Manajemen | Fakultas Ekonomi Universitas Maritim Raja Ali Haji 08832320209599075
Journal of Education for Business
ISSN: 0883-2323 (Print) 1940-3356 (Online) Journal homepage: http://www.tandfonline.com/loi/vjeb20
The Need for Continuing Education on Rapidly
Changing Business Issues: Internet Privacy as a
Telling Example
Carl S. Bozman & Kathy L. Pettit-o'malley
To cite this article: Carl S. Bozman & Kathy L. Pettit-o'malley (2002) The Need for Continuing
Education on Rapidly Changing Business Issues: Internet Privacy as a Telling Example, Journal
of Education for Business, 77:4, 219-225, DOI: 10.1080/08832320209599075
To link to this article: http://dx.doi.org/10.1080/08832320209599075
Published online: 31 Mar 2010.
Submit your article to this journal
Article views: 14
View related articles
Citing articles: 1 View citing articles
Full Terms & Conditions of access and use can be found at
http://www.tandfonline.com/action/journalInformation?journalCode=vjeb20
Download by: [Universitas Maritim Raja Ali Haji]
Date: 13 January 2016, At: 00:24
Downloaded by [Universitas Maritim Raja Ali Haji] at 00:24 13 January 2016
The Need for Continuing Education
on Rapidly Changing
Business Issues: Internet Privacy
as aTelling Example
CARL S. BOZMAN
Gonzaga University
Spokane, Washington
I
nternet privacy issues occur across
business functional areas and may
inhibit the success of any organization
engaged in exchange activities. Trust in
the rapidly evolving electronic marketplace is a critical component in the viability of firms that rely on Internet features to create value. For example,
consumer surveys indicate that a significant number of people either refuse to
go online or are limiting their online
activities because of a perceived lack of
privacy (Green, 1998; Lenhart, 2000).
In addition, frequent Internet users are
prone to provide false information or
subvert data-gathering attempts altogether because they lack confidence in
Web site privacy (Fox, 2000; “Privacy
and American Business,” 1997).
Consumer concerns regarding Internet privacy are not without merit. Information technology has created an
unprecedented revolution in the ability
to systematically acquire and disseminate consumer data (Blattberg, Glazer,
& Little, 1994). Individual consumption
behavior can be easily tracked, profiled,
and shared among diverse users. People
are becoming increasingly aware that
they lack any measure of anonymity in
Web-based activities (Horrigan, 2000).
It is not too surprising, then, that any
zyxwvuts
zyx
KATHY L. PETTIT-O’MALLEY
University of Idaho
Moscow, Idaho
ABSTRACT. Business educators
often must teach topics that are changing rapidly or that extend well beyond
their specialty training. Thus, it is critical that faculty perceptions of knowledge correspond with objective measures of faculty knowledge. In this
study, the authors examined the consistency between faculty members’
perceived and actual knowledge about
a specialty topic in a rapidly evolving
area: Internet privacy. The authors also
investigated faculty perceptions
regarding the importance of different
dimensions of Internet privacy. Their
results suggest that, although some
important issues are being addressed
adequately, others are being overlooked because of a lack of accurate
information and faculty preparation
and training.
discussion of Internet privacy often
results in calls for government regulation. These requests are being made
more frequently and forcefully. The
Federal Trade Commission (FTC) has,
in particular, identified Internet privacy
as a major issue that must be addressed
on a priority basis (Federal Trade Commission, 199813; Miyazaki & Fernandez,
2000). In the past, the FTC promulgated
what it describes as five fair information
practices designed to govern Internet
privacy in concert with, as well as in the
absence of, explicit regulation. Con-
sumers should receive notice of a firm’s
information practices, have a choice
regarding subsequent uses of their information, have the ability to access information collected about them, have reasonable security of their personal
information, and have enforcement
measures available that are designed to
ensure organizations’ adherence to fair
information practices.
The Internet became the fastest growing form of information distribution in
history-in
part because it is largely
unregulated (Kennard, 1999). Any failure to voluntarily adhere to the FTC’s
fair information guidelines will ensure
that calls for mandatory regulation
become more vocal and more likely to
be heeded. The long-term commercial
success of the Internet may therefore
depend on how well businesses can
instill consumer trust in this largely
unregulated medium. Today, however,
many consumers have reason to lack
confidence in the World Wide Web
(Culnan, 2000). For example, in one of
Culnan’s samples, less than 14% of the
Web sites had any form of comprehensive privacy disclosure.
