth users such as YouTube, Skype, and other innovative services, preventing high-bandwidth startup companies from gaining traction. Net neutrality supporters also argue that without net neutrality, ISPs that are also cable companies, such as Comcast, might block online streaming video from Netflix or Hulu in order to force customers to use the cable company’s on-demand movie rental services. Network owners believe regulation to enforce net neutrality will impede U.S. competitiveness by discouraging capital expenditure for new networks and curbing their networks’ ability to cope with the exploding demand for Internet and wireless traffic. U.S. Internet service lags behind many other nations in overall speed, cost, and quality of service, adding credibility to this argument. And with enough options for Internet access, dissatisfied consumers could simply switch to providers who enforce net neutrality and allow unlimited Internet use. The wireless industry had been largely exempted from net neutrality rules, because the government determined it was a less mature network and companies should be allowed more freedom to manage traffic. Wireless providers already have tiered plans that charge heavy bandwidth users larger service fees. A December 2012 report by the non-profit, nonpartisan, public policy institute, New America Foundation (NAF), disputes these claims. Like personal computers, the processing capacity of the routers and switches in wired broadband networks has vastly expanded while the price has declined. Although total U.S. Internet data consumption rose 120% in 2012, the cost to transport the data decreased at a faster pace. The net cost to carriers was at worst flat and for the most part, down. The NAF report further asserts that lack of competition has enabled wired broadband carriers to charge higher rates, institute data caps, and spend less on the capital expenditures needed to upgrade and maintain their networks than they have in the past. The courts have maintained that the Federal Communications Commission (FCC) has no authority to dictate how the Internet operates. The Communications Act of 1996 forbids the agency from managing the Internet as a “common carrier,” the regulatory approach the commission took toward telephones, and the FCC itself decided not to classify broadband as a telecommunications service. On January 14, 2014, the U.S. Court of Appeals for the District of Columbia struck down the FCC’s “Open Internet” rules that required equal treatment of Internet traffic and prevented broadband providers from blocking traffic favoring certain sites or charging special fees to companies that account for the most traffic. The court said the FCC saddled broadband providers with the same sorts of obligations as traditional “common carrier” telecommunications services, such as landline phone systems, even though the commission had explicitly decided not to classify broadband as a telecommunications service. On April 24, 2014, the FCC announced that it would propose new rules that allow companies like Disney, Google or Netflix to pay Internet service providers like Comcast and Verizon for special, faster lanes to send video and other content to their customers. Broadband providers would have to disclose how they treat all Internet traffic and on what terms they offer more rapid lanes, and would be required to act in a “commercially reasonable man ner.” Providers would not be allowed to block Web sites. The proposed rules would also require Internet service providers to disclose whether, in assigning faster lanes, they had favored their affiliated companies that provide content. Nevertheless, the FCC continues to push for an open Internet. On April 30, 2014, FCC chairman Tom Wheeler announced that lack of competition has hurt consumers, and that the FCC planned to write tough new rules to enforce net neutrality. Sources: “Should the U.S. Regulate Broadband Internet Access as a Utility?” Wall Street Journal, May 11, 2014; Edward Wyatt, “Stern Talk From Chief of F.C.C. on Open Net,” New York Times, April 30, 2014 and “F.C.C., in a Shift, Backs Fast Lane for Web Traffic,” New York Times, April 24, 2014; Amol Sharma, “Netflix, YouTube Could Feel Effects of ‘Open Internet’ Ruling,” Wall Street Journal, January 14, 2014; Gautham Nagesh, “FCC to Propose New ‘Net Neutrality’ Rules,” Wall Street Journal, April 23, 2014; Shira Ovide, “Moving Beyond the Net Neutrality Debate,” Wall Street Journal, January 14, 2014; Gautham Nagesh and Amol Sharma, “Court Tosses Rules of Road for Internet,” Wall Street Journal, January 4, 2014; UpdAlina Selyukh,” S. Court to Hear Oral Arguments in Net Neutrality Case on September 9,” Reuters, June 25, 2013; and Hibah Hussain, Danielle Kehl, Benjamin Lennett, and Patrick Lucey, “Capping the Nation’s Broadband Future? Dwindling Competition Is Fueling the Rise of Increasingly Costly and Restrictive Internet Usage Caps,” New America Foundation, December 17, 2012. Case Study Questions What is net neutrality? Why has the Internet operated under net neutrality up to this point in time? Who’s in favor of net neutrality? Who’s opposed? Why? What would be the impact on individual users, businesses, and government if Internet providers switched to a tiered service model for transmission