The Future of Business is Transparent.

A Forbes article published a few years ago noted that we are entering an age of “involuntary transparency.” Things that used to be secret within a firm are no longer secret. WikiLeaks began in 2006, and was quickly joined by TradeLeaks, Anonymous, and many similar organizations. Cybersecurity attacks from individuals and countries threaten our privacy and safety. On the human relations side, technology has advanced so that any employee with a USB drive can walk off with megabytes of internal firm records, emails, and memos.

How do we manage and lead in this world?

At UT Arlington’s College of Business, we recognize that transparency in business—voluntary or involuntary—is pivotal. It can save or destroy an organization. Firms must protect their intellectual property, their client information, and their product development data.  Likewise, consumers must protect themselves against malevolent interests.  However, how to accomplish these objectives is a topic that requires research and investment.

The research of two of our faculty members is aimed at helping individuals and firms to protect themselves against cyberattacks.  Dr. Jingguo Wang’s research on phishing (attempting to acquire sensitive information such as usernames, passwords, and credit card details by masquerading as a trustworthy entity in an electronic communication) has the potential to increase our understanding of what makes a firm or individual more or less secure in this world of involuntary transparency.  Dr. M.K. Raja’s research focuses on deterring cyber-crime and the forensic tools of information security. This work similarly identifies strategies that can reduce phishing attempts, but also focuses on identifying and catching the criminals involved.

The future world of involuntary transparency requires firms to promote and adhere to the highest ethical standards.  Instilling strong ethical standards in our students is a fundamental priority at the College of Business. In addition to specialized ethics courses, ethics concepts and issues are addressed broadly in our degree programs.  Dr. Larry Chonko, the Thomas McMahon Professor in Business Ethics, establishes ethics initiatives in the college. “One of the realities of organizational life is the persistent reemergence of many of the same ethical issues,” he says, “this program plants the seeds of ethical decision making, allows them to take root and to flourish as our students enter the professional world.” The College’s Goolsby Leadership Academy provides specialized education to a select group of high-potential junior and senior students with a focus on leadership and ethics.

Faculty and PhD students in the College of Business study ethical attitudes of the current and future business world. Dr. Chonko, along with Associate Professor Doug Grisaffe, and PhD student Rebecca VanMeter recently published an article that explores how business ethics are changing, identifies the ethical ideologies of Generation Y, and analyzes the implications of those ideologies for the workplace of the future.

Beyond cybersecurity and ethics, involuntary transparency has important implications for the decision that firms make between patenting and trying to keep a trade secret.  Dr. Roger Meiners, the Goolsby-E.M. Rosenthal Chair in Economics, analyzes key benefits and shortcomings of patents and trade secrets in his textbook The Legal Environment of Business. “Patents provide strong protection during its lifetime,” Dr. Meiners says. “However, rapid changes in technology may limit the usefulness of patents. Many organizations prefer to protect themselves by requiring commitments of confidentiality from its employees.”  In the future of business, this confidentiality may be more difficult to achieve.

Dr. Meiners further explains that theft of intellectual property is a growing problem. “Firms suffer such losses by hacking as well as through bribery,” he says. “There has been a rise in the number of cases involving paid theft of proprietary information by employees. Judgments against firms, mostly foreign, for theft have run into the hundreds of millions. Patents are easy to steal because they are public information–the theft is by incorporating the use of the technology without a license from the owner. Recently Apple won a billion dollar judgment against Samsung for such theft, although the award is likely to be reduced on appeal.”

Technology is changing the rules of business. It has greatly increased availability of information and spurred new dangers to information security.  Looking into the future of business, these issues will be pivotal to any organizations’ success.

What do you think?  Do you agree? Disagree? Comment and make your thoughts known! In terms of information transparency, security, and ethical conduct, what do you see for the future of business?

RELATED FACULTY ARTICLES

Dr. Wang’s recent articles: “Why do People get Phished? Testing Individual Differences in Phishing Susceptibility Within an Integrated, Information Processing Model” and “Phishing Susceptibility: An Investigation into the Processing of a Targeted Spear Phishing Email

Dr. Raja’s recent papers: “Digital Certificate Management: Optimal Pricing and CRL Releasing Strategies” and “Protection Motivation Theory: A Phishing Expedition

Dr. Chonko, Grisaffe and Ms. VanMeter’s paper: “Generation Y’s Ethical Ideology and Its Potential Workplace Implications

FURTHER INSIGHT

An Interview With WikiLeaks’ Julian Assange.” by Andy Greegberg. Forbes. November 2010.

Intellectual property: Can you keep a secret?” The Economist. March 16, 2013.

Psst…This Is What Your Co-Worker Is Paid.” by Rachel Emma Silverman. The Wall Street Journal. January 29, 2013.