The ability to acquire and retain customers will also determine the success
or failure of an individual organization
zyxwvuts
zy
MarcWApril2002
219
Downloaded by [Universitas Maritim Raja Ali Haji] at 00:24 13 January 2016
engaged in Internet activity (Reichheld,
1993). Managing the customer relationship in an interactive environment is particularly challenging for electronic business ventures. A competitor’s Web site is
just a mouse click away. As a consequence, consumer trust is a fundamental
prerequisite needed for the achievement
and preservation of competitiveness
within this distribution channel.
Are business schools preparing students to effectively create consumer
trust and deal with other related Internet
privacy issues? This is a nontrivial question. Global electronic commerce has
been forecast to exceed 6.7 trillion dollars by 2004 (Sanders & Temkin, 2000).
In the United States alone, electronic
commerce is expected to account for
over 13% of the gross domestic product
in 2004. Firms that do not enjoy the trust
of consumers are unlikely to participate
in the growth of sales through this distribution channel. Perhaps more important,
industry’s disregard for consumer privacy is likely to lead to government regulation that could impede the development of Internet commerce altogether.
In this study, we examined business
faculty concerns over ethical issues
related to Internet privacy. We also
explored the extent to which business
faculty members are addressing Internet
privacy issues in the classroom. Our
results show somewhat ubiquitous and
homogeneous concern regarding Internet privacy issues. Our analyses also
demonstrate inconsistency among faculty perceptions of Internet privacy standards as they exist today, as well as
among the types of faculty members
most likely to incorporate Internet privacy materials in the classroom. Finally,
we conclude with a discussion of what
faculty and administrators can do to
enhance the quality of classroom presentation of rapidly changing business
topics, including Internet privacy.
relationships may be based as much on
trust as on any product benefits received.
Previous research has shown that consumers only distinguish between two
Internet privacy dimensions: (a) the
extent to which an individual has control
over his or her personal information and
(b) his or her awareness of personal
information gathered as a consequence
of Web-based activities (Foxman & Kilcoyne, 1993; Milne, 2000).
From a consumer’s perspective,
whenever a computer is logged onto the
Internet, Internet privacy and consumer
trust can be compromised. In the following discussion, we identify just two
ways in which privacy violations may
occur and illustrate how pervasive Internet privacy issues are likely to become.
Personal information is frequently
captured without the knowledge of consumers. Internet sites collect data on
everything from the consumer’s type of
browser and computer hardware to the
time that he or she spends on a Web page
and other Web sites. Web sites often
leave files called cookies on a user’s
computer. These files can identify consumers when they return to the site as
well as provide a great deal of information without the consumer’s knowledge.
For example, DoubleClick has merged
cookies to provide complex descriptions
of people’s online behavior (Baig,
Stepanek, & Gross, 1999) and RealNetworks has used music software to transmit the specific content that each customer has listened to and has matched
these data with personally identifiable
information (Quittner, 1999).
Many Web sites also explicitly
request personal information (e.g., visitor registration, warranty data, consumer surveys). Whether these Internet
sites provide an adequate disclosure of
how this information may be used is
another issue. Toysmart, for instance,
promised consumers that any information that they provided would never be
made available to another business entity without their permission. Recently,
however, Toysmart was allowed to sell
its customer database over the objections of 39 state attorneys general
(Richtel, 2000). The costs of unsolicited marketing contacts, for the consumer, after this information has been
sold and/or provided to affiliated com-
panies, are not inconsequential (Petty
2000).
We expect that most business faculty
members are generally aware of Internet
privacy issues and concerned about
related ethical dilemmas posed by business activities on the Internet. However,
the ethical framework that they use to
distinguish Internet privacy issues may
be quite different from the framework
used by consumers. Business faculty
members, for example, are expected to
gravitate toward a utilitarian model of
decision making (Laczniak & Murphy,
1993). In this circumstance, the incremental costs that an individual bears for
the sale of his or her information or its
use for undisclosed purposes are likely
to be regarded as less consequential than
the benefits conferred by market development activities. On the other hand,
consumers who have had their information used in unauthorized ways are not
likely to feel the same way. They often
find it increasingly difficult to establish
such bonds of trust subsequently.
Because of the relative newness and
rapid pace of change in e-commerce,
business faculty knowledge of Internet
privacy issues is likely to be limited in
scope and prone to error. After all, the
Internet phenomenon is still evolving,
and the relevant range of privacy issues is
a subject of ongoing debate. But there is
legislation as well as government guidelines regarding Internet privacy, and business faculty members should be aware of
this. Specifically, the Children’s Online
Privacy Protection Act (1 999), the Federal Trade Commission’s Fair Information
Principles (FK 1998a), and the European Union Privacy Directive (Messmer,
1998) detail appropriate online data collection and dissemination of personal
information in much of North America
and Europe.