over land lines as well as wireless? It has been said that net neutrality is the most important issue facing the Internet since the advent of the Internet. Discuss the implications of this statement. Are you in favor of legislation enforcing network neutrality? Why or why not? The Future Internet: IPv6 and Internet2 The Internet was not originally designed to handle the transmission of massive quantities of data and billions of users. Because of sheer Internet population growth, the world is about to run out of available IP addresses using the old addressing convention. The old addressing system is being replaced by a new version of the IP addressing schema called IPv6 (Internet Protocol version 6), which contains 128-bit addresses (2 to the power of 128), or more than a quadrillion possible unique addresses. IPv6 is not compatible with the existing Internet addressing system, so the transition to the new standard will take years. Internet2 is an advanced networking consortium representing over 350 U.S. universities, private businesses, and government agencies working with 66,000 institutions across the United States and international networking partners from more than 100 countries. To connect these communities, Internet2 developed a high-capacity 100 Gbps network that serves as a testbed for leading-edge technologies that may eventually migrate to the public Internet, including telemedicine, distance learning, and other advanced applications not possible with consumer-grade Internet services. The fourth generation of this network is being rolled out to provide 8.8 terabits of capacity. Internet Services and Communication Tools The Internet is based on client/server technology. Individuals using the Internet control what they do through client applications on their computers, such as Web browser software. The data, including e-mail messages and Web pages, are stored on servers. A client uses the Internet to request information from a particular Web server on a distant computer, and the server sends the requested information back to the client over the Internet. Chapters 5 and 6 describe how Web servers work with application servers and database servers to access information from an organization’s internal information systems applications and their associated databases. Client platforms today include not only PCs and other computers but also smartphones and tablets. Internet Services A client computer connecting to the Internet has access to a variety of services. These services include e-mail, chatting and instant messaging, electronic discussion groups, Telnet, File Transfer Protocol (FTP), and the Web. Table 7.3 provides a brief description of these services. Each Internet service is implemented by one or more software programs. All of the services may run on a single server computer, or different services may be allocated to different machines. Figure 7.8 illustrates one way that these services can be arranged in a multitiered client/server architecture. E-mail enables messages to be exchanged from computer to computer, with capabilities for routing messages to multiple recipients, forwarding messages, and attaching text documents or multimedia files to messages. Most e-mail today is sent through the Internet. The cost of e-mail is far lower than equivalent voice, postal, or overnight delivery costs, and e-mail messages arrive anywhere in the world in a matter of seconds. Nearly 90 percent of U.S. workplaces have employees communicating interactively using chat or instant messaging tools. Chatting enables two or more people who are simultaneously connected to the Internet to hold live, interactive conversations. Chat systems now support voice and video chat as well as written conversations. Many online retail businesses offer chat services on their Web sites to attract visitors, to encourage repeat purchases, and to improve customer service. Table 7.3 Major Internet Services Capability Functions Supported E-mail Person-to-person messaging; document sharing Chatting and instant messaging Interactive conversations Newsgroups Discussion groups on electronic bulletin boards Telnet Logging on to one computer system and doing work on another File Transfer Protocol (FTP) Transferring files from computer to computer World Wide Web Retrieving, formatting, and displaying information (including text, audio, graphics, and video) using hypertext links Instant messaging is a type of chat service that enables participants to create their own private chat channels. The instant messaging system alerts the user whenever someone on his or her private list is online so that the user can initiate a chat session with other individuals. Instant messaging systems for consumers include Yahoo! Messenger, Google Talk, AOL Instant Messenger, and Facebook Chat. Companies concerned with security use proprietary communications and messaging systems such as IBM Sametime. Newsgroups are worldwide discussion groups posted on Internet electronic bulletin boards on which people share information and ideas on a defined topic, such as radiology or rock bands. Anyone can post messages on these bulletin boards for others to read. Many thousands of groups exist that discuss almost all conceivable topics. Figure 7.8 Client/Server Computing