12 Responses to “The Future of Business is Transparent.”


  • This article addresses some very crucial obstacles for future and current business professionals. When is is so easy to “take” or “corrupt” something through involuntary transparency, the issue of it being ethical or not is always evident. The problem is that when students are taught about ethics in classrooms and work lectures, no matter how much it is driven into them, when it becomes so easy to commit these crimes human greed usually takes over. Almost like dangling a suitcase with a million dollars in it, thought it doesn’t belong to you, when the thief offers you the money how likely are you willing to take it? It really depends on how much a person can continue to resist the temptations and pressure and how much their morals impact their overall character.

  • Today, and into the future, business organizations face the dilemma of developing innovative products and services, while relying more heavily on their supply chain to assist with this innovation, and doing so in the face of threats to information security.

    However, this environment should not be feared; rather, it should be embraced because there is an opportunity for a business to gain competitive advantage by demonstrating to its customers a commitment to protect their information. This commitment can manifest itself in the form of systems, policies and employee training established by the business and shared with customers.

    Aside from system or policy implementation, the foundation of any demonstrated commitment to protect customer information is the level of ethical behavior of the firm’s employees. Certainly, it is a challenge for firms to identify ethical behavior in new hire candidates during the interview process. Consequently, candidates who have a solid background of ethics education can stand out in the interview process. This is where UT-Arlington can bring value to its students and showcase its programs to the business community.

    In conclusion, in the age of information transparency, an individual’s commitment to sound ethics can have a self-serving, productive outcome – the individual gives themselves a competitive advantage in the search for employment and they add value to their employer’s effort to sustain a competitive advantage in its marketplace. When students understand the direct correlation between ethical behavior and the value that it brings to an organization, the sustained conduct of sound ethical behavior becomes more likely.

  • During uncertain times, for people to feel comfortable following, a leader needs to be transparent. I’ve noticed that during The Great Recession many leaders in government, education and business chose to hide or say nothing to employees, stockholders and customers instead of simply saying “I don’t know what to do yet”.

  • We face significant challenges when it comes to teaching ethics. One is that there is a constant cacophony of naysayers. You can’t teach ethics, they say. I believe ethics can be taught, but in the context of business decision making. Students must be exposed to business decision making situations and discover the ethical ramifications of those decisions. If they learn to institutionalize ethics as a critical factor in any decision situation, there is hope that better (read: more ethical) decision) will be made.

    A second challenge from the naysayers comes in the form of You can’t change the world. I agree, partly, but none of us should set out seeking to change the world. That, indeed, would be a burden. However, I can influence the corner of the world in which I live. And so can everyone else. So, if more and more of us serve as ethical role models, we can impact many.

    There are many other challenges to teaching ethics. Instead of enumerating them, I’ll close with a challenge to readers. If you like the state of the economy as it is today, then you do not need to be concerned about reading blogs like this. If you do not like the state of the economy, the more of us that seek to take the high road in our actions (as fallible as we are), the greater impact we can have on the decision making capabilities of our young people.

  • I fully agree with these comments about the importance of transparency, ethics and morals. But how do we teach this to students?

    Larry identifies a few methods that we know have worked at UTA (decision-making, providing role-models). Creative readers, what else might we try?

  • As a student there has been several classes that I have taken that have failed to stress the importance of making ethical and moral decisions. This leaves several students not equipped with the necessary tools to appropriatly handle these situations. I would ask many of my classmates the question, what they would like to do after they graduate? Most would say that they just want to make money. Though this is not a bad goal to have, when exposed to ethical situations in the work place, with their main priority being making money it makes me wonder what kind of decisions they would make.
    A business ethics course should be a fundamental required course that all business students are required to take. This course would first help students to be aware that ethical issues do exist in the work place and provide them with guidance as to how to deal with ethical issues.
    In such a transparent business world that we have already began to evolve into, ethics is a key fundamental to the success of this transparent business world.

  • Thanks for your comment Glenroy! I fully agree that ethics needs to be an integral part of our curriculum.

    There are multiple ways to accomplish this goal. One, as you suggest, is to have a dedicated (required) ethics course. That way you “know” that every student is getting it. Critics of this method, however, argue that ethics becomes divorced from the substance of the other courses, and that ethics is best studied in context (e.g. ethics of marketing in the marketing course, ethics of management in the management course, …). This leads to the second model of including an ethics “module” or discussion or some other content in each course (or possibly in each course of the business core).

    What do readers and followers think? Is one of these models better/worse than the other? Should we try one, the other, or a linear combination? Or is there yet another model we should consider?