Besides assessing the ethical concerns of business faculty members, we
sought to measure the extent and reliability of faculty knowledge regarding
former Internet privacy standards. Alba
and Hutchinson (2000), in a comprehensive literature review, reported that
people often become confident in their
knowledge through repeated experience
with a subject. But the actual correspondence between self-reported and objective knowledge is far from perfect. Indi-
zyxwvutsrq
zyxwvuts
zyxwvutsrqpo
zyxwvutsr
zyxwvutsrqpon
Background
An ethical framework can serve as the
means through which a bond of trust is
created between a business and consumers (Caudill & Murphy, 2000).
Almost without exception, most businesses would prefer to develop repeat
customer relationships. Such continuing
220
Journal of Education for Business
Downloaded by [Universitas Maritim Raja Ali Haji] at 00:24 13 January 2016
viduals’ confidence in their knowledge
consistently exceeds measures of their
objective knowledge. Because of this
tendency, business faculty members
may know less about Internet privacy
issues than they believe or state that
they do. Business students, however,
will be shortchanged if there is a disconnect between subjective and objective measures of faculty Internet privacy
knowledge.
The confidence that people have in
their knowledge regarding a subject has
been shown to be related to the amount
of time that they spend thinking about it
(Koehler, 1991). In some instances, this
confidence may be justified. In other
instances, as in rapidly changing fields,
high confidence may be unwarranted. In
this study, we posited that faculty members who had spent greater amounts of
time thinking about Internet privacy
issues would have inflated self-evaluations of their Internet privacy knowledge. We expected that their perceived
knowledge evaluations would be inconsistent with measures of their objective
knowledge. In Figure 1, we illustrate the
framework that we thought would influence what is taught and who teaches
Internet privacy topics.
We expected that information systems faculty members would be more
likely to hold somewhat inflated beliefs
about the extent of their Internet privacy
knowledge than faculty members in
other academic specializations. After
all, information systems faculty members have spent and continue to spend a
great deal of time thinking about issues
related to information technology. But
because of the rapidly changing nature
of the Internet, their objective knowledge of related issues may not have kept
pace. We also expected that assistant
professors, fresh from years of intense
study, and full professors, who over the
years have accumulated a reservoir of
thought, would have higher levels of
perceived knowledge when compared
with associate professors. Because previous research conducted across many
disciplines has suggested the lack of
correspondence between actual and perceived knowledge, we measured objective knowledge regarding Internet privacy between and among academic
specialties and ranks.
FIGURE 1. A Framework for PredictingTeaching of Internet Privacy
zyx
zyxwv
I
Acadeniic
rank
Perceived
know ledge
Teaching of
Internet privacy
knot\ ledge
Notes. The solid lines between constructs are those that proved to represent significant relation-
ships. Dashed lines represent potential relationships that were not found to be significant. We
tested the relationships between the teaching of Internet privacy issues and objective and perceived knowledge through discriminant analysis. We evaluated a potential relationship between
perceived and objective knowledge with a Pearson correlation and used MANOVA to examine
the relationships between academic ranWspecialty and perceivedobjective knowledge.
Method
on a 5-point Likert-type scale. Respondents were also asked to indicate, on a
5-point scale, how familiar they were
with the Federal Trade Commission’s
Internet Privacy Fair Information Principles. These guidelines form the basis
of Internet privacy regulation in the
United States. In addition, respondents
provided an estimate of the number of
classroom hours that they spent presenting Internet privacy issues during an
academic year. They also responded to
demographic questions concerning academic rank and specialty.
Finally, we asked two questions
regarding respondents’ knowledge
about (a) governmental regulations
regarding Internet privacy and (b) the
identity of the organizations that provide Internet privacy certification of
Web sites (i.e., notification of site privacy practices.) Each question required
that respondents identify, from a list of
six items, all those that were appropriate
for the category. A correct response was
classified as either inclusion of an
appropriate item or the omission of (i,e.,
leaving blank) an item that was inappropriate and unrelated.
zyxwvutsrq
We surveyed business faculty members at 25 institutions accredited by the
Association to Advance Collegiate
Schools of Business (AACSB). These
universities were selected at random
from an AACSB list of 382 currently
accredited U.S. business schools. We
took a census of faculty names from
each university Web site and initially
contacted these individuals via e-mail.
A cover letter personally addressed to
each faculty member from the Director
of the American Business Ethics Association requested their participation in
an Internet privacy survey and included
a link to the Internet survey site.
We administered the questionnaire
through an Internet survey module provided by Sawtooth Software. Seventyfive business faculty members responded
over the 2-week survey period. Academic
rank and academic specialty distributions
were virtually identical to known population parameters at the sampled institutions. The incidence of finance faculty
members was the only exception. The
percentage of finance faculty members
responding was slightly lower, although
not significantly lower, than the percentage of finance faculty members actually
at the sampled institutions.