on the Internet Client computers running Web browsers and other software can access an array of services on servers over the Internet. These services may all run on a single server or on multiple specialized servers. Employee use of e-mail, instant messaging, and the Internet is supposed to increase worker productivity, but the accompanying Interactive Session on Management shows that this may not always be the case. Many company managers now believe they need to monitor and even regulate their employees’ online activity. But is this ethical? Although there are some strong business reasons why companies may need to monitor their employees’ e-mail and Web activities, what does this mean for employee privacy? Voice over IP The Internet has also become a popular platform for voice transmission and corporate networking. Voice over IP (VoIP) technology delivers voice information in digital form using packet switching, avoiding the tolls charged by local and long-distance telephone networks (see Figure 7.9). Calls that would ordinarily be transmitted over public telephone networks travel over the corporate network based on the Internet Protocol, or the public Internet. Voice calls can be made and received with a computer equipped with a microphone and speakers or with a VoIP-enabled telephone. Figure 7.9 How Voice over IP Works A VoIP phone call digitizes and breaks up a voice message into data packets that may travel along different routes before being reassembled at the final destination. A processor nearest the call’s destination, called a gateway, arranges the packets in the proper order and directs them to the telephone number of the receiver or the IP address of the receiving computer. Cable firms such as Time Warner and Cablevision provide VoIP service bundled with their high-speed Internet and cable offerings. Skype offers free VoIP worldwide using a peer-to-peer network, and Google has its own free VoIP service. Although there are up-front investments required for an IP phone system, VoIP can reduce communication and network management costs by 20 to 30 percent. For example, VoIP saves Virgin Entertainment Group $700,000 per year in long-distance bills. In addition to lowering long-distance costs and eliminating monthly fees for private lines, an IP network provides a single voice-data infrastructure for both telecommunications and computing services. Companies no longer have to maintain separate networks or provide support services and personnel for each different type of network. Unified Communications In the past, each of the firm’s networks for wired and wireless data, voice communications, and videoconferencing operated independently of each other and had to be managed separately by the information systems department. Now, however, firms are able to merge disparate communications modes into a single universally accessible service using unified communications technology. Unified communications integrates disparate channels for voice communications, data communications, instant messaging, e-mail, and electronic conferencing into a single experience where users can seamlessly switch back and forth between different communication modes. Presence technology shows whether a person is available to receive a call. Companies will need to examine how work flows and business processes will be altered by this technology in order to gauge its value. Interactive Session: Management Monitoring Employees on Networks: Unethical or Good Business? The Internet has become an extremely valuable business tool, but it’s also a huge distraction for workers on the job. Employees are wasting valuable company time by surfing inappropriate Web sites (Facebook, shopping, sports, etc.), sending and receiving personal email, talking to friends via online chat, and downloading videos and music. According to IT research firm Gartner Inc., non-work-related Internet surfing results in an estimated 40% productivity loss each year for American businesses. A recent Gallup Poll found that the average employee spends over 75 minutes per day using office computers for non-business related activity. That translates into an annual loss of $6,250 per year, per employee. An average mid-size company of 500 employees could be expected to lose $3.25 million in lost productivity due to Internet misuse. Many companies have begun monitoring employee use of e-mail and the Internet, sometimes without their knowledge. Many tools are now available for this purpose, including SONAR, Spector CNE Investigator, iSafe, OsMonitor, IMonitor, Work Examiner, Net Spy, Activity Monitor, Mobistealth, and Spytech. These products enable companies to record online searches, monitor file downloads and uploads, record keystrokes, keep tabs on emails, create transcripts of chats, or take certain screenshots of images displayed on computer screens. Instant messaging, text messaging, and social media monitoring are also increasing. Although U.S. companies have the legal right to monitor employee Internet and e-mail activity while they are at work, is such monitoring unethical, or is it simply good business? Managers worry about the loss of time and employee productivity when employees are focusing on personal rather than company business. Too much time on personal