  • CONTINUOUS AUDITING: AN IDEA WHOSE TIME HAS COME
    The idea of continuous auditing has been around for the last 25 years and much research on it has been done by Miklos Vasarhelyi in Rutgers U. The idea is to have a software agent in the firm’s accounting system that can detect potential failures and report them early enough to enable corrective action.In information systems, continuous monitoring could detect hacking early and mitigate its consequences (cyber-security). In fact it can help in mitigating “failures” of any sort such as for example, crimes. On the other side, it can add value to a business. I am told that there are marketing software agents that travel the internet and identify items relevant to a business and provide the information in a form that they want. Here is a quote from a new venture called Hivefire “Curata, HiveFire’s flagship product, analyzes the web’s relentless rush of content and delivers a spectacularly curated blend of news, multimedia and social media that is easily integrated into a company’s site.”

  • This post is even more relevant in the wake of the Snowden affair. This scandal highlights two aspects of our society’s increasing transparency.

    First, activities that we as individuals consider private (e.g. cell phone calls), are not actually private (at least, the fact that we made the call is transparent, although the content may be private).

    Second, the fact that this information is being collected is now itself transparent. Keeping a secret is getting harder and harder (maybe even impossible). How will we manage (or govern) in this world of involuntary transparency?

  • Dear Rachel,

    I’m glad to see you in this role and congratulate you (belatedly) and UT Austin has definitely made a good choice.

    Transparency is doing a full circle it seems. In the village, most actions were transparent because the community was small and you couldn’t hide in the crowd. Then the community got bigger and hiding became easy. Now, in the global village, hiding is still easy, but, and that’s an important distinction, when there is a need to “find you”, it’s much easier than in the past and it is becoming easier yet. So privacy is maintained and there is not much transparency (unless you post it all on Facebook, of course) but there is latent transparency.

    There are several concept being mixed in the conversation about these issues. Namely, transparency, privacy, anonymity, secrecy, and I might be missing one or few right now. It is, I think, important to make the distinction between those and understand that what people seek might be a varied combination of such. They can be closed and difficult to separate, but they are not always the same.

    Adding to it is “what, whom, when, whey, how” in terms of the actions and those who act. One might not care if an action is not kept private, as long as his/her identity are such. Another might not want either for both. Another might want privacy but would not need secrecy, in the sense that if a need arose, authorized government agencies could look into those actions (because the why is justifiable). Yet another might want full secrecy. And so on.

    As for teaching ethics – teaching ethics is easy. One takes the moral code of a society, codifies it, and voila, it can be taught. What is difficult to teach, and that’s the confusion between the “can be taught and cannot be taught” camps, is morality, in the sense of an internal moral code (hopefully, from societal perspective – one that matches that society’s ethics). My observations are that it is a mixture of nature and nurture – I have seen kids who were, lets say, of a lower moral code, and others who have a very high code from practically birth. Then comes nurture and affects such. When students reach university, it’s difficult to educate them (not teach) to have a strong moral code, especially in University settings (it’s easier in the military for example, but even there you see it – some have, some don’t).

    And your students, as in many US universities and some other places as well, have a very diverse background and may come from different places on the globe, let alone in the US. Therefore, the ethical code they come with is inherently different from each other’s.

    So how would you go about doing something that might be useful?

    I would suggest to start with a “book of ethical principles” your faculty (and I would add staff and student representatives to have higher diversity in views) agrees on as the basis for “a course”. I would then do three things with it:
    1. An ethics course (mandatory) that is discussion based (small groups, position papers, class discussion, etc.).
    2. Points of ethics – issues that pertain to a given field (say finance) and specific situations in that field. Those should be discussed in classes of that field when relevant.

    3. “Field exercises” – you’d have to be creative here, but to create exercises/activities that put students in situations where the ethical points arise. The difficulty is in creating a true situation – not one that is contrived and amounts to a game students play with no real internalization of the game. The key is for them to actually play the game for real.

    And at the end, to remember that the size of reward and punishment and chance of being caught strongly affect not only our behavior but our thinking and views. You may recall that while doing my PhD I came to conduct an experiment in your MBA class at Wharton – on the Prisoners’ Dilemma. What I found, and it happened uniformly – in all the cases and there were enough of them to make it a very strong result, was that as the difference between “cooperate, cooperate” and “defect, defect” (even though the language was completely neutral and it was money only and no losses even) changed, so did the behavior, but more importantly, every time the behavior changed the argument justifying it shifted – from the dominating strategy (or half of it) one to a “magical” one in which one’s action affect the other party’s action, even though they have not met, will never do so, and have no idea about each other.

    So it is with ethics and you can see it beautifully with little kids: views, thoughts, and arguments made change according to the desire to justify a certain action. And that is, combined with the nature & nurture issue, why it takes long training to teach ethics (monasteries, military) and difficult to do in a university settings.

    Warm regards,
    Moti

  • Check out a recent article on life-logging in the Economist. The ultimate in voluntary (rather than involuntary) transparency.

    http://www.economist.com/news/briefing/21589863-it-getting-ever-easier-record-anything-or-everything-you-see-opens

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