The 27 questions measured ethical
concerns regarding Internet privacy. We
asked respondents to indicate their
degree of agreement or disagreement
with ethically related belief statements
Results
zyxwvutsr
We factor analyzed the initial 27
questions associated with faculty ethical
beliefs through quartimax rotation. In
line with the findings of other
researchers, we found two clearly separate dimensions relating to ethical deci-
MarcWApril2002
221
Downloaded by [Universitas Maritim Raja Ali Haji] at 00:24 13 January 2016
zyxwvutsrqp
zyxwvutsrq
sion making with regard to Internet privacy. In Table 1, we present the factor
loadings of individual questionnaire
items on the two identified factors. Factor 1 (questionnaire items listed in the
first eight rows of Table 1) related largely to choice and/or access issues, whereas Factor 2 (questionnaire items listed in
the last seven rows) primarily related to
security, disclosure, and/or enforcement. Because Factor 1 had both a higher Eigen value than Factor 2 (5.957 versus 2.839) and a higher percentage of
variance explained (22.1 % versus
10.5%), we concluded that the surveyed
faculty members were relatively more
adamant in their beliefs regarding
choice and access than in their beliefs
regarding security, disclosure, and
enforcement.
To test the extent to which business
faculty members were concerned with
Internet privacy issues, we created two
ethics summated measures based on the
respective items that loaded highly on
either factor. We conducted reliability
analyses on both indices. For Ethics 1
(choice and access), the Cronbach’s
Alpha of .8078 (p c .001) indicates that
the composite scale was highly reliable.
Similarly, the Cronbach’s Alpha of
A381 (p c .001) for Ethics 2 (security,
disclosure, and enforcement) indicates
that the latter summated index was also
highly reliable.
The mean for Ethics 1 (choice and
access) was 2.067, indicating that the
business faculty members were probably more comfortable with Internet
companies’ control of the ownership
and use of personal or behavioral data
obtained via the Internet than were consumers. For Ethics 2 (security, disclosure and access), the mean of 4.34 indicates that business faculty members
generally agreed that consumers should
be made aware of Internet informationgathering practices as well as have their
personal information protected by reasonable security measures. These findings are consistent with the utilitarian
framework that we had posited for business school faculty.
We performed a MANOVA to see if
position on ethical Internet issues differed by faculty rank or field. Neither
rank (Wilks’s Lambda = .845), nor field
(Wilks’s Lambda = .961), nor their inter-
TABLE 1. Factor Loadings of Ethics-Related Questionnaire Items
Factor 1:
Choice/access
Factor 2:
Security/
enforcemenu
disclosure
Consumers implicitly grant
permission to collect personal
information whenever they
provide data as a condition
of Web-site access.
.656
-. 145
The monitoring of Internet behavior
is the same as observing shopping
behavior in a store.
,613
-. 125
The intention behind Internet information gathering is to provide
consumers with greater value.
.63 1
-. 138
Installing software programs or
cookies on someone’s computer without permission violates personal
privacy rights.
.534
.008
Information gathered by a company
as part of an Internet transaction
belongs to the f i i .
.726
-.039
Parents must provide verifiable
permission before information may
be gathered from young children.
.540
.005
Vulnerable consumer groups are
victimized by the selling of personal
information gathered on the Internet.
.645
-.097
Internet privacy, as it exists today, is
consistent with the amount of
privacy afforded to consumers in
other types of commercial activity.
.621
-.129
-.094
.616
-.069
.913
The use of data collected from
consumers is restricted to the specific
purpose disclosed.
-.018
,797
Consumers must provide explicit
permission for the gathering of any of
their personal information on
the Internet.
-.356
,739
Deceptive information posted to a
commercial Web site is prosecutable.
-.097
.625
Consumers must be informed about
the security procedures used for safeguarding their information.
-. 180
.775
Governments have a duty to protect
the on-line privacy of their citizens.
-.446
,437
5.957
22.1
2.839
10.5
Questionnaire items
zyxwvutsrq
zyxwvutsr
222
A privacy statement must be displayed on every Web site.
Consumers must be informed on how
information gathered about them
will be used.
zyxwvuts
zyxwvutsrqp
Journal of Education for Business
Eigen value
Percentage variance explained by factor
Nore. Quartimax rotation was used in the factor analysis. Reverse-scaled items have had corresponding sign changes in factor loadings.
Downloaded by [Universitas Maritim Raja Ali Haji] at 00:24 13 January 2016
zyxwvutsr
active effect (Wilks’s Lambda = .816)
were significant, indicating that position
on ethical Internet privacy issues was
reasonably homogeneous throughout the
sampled business faculty.