business translates into lost revenue. Some employees may even be billing time they spend pursuing personal interests online to clients, thus overcharging them. If personal traffic on company networks is too high, it can also clog the company’s network so that legitimate business work cannot be performed. Procter & Gamble (P&G) found that on an average day, employees were listening to 4,000 hours of music on Pandora and viewing 50,000 five-minute YouTube videos. These activities involved streaming huge quantities of data, which slowed down P&G’s Internet connection. When employees use e-mail or the Web (including social networks) at employer facilities or with employer equipment, anything they do, including anything illegal, carries the company’s name. Therefore, the employer can be traced and held liable. Management in many firms fear that racist, sexually explicit, or other potentially offensive material accessed or traded by their employees could result in adverse publicity and even lawsuits for the firm. An estimated 27 percent of Fortune 500 organizations have had to defend themselves against claims of sexual harassment stemming from inappropriate email. Even if the company is found not to be liable, responding to lawsuits could run up huge legal bills. Symantec’s 2011 Social Media Protection Flash Poll found that the average litigation cost for companies with social media incidents ran over $650,000. Companies also fear leakage of confidential information and trade secrets through e-mail or social networks. Another survey conducted by the American Management Association and the ePolicy Institute found that 14 percent of the employees polled admitted they had sent confidential or potentially embarrassing company e-mails to outsiders. U.S. companies have the legal right to monitor what employees are doing with company equipment during business hours. The question is whether electronic surveillance is an appropriate tool for maintaining an efficient and positive workplace. Some companies try to ban all personal activities on corporate networks—zero tolerance. Others block employee access to specific Web sites or social sites, closely monitor e-mail messages, or limit personal time on the Web. For example, P&G blocks Netflix and has asked employees to limit their use of Pandora. It still allows some YouTube viewing, and is not blocking access to social networking sites because staff use them for digital marketing campaigns. Ajax Boiler in Santa Ana, California, uses software from SpectorSoft Corporation that records all the Web sites employees visit, time spent at each site, and all e-mails sent. Financial services and investment firm Wedbush Securities monitors the daily e-mails, instant messaging, and social networking activity of its 1,000-plus employees. The firm’s e-mail monitoring software flags certain types of messages and keywords within messages for further investigation. A number of firms have fired employees who have stepped out of bounds. A Proofpoint survey found that one in five large U.S. companies fired an employee for violating e-mail policies in the past year. Among managers who fired employees for Internet misuse, the majority did so because the employees’ e-mail contained sensitive, confidential, or embarrassing information. No solution is problem-free, but many consultants believe companies should write corporate policies on employee e-mail, social media, and Web use. The policies should include explicit ground rules that state, by position or level, under what circumstances employees can use company facilities for e-mail, blogging, or Web surfing. The policies should also inform employees whether these activities are monitored and explain why. IBM now has “social computing guidelines” that cover employee activity on sites such as Facebook and Twitter. The guidelines urge employees not to conceal their identities, to remember that they are personally responsible for what they publish, and to refrain from discussing controversial topics that are not related to their IBM role. The rules should be tailored to specific business needs and organizational cultures. For example, investment firms will need to allow many of their employees access to other investment sites. A company dependent on widespread information sharing, innovation, and independence could very well find that monitoring creates more problems than it solves. Sources: “Should Companies Monitor Their Employees’ Social Media?” Wall Street Journal, May 11, 2014; Rhodri Marsden, “Workplace monitoring mania may be risky business,” Brisbane Times, March 30, 2014; Donna Iadipaolo, “Invading Your Privacy Is Now the Norm in the Workplace,” Philly.com, April 28, 2014; “Office Slacker Stats,” www.staffmonitoring.com, accessed May 1, 2014; “Office Productivity Loss,” Staffmonitoring.com, accessed May 1, 2014; “Workplace Privacy and Employee Monitoring,” Privacy Rights Clearinghouse, June 2013; Samuel Greengard, “How Smartphone Addiction Hurts Productivity,” CIO Insight, March 11, 2013; Emily Glazer, “P&G Curbs Employees’ Internet Use,” The Wall Street Journal, April 4, 2012; and David L. Barron, “Social Media: Frontier for Employee Disputes,” Baseline, January 19, 2012. Case Study Questions Should managers monitor employee e-mail and