Regulatory, Ethical and Compliance Issues in EC
Multiple Choice Questions (Circle the correct answer)
1) Having control over the collection, storage, and dissemination of personal information is included in the category of ____________.
a. property
b. rights
c. duties
d. privacy
2) Due process is a ____________.
a. legal claim that others not interfere with a protected interest
b. set of enforceable rules and regulations
c. guarantee of basic fairness and fair procedures in legal action
d. legal obligation not to interfere with a protected interest
3) A duty is a ____________.
a. legal claim that others not interfere with a protected interest.
b. set of enforceable rules and regulations.
c. guarantee of basic fairness and fair procedures in legal action.
d. legal obligation not to interfere with a protected interest.
4) An online business has the ____________ to prevent spammers or other people from interfering with or harming the benefits (profits) from its EC site and can file lawsuits against them.
a. legal right
b. law statute
c. liability
d. legal obligation
5) Fair use means ____________.
a. that copyrighted material can be used for noncommercial purposes without paying royalties or getting permission
b. that a copyright holder has exclusive rights to the invention for a fixed number of years
c. that the author or creator of a book, movie, or musical composition can use his or her creations for an unlimited number of years
d. that copyrighted material can be digitally protected against misuse
6) EC and Website safeguards to minimize exposure to risk of legal actions include all of the following except:
a. the website clearly posts shipment policies and guarantees.
b. the website clearly articulates procedures for customers to follow when making returns.
c. the company checked backgrounds of customers before shipping any products.
d. the company checked backgrounds before entering agreements with third-party vendors.
7) Corporate Web policy guidelines include all of the following except:
a. issue word-of-mouth acceptable use policies (AUP).
b. make it clear to employees that they cannot use copyrighted or trademarked material without permission.
c. post disclaimers concerning content.
d. have attorneys with cyber law expertise review Web content.
8) Section 5 of the FTC Act does each of the following except:
a. prohibits unfair or deceptive EC practices.
b. gives the FTC authority to take action against companies whose lax security practices could expose customers' financial information to theft or loss.
c. protects privacy.
d. requires monitoring of employees' e-mail.
9) Which of the following statements about the rights to privacy and free speech is not correct?
a. Those rights have an increasingly important role in an information society and to EC.
b. As with all rights, the right of free speech is not unlimited.
c. The Internet has destroyed the right to privacy.
d. Defamation laws put restrictions on what may be freely said or published.
10) The least effective method to protect against pop-up ads and their risk is ____________.
a. pop-up blocking software on users' computers
b. minimizing the pop-up window
c. ISPs using tools that stop pop-ups from appearing
d. Mozilla and Firefox Web browsers preventing pop-ups
Critical Analysis / Case Study Problems
The Critical Analysis questions are designed to help you gain a deeper understanding of the subject matter, develop an increased ability to apply what you have learned and integrate this knowledge into a greater understanding and appreciation for your field of study. Completion of the following questions will help you outline your answers and organize your thoughts within an appropriate framework. These practice questions will not be graded, but you should apply the same analytical skills and writing proficiencies that you will need for the unit essays. We suggest writing your answers on another piece of paper and comparing your results to the suggested answers at the end of this chapter to help you identify any areas you need to review.
1. What does business ethics define?
Assess authentication and biometric controls.
Multiple Choice Questions (Enter your answers on the enclosed answer sheet)
1) Capabilities of the Internet that have made it more difficult for companies to capture profits include all of the following except:
a. the Internet makes information widely available.
b. the Internet reduces the difficulty of purchasing, marketing, and distribution.
c. the Internet allows buyers and sellers to find and transact business with one another more easily.
d. the Internet makes it easier to make secure payments.
2) All of the following are situations when a business plan should be done except:
a. when an existing business is deploying a CRM system.
b. when a new business is seeking start-up funds and other resources.
c. when an existing company is planning to create a separate division.
d. when an existing company is planning to launch the company in a new direction.
3) The most efficient way to expand an organization's scope is _____________.
a. to introduce new products or services into new or existing markets without increasing production facilities or staff.
b. by increasing the size or scale of the business.
c. by expanding the firm's appeal to a new set of customers.
d. to buy a company with complementary products or services.
4) _____________ are the hottest applications in today's business environment.
a. Virtual worlds
b. Rich media
c. Social networking technologies
d. Online brands
5) All of the following determine the degree of collaboration between offline and online activities in a business except:
a. corporate culture.
b. the ability of top management to introduce change properly.
c. the pricing strategy.
d. the use of innovative processes that support collaboration.
6) The ____________ pricing strategy means adding up all the costs involved, such as material, labor, rent, overhead, and so forth and adding a percentage mark-up as profit.
a. cost-plus
b. competitor model
c. revenue markup
d. price percentage
7) Implementing EC often requires significant investments in infrastructure. Therefore, a good way to start is to undertake ____________.
a. a large, non-trivial EC project
b. one or a few small EC pilot projects
c. a multi-divisional EC project
d. a single division EC project
8) A ________ is a form of business alliance composed of several business partners that share the costs and resources for the development or production of a product or service.
a. temporary corporation
b. supply chain
c. virtual corporation
d. co-opetition
9) With the balanced scorecard approach, the term balance arises because the combined set of measures is supposed to encompass indicators that are all of the following except:
a. core and non-core.
b. financial and nonfinancial.
c. leading and lagging.
d. quantitative and qualitative.