We were also interested in determining objective knowledge regarding
Internet privacy issues. Two questionnaire items were relevant: The first
related to the organizations that provide
privacy certification of Web sites and
the second concerned the regulations
that govern Internet information gathering. Each of these two questions
required that respondents identify, from
a list of six items, all those that were
appropriate for the category. As in the
previous questions, a correct response
was classified as either inclusion of an
appropriate item or omission of (leaving
blank) an item that was inappropriate
and unrelated. Thus, for each of the six
subitems in either question, we had a
dichotomous variable.
We created a ratio-scale index for
each question by computing the percentage of correctly identified subitems.
We conducted reliability tests on each
“knowledge” question. Because the
original data were dichotomous, the
appropriate reliability statistic is
Cochran’s Q. Cochran’s Q for SITEKNOW (i.e., knowledge of which organizations provide privacy certification
of Web sites) was 195.99 (p
ISSN: 0883-2323 (Print) 1940-3356 (Online) Journal homepage: http://www.tandfonline.com/loi/vjeb20
The Need for Continuing Education on Rapidly
Changing Business Issues: Internet Privacy as a
Telling Example
Carl S. Bozman & Kathy L. Pettit-o'malley
To cite this article: Carl S. Bozman & Kathy L. Pettit-o'malley (2002) The Need for Continuing
Education on Rapidly Changing Business Issues: Internet Privacy as a Telling Example, Journal
of Education for Business, 77:4, 219-225, DOI: 10.1080/08832320209599075
To link to this article: http://dx.doi.org/10.1080/08832320209599075
Published online: 31 Mar 2010.
Submit your article to this journal
Article views: 14
View related articles
Citing articles: 1 View citing articles
Full Terms & Conditions of access and use can be found at
http://www.tandfonline.com/action/journalInformation?journalCode=vjeb20
Download by: [Universitas Maritim Raja Ali Haji]
Date: 13 January 2016, At: 00:24
Downloaded by [Universitas Maritim Raja Ali Haji] at 00:24 13 January 2016
The Need for Continuing Education
on Rapidly Changing
Business Issues: Internet Privacy
as aTelling Example
CARL S. BOZMAN
Gonzaga University
Spokane, Washington
I
nternet privacy issues occur across
business functional areas and may
inhibit the success of any organization
engaged in exchange activities. Trust in
the rapidly evolving electronic marketplace is a critical component in the viability of firms that rely on Internet features to create value. For example,
consumer surveys indicate that a significant number of people either refuse to
go online or are limiting their online
activities because of a perceived lack of
privacy (Green, 1998; Lenhart, 2000).
In addition, frequent Internet users are
prone to provide false information or
subvert data-gathering attempts altogether because they lack confidence in
Web site privacy (Fox, 2000; “Privacy
and American Business,” 1997).
Consumer concerns regarding Internet privacy are not without merit. Information technology has created an
unprecedented revolution in the ability
to systematically acquire and disseminate consumer data (Blattberg, Glazer,
& Little, 1994). Individual consumption
behavior can be easily tracked, profiled,
and shared among diverse users. People
are becoming increasingly aware that
they lack any measure of anonymity in
Web-based activities (Horrigan, 2000).
It is not too surprising, then, that any
zyxwvuts
zyx
KATHY L. PETTIT-O’MALLEY
University of Idaho
Moscow, Idaho
ABSTRACT. Business educators
often must teach topics that are changing rapidly or that extend well beyond
their specialty training. Thus, it is critical that faculty perceptions of knowledge correspond with objective measures of faculty knowledge. In this
study, the authors examined the consistency between faculty members’
perceived and actual knowledge about
a specialty topic in a rapidly evolving
area: Internet privacy. The authors also
investigated faculty perceptions
regarding the importance of different
dimensions of Internet privacy. Their
results suggest that, although some
important issues are being addressed
adequately, others are being overlooked because of a lack of accurate
information and faculty preparation
and training.
discussion of Internet privacy often
results in calls for government regulation. These requests are being made
more frequently and forcefully. The
Federal Trade Commission (FTC) has,
in particular, identified Internet privacy
as a major issue that must be addressed
on a priority basis (Federal Trade Commission, 199813; Miyazaki & Fernandez,
2000). In the past, the FTC promulgated
what it describes as five fair information
practices designed to govern Internet
privacy in concert with, as well as in the
absence of, explicit regulation. Con-
sumers should receive notice of a firm’s
information practices, have a choice
regarding subsequent uses of their information, have the ability to access information collected about them, have reasonable security of their personal
information, and have enforcement
measures available that are designed to
ensure organizations’ adherence to fair
information practices.