Internet usage? Why or why not? Describe an effective e-mail and Web use policy for a company. Should managers inform employees that their Web behavior is being monitored? Or should managers monitor secretly? Why or why not? CenterPoint Properties, a major Chicago area industrial real estate company, used unified communications technology to create collaborative Web sites for each of its real estate deals. Each Web site provides a single point for accessing structured and unstructured data. Integrated presence technology lets team members e-mail, instant message, call, or videoconference with one click. Virtual Private Networks What if you had a marketing group charged with developing new products and services for your firm with members spread across the United States? You would want them to be able to e-mail each other and communicate with the home office without any chance that outsiders could intercept the communications. In the past, one answer to this problem was to work with large private networking firms who offered secure, private, dedicated networks to customers. But this was an expensive solution. A much less-expensive solution is to create a virtual private network within the public Internet. A virtual private network (VPN) is a secure, encrypted, private network that has been configured within a public network to take advantage of the economies of scale and management facilities of large networks, such as the Internet (see Figure 7.10). A VPN provides your firm with secure, encrypted communications at a much lower cost than the same capabilities offered by traditional non-Internet providers who use their private networks to secure communications. VPNs also provide a network infrastructure for combining voice and data networks. Figure 7.10 A Virtual Private Network Using the Internet This VPN is a private network of computers linked using a secure “tunnel” connection over the Internet. It protects data transmitted over the public Internet by encoding the data and “wrapping” them within the Internet Protocol (IP). By adding a wrapper around a network message to hide its content, organizations can create a private connection that travels through the public Internet. Several competing protocols are used to protect data transmitted over the public Internet, including Point-to-Point Tunneling Protocol (PPTP). In a process called tunneling, packets of data are encrypted and wrapped inside IP packets. By adding this wrapper around a network message to hide its content, business firms create a private connection that travels through the public Internet. The Web The Web is the most popular Internet service. It’s a system with universally accepted standards for storing, retrieving, formatting, and displaying information using a client/server architecture. Web pages are formatted using hypertext with embedded links that connect documents to one another and that also link pages to other objects, such as sound, video, or animation files. When you click a graphic and a video clip plays, you have clicked a hyperlink. A typical Web site is a collection of Web pages linked to a home page. Hypertext Web pages are based on a standard Hypertext Markup Language (HTML), which formats documents and incorporates dynamic links to other documents and pictures stored in the same or remote computers (see Chapter 5). Web pages are accessible through the Internet because Web browser software operating your computer can request Web pages stored on an Internet host server using the Hypertext Transfer Protocol (HTTP). HTTP is the communications standard used to transfer pages on the Web. For example, when you type a Web address in your browser, such as http://www.sec.gov, your browser sends an HTTP request to the sec.gov server requesting the home page of sec.gov. HTTP is the first set of letters at the start of every Web address, followed by the domain name, which specifies the organization’s server computer that is storing the document. Most companies have a domain name that is the same as or closely related to their official corporate name. The directory path and document name are two more pieces of information within the Web address that help the browser track down the requested page. Together, the address is called a uniform resource locator (URL). When typed into a browser, a URL tells the browser software exactly where to look for the information. For example, in the URL http://www.megacorp.com/
Solution Preview
Internet in the Workplace
Question One
The increase in independence on the internet and technology in the workplace has opened up a new communication challenge for most employees within organizational settings. Management teams in contemporary society now need to not only be wary of the potential loss of information to cases of disasters in the workplace environment, but also potential unauthorized access to the company databases through the internet network (Jamaluddin, Ahmad, Alias, & Simun, 2015). Given the necessity for extensive security over some of the information stored on the organization’s database, some employers go to the extent of monitoring the employees’ internet activities as a means of protecting the company data from potentially dangerous sites.
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