10) The relationship between EC investment and organizational performance is _____________.
a. direct
b. indirect
c. shared with other investments
d. not measurable
11) The New York Metropolitan Transit Authority (MTA) did not need to open another airport for almost two decades, even though air traffic had tripled because of productivity gains derived from improved IT systems. IT systems added by the MTA played critical roles in ticket reservations, passenger and luggage check-in, crew assignment and scheduling, runway maintenance and management, and gate assignments. This case illustrates that ___________.
a. intangible benefits can be complex, yet substantial
b. tangible benefits can be complex, yet substantial
c. tangible costs can be high, yet payoffs can be achieved quickly
d. intangible costs can be high, yet payoffs can be achieved quickly
12) Justifying information security projects _____________.
a. is not needed because it is well-known that preventing network security problems is less labor intensive than cleaning up virus infections.
b. is not done because ROI calculators are not available.
c. should focus on defending against external threats such as hackers and malware.
d. should be done because employee security training is usually poorly done.
13) The average-cost curves (AVC) of physical products and digital products are ____________.
a. different because the AVC of digital products declines as quantity increases forming L-shape, while the AVC of physical products is U-shaped.
b. both U-shaped.
c. both L-shaped.
d. different because the AVC of physical products declines as quantity increases forming an L-shape, while the AVC of digital products is U-shaped.
14) All of the following apply to EC in developing economies except:
a. developing economies often face power blackouts and unreliable infrastructure and delivery mechanisms creating limitations that make it difficult for firms to predict whether EC investments will pay off and when.
b. developing economies, such as China and India, represent a significant opportunity for EC to connect businesses to customers, as well as other businesses.
c. developing economies struggle with various issues that create too many business and technology risks to justify investment in those economies at this time.
d. the potential volume of transactions in developed countries can make EC investments more attractive for established firms than new firms because established firms have already recovered the costs of their IT infrastructures.
15) As a company moves to incorporate an online presence with its traditional brick-and-mortar operation, it adds the costs related to training for all personnel in the capabilities of the EC system and a new advertising campaign to announce its new site to the costs directly
associated with building the new Web presence. In this case, training and advertising are examples of ____________.
a. transaction costs
b. complementary investments
c. direct costs
d. indirect costs
16) The greatest difficulty in dealing with venture capital is _____________.
a. the loss of control a venture capitalist demands.
b. finding a willing venture capitalist.
c. finding the money a venture capitalist will require.
d. relocating the business to an incubator.
17) The concept of consistency in Website design includes making sure that _____________.
a. webpages look the same no matter which browser a customer is using.
b. all visitors consistently find what they are looking for.
c. the messages sent to customers who contact the company are consistent.
d. customers are treated consistently when they contact customer service.
18) One of the first decisions to be made in building a Website is _____________.
a. the domain name.
b. whether to provide personalized content.
c. how to protect the Website from hackers.
d. who will host it.
19) Banks are more selective about who gets an account for accepting credit cards online because ______________.
a. dot com failures have made banks less willing to work with online companies
b. CNP transactions are less secure and riskier
c. fees are higher for online processing
d. online transactions do not produce much revenue for banks
20) Before choosing the appropriate Website development option, you need to consider all of the following issues in order to generate a list of requirements and capabilities except:
a. Who are the target customers?
b. What kinds of products or services will the business sell online?
c. Can customers place orders online?
d. What might be the reaction of competitors?
21) Having control over the collection, storage, and dissemination of personal information is included in the category of _____________.
a. property
b. rights
c. duties
d. privacy
22) A music company can file a _____________ against YouTube and MySpace for any interference with the ability to profit from its IP or for profiting from the recording industry's property without authorization and compensation.
a. criminal charge
b. negligence charge
c. nuisance charge
d. lawsuit or civil charge
23) Section 5 of the FTC Act does each of the following except:
a. prohibits unfair or deceptive EC practices.
b. gives the FTC authority to take action against companies whose lax security practices could expose customers' financial information to theft or loss.
c. protects privacy.
d. requires monitoring of employees' e-mail.
24) Companies can improve their responsibility as custodians of customers' personal data by implementing _____________.
a. opt-in and opt-out information practices
b. AUP
c. e-mail monitoring
d. firewalls
25) The _____________ gives law enforcement agencies broader range in their efforts to protect the public.
a. American Civil Liberties Union (ACLU)
b. Electronic Freedom Foundation (EFF)
c. U.S. Department of Justice (DOJ)
d. USA PATRIOT Act
Please answer ONE of the following:
1) Analyze the similarities and differences between laws and ethics.
2) Pinpoint four situations or conditions when separating a company's online operations into a new company makes sense.
3) Assess five methods for evaluating IT investments.