The Internet became the fastest growing form of information distribution in
history-in
part because it is largely
unregulated (Kennard, 1999). Any failure to voluntarily adhere to the FTC’s
fair information guidelines will ensure
that calls for mandatory regulation
become more vocal and more likely to
be heeded. The long-term commercial
success of the Internet may therefore
depend on how well businesses can
instill consumer trust in this largely
unregulated medium. Today, however,
many consumers have reason to lack
confidence in the World Wide Web
(Culnan, 2000). For example, in one of
Culnan’s samples, less than 14% of the
Web sites had any form of comprehensive privacy disclosure.
The ability to acquire and retain customers will also determine the success
or failure of an individual organization
zyxwvuts
zy
MarcWApril2002
219
Downloaded by [Universitas Maritim Raja Ali Haji] at 00:24 13 January 2016
engaged in Internet activity (Reichheld,
1993). Managing the customer relationship in an interactive environment is particularly challenging for electronic business ventures. A competitor’s Web site is
just a mouse click away. As a consequence, consumer trust is a fundamental
prerequisite needed for the achievement
and preservation of competitiveness
within this distribution channel.
Are business schools preparing students to effectively create consumer
trust and deal with other related Internet
privacy issues? This is a nontrivial question. Global electronic commerce has
been forecast to exceed 6.7 trillion dollars by 2004 (Sanders & Temkin, 2000).
In the United States alone, electronic
commerce is expected to account for
over 13% of the gross domestic product
in 2004. Firms that do not enjoy the trust
of consumers are unlikely to participate
in the growth of sales through this distribution channel. Perhaps more important,
industry’s disregard for consumer privacy is likely to lead to government regulation that could impede the development of Internet commerce altogether.
In this study, we examined business
faculty concerns over ethical issues
related to Internet privacy. We also
explored the extent to which business
faculty members are addressing Internet
privacy issues in the classroom. Our
results show somewhat ubiquitous and
homogeneous concern regarding Internet privacy issues. Our analyses also
demonstrate inconsistency among faculty perceptions of Internet privacy standards as they exist today, as well as
among the types of faculty members
most likely to incorporate Internet privacy materials in the classroom. Finally,
we conclude with a discussion of what
faculty and administrators can do to
enhance the quality of classroom presentation of rapidly changing business
topics, including Internet privacy.
relationships may be based as much on
trust as on any product benefits received.
Previous research has shown that consumers only distinguish between two
Internet privacy dimensions: (a) the
extent to which an individual has control
over his or her personal information and
(b) his or her awareness of personal
information gathered as a consequence
of Web-based activities (Foxman & Kilcoyne, 1993; Milne, 2000).
From a consumer’s perspective,
whenever a computer is logged onto the
Internet, Internet privacy and consumer
trust can be compromised. In the following discussion, we identify just two
ways in which privacy violations may
occur and illustrate how pervasive Internet privacy issues are likely to become.
Personal information is frequently
captured without the knowledge of consumers. Internet sites collect data on
everything from the consumer’s type of
browser and computer hardware to the
time that he or she spends on a Web page
and other Web sites. Web sites often
leave files called cookies on a user’s
computer. These files can identify consumers when they return to the site as
well as provide a great deal of information without the consumer’s knowledge.
For example, DoubleClick has merged
cookies to provide complex descriptions
of people’s online behavior (Baig,
Stepanek, & Gross, 1999) and RealNetworks has used music software to transmit the specific content that each customer has listened to and has matched
these data with personally identifiable
information (Quittner, 1999).
Many Web sites also explicitly
request personal information (e.g., visitor registration, warranty data, consumer surveys). Whether these Internet
sites provide an adequate disclosure of
how this information may be used is
another issue. Toysmart, for instance,
promised consumers that any information that they provided would never be
made available to another business entity without their permission. Recently,
however, Toysmart was allowed to sell
its customer database over the objections of 39 state attorneys general
(Richtel, 2000). The costs of unsolicited marketing contacts, for the consumer, after this information has been
sold and/or provided to affiliated com-
panies, are not inconsequential (Petty
2000).
We expect that most business faculty
members are generally aware of Internet
privacy issues and concerned about
related ethical dilemmas posed by business activities on the Internet. However,
the ethical framework that they use to
distinguish Internet privacy issues may
be quite different from the framework
used by consumers. Business faculty
members, for example, are expected to
gravitate toward a utilitarian model of
decision making (Laczniak & Murphy,
1993). In this circumstance, the incremental costs that an individual bears for
the sale of his or her information or its
use for undisclosed purposes are likely
to be regarded as less consequential than
the benefits conferred by market development activities. On the other hand,
consumers who have had their information used in unauthorized ways are not
likely to feel the same way. They often
find it increasingly difficult to establish
such bonds of trust subsequently.
Because of the relative newness and
rapid pace of change in e-commerce,
business faculty knowledge of Internet
privacy issues is likely to be limited in
scope and prone to error. After all, the
Internet phenomenon is still evolving,
and the relevant range of privacy issues is
a subject of ongoing debate. But there is
legislation as well as government guidelines regarding Internet privacy, and business faculty members should be aware of
this. Specifically, the Children’s Online
Privacy Protection Act (1 999), the Federal Trade Commission’s Fair Information
Principles (FK 1998a), and the European Union Privacy Directive (Messmer,
1998) detail appropriate online data collection and dissemination of personal
information in much of North America
and Europe.
Besides assessing the ethical concerns of business faculty members, we
sought to measure the extent and reliability of faculty knowledge regarding
former Internet privacy standards. Alba
and Hutchinson (2000), in a comprehensive literature review, reported that
people often become confident in their
knowledge through repeated experience
with a subject. But the actual correspondence between self-reported and objective knowledge is far from perfect. Indi-
zyxwvutsrq
zyxwvuts
zyxwvutsrqpo
zyxwvutsr
zyxwvutsrqpon
Background
An ethical framework can serve as the
means through which a bond of trust is
created between a business and consumers (Caudill & Murphy, 2000).
Almost without exception, most businesses would prefer to develop repeat
customer relationships. Such continuing
220
Journal of Education for Business
Downloaded by [Universitas Maritim Raja Ali Haji] at 00:24 13 January 2016
viduals’ confidence in their knowledge
consistently exceeds measures of their
objective knowledge. Because of this
tendency, business faculty members
may know less about Internet privacy
issues than they believe or state that
they do. Business students, however,
will be shortchanged if there is a disconnect between subjective and objective measures of faculty Internet privacy
knowledge.
The confidence that people have in
their knowledge regarding a subject has
been shown to be related to the amount
of time that they spend thinking about it
(Koehler, 1991). In some instances, this
confidence may be justified. In other
instances, as in rapidly changing fields,
high confidence may be unwarranted. In
this study, we posited that faculty members who had spent greater amounts of
time thinking about Internet privacy
issues would have inflated self-evaluations of their Internet privacy knowledge. We expected that their perceived
knowledge evaluations would be inconsistent with measures of their objective
knowledge. In Figure 1, we illustrate the
framework that we thought would influence what is taught and who teaches
Internet privacy topics.
We expected that information systems faculty members would be more
likely to hold somewhat inflated beliefs
about the extent of their Internet privacy
knowledge than faculty members in
other academic specializations. After
all, information systems faculty members have spent and continue to spend a
great deal of time thinking about issues
related to information technology. But
because of the rapidly changing nature
of the Internet, their objective knowledge of related issues may not have kept
pace. We also expected that assistant
professors, fresh from years of intense
study, and full professors, who over the
years have accumulated a reservoir of
thought, would have higher levels of
perceived knowledge when compared
with associate professors. Because previous research conducted across many
disciplines has suggested the lack of
correspondence between actual and perceived knowledge, we measured objective knowledge regarding Internet privacy between and among academic
specialties and ranks.
FIGURE 1. A Framework for PredictingTeaching of Internet Privacy
zyx
zyxwv
I
Acadeniic
rank
Perceived
know ledge
Teaching of
Internet privacy
knot\ ledge
Notes. The solid lines between constructs are those that proved to represent significant relation-
ships. Dashed lines represent potential relationships that were not found to be significant. We
tested the relationships between the teaching of Internet privacy issues and objective and perceived knowledge through discriminant analysis. We evaluated a potential relationship between
perceived and objective knowledge with a Pearson correlation and used MANOVA to examine
the relationships between academic ranWspecialty and perceivedobjective knowledge.
Method
on a 5-point Likert-type scale. Respondents were also asked to indicate, on a
5-point scale, how familiar they were
with the Federal Trade Commission’s
Internet Privacy Fair Information Principles. These guidelines form the basis
of Internet privacy regulation in the
United States. In addition, respondents
provided an estimate of the number of
classroom hours that they spent presenting Internet privacy issues during an
academic year. They also responded to
demographic questions concerning academic rank and specialty.
Finally, we asked two questions
regarding respondents’ knowledge
about (a) governmental regulations
regarding Internet privacy and (b) the
identity of the organizations that provide Internet privacy certification of
Web sites (i.e., notification of site privacy practices.) Each question required
that respondents identify, from a list of
six items, all those that were appropriate
for the category. A correct response was
classified as either inclusion of an
appropriate item or the omission of (i,e.,
leaving blank) an item that was inappropriate and unrelated.
zyxwvutsrq
We surveyed business faculty members at 25 institutions accredited by the
Association to Advance Collegiate
Schools of Business (AACSB). These
universities were selected at random
from an AACSB list of 382 currently
accredited U.S. business schools. We
took a census of faculty names from
each university Web site and initially
contacted these individuals via e-mail.
A cover letter personally addressed to
each faculty member from the Director
of the American Business Ethics Association requested their participation in
an Internet privacy survey and included
a link to the Internet survey site.
We administered the questionnaire
through an Internet survey module provided by Sawtooth Software. Seventyfive business faculty members responded
over the 2-week survey period. Academic
rank and academic specialty distributions
were virtually identical to known population parameters at the sampled institutions. The incidence of finance faculty
members was the only exception. The
percentage of finance faculty members
responding was slightly lower, although
not significantly lower, than the percentage of finance faculty members actually
at the sampled institutions.
The 27 questions measured ethical
concerns regarding Internet privacy. We
asked respondents to indicate their
degree of agreement or disagreement
with ethically related belief statements
Results
zyxwvutsr
We factor analyzed the initial 27
questions associated with faculty ethical
beliefs through quartimax rotation. In
line with the findings of other
researchers, we found two clearly separate dimensions relating to ethical deci-
MarcWApril2002
221
Downloaded by [Universitas Maritim Raja Ali Haji] at 00:24 13 January 2016
zyxwvutsrqp
zyxwvutsrq
sion making with regard to Internet privacy. In Table 1, we present the factor
loadings of individual questionnaire
items on the two identified factors. Factor 1 (questionnaire items listed in the
first eight rows of Table 1) related largely to choice and/or access issues, whereas Factor 2 (questionnaire items listed in
the last seven rows) primarily related to
security, disclosure, and/or enforcement. Because Factor 1 had both a higher Eigen value than Factor 2 (5.957 versus 2.839) and a higher percentage of
variance explained (22.1 % versus
10.5%), we concluded that the surveyed
faculty members were relatively more
adamant in their beliefs regarding
choice and access than in their beliefs
regarding security, disclosure, and
enforcement.
To test the extent to which business
faculty members were concerned with
Internet privacy issues, we created two
ethics summated measures based on the
respective items that loaded highly on
either factor. We conducted reliability
analyses on both indices. For Ethics 1
(choice and access), the Cronbach’s
Alpha of .8078 (p c .001) indicates that
the composite scale was highly reliable.
Similarly, the Cronbach’s Alpha of
A381 (p c .001) for Ethics 2 (security,
disclosure, and enforcement) indicates
that the latter summated index was also
highly reliable.
The mean for Ethics 1 (choice and
access) was 2.067, indicating that the
business faculty members were probably more comfortable with Internet
companies’ control of the ownership
and use of personal or behavioral data
obtained via the Internet than were consumers. For Ethics 2 (security, disclosure and access), the mean of 4.34 indicates that business faculty members
generally agreed that consumers should
be made aware of Internet informationgathering practices as well as have their
personal information protected by reasonable security measures. These findings are consistent with the utilitarian
framework that we had posited for business school faculty.
We performed a MANOVA to see if
position on ethical Internet issues differed by faculty rank or field. Neither
rank (Wilks’s Lambda = .845), nor field
(Wilks’s Lambda = .961), nor their inter-
TABLE 1. Factor Loadings of Ethics-Related Questionnaire Items
Factor 1:
Choice/access
Factor 2:
Security/
enforcemenu
disclosure
Consumers implicitly grant
permission to collect personal
information whenever they
provide data as a condition
of Web-site access.
.656
-. 145
The monitoring of Internet behavior
is the same as observing shopping
behavior in a store.
,613
-. 125
The intention behind Internet information gathering is to provide
consumers with greater value.
.63 1
-. 138
Installing software programs or
cookies on someone’s computer without permission violates personal
privacy rights.
.534
.008
Information gathered by a company
as part of an Internet transaction
belongs to the f i i .
.726
-.039
Parents must provide verifiable
permission before information may
be gathered from young children.
.540
.005
Vulnerable consumer groups are
victimized by the selling of personal
information gathered on the Internet.
.645
-.097
Internet privacy, as it exists today, is
consistent with the amount of
privacy afforded to consumers in
other types of commercial activity.
.621
-.129
-.094
.616
-.069
.913
The use of data collected from
consumers is restricted to the specific
purpose disclosed.
-.018
,797
Consumers must provide explicit
permission for the gathering of any of
their personal information on
the Internet.
-.356
,739
Deceptive information posted to a
commercial Web site is prosecutable.
-.097
.625
Consumers must be informed about
the security procedures used for safeguarding their information.
-. 180
.775
Governments have a duty to protect
the on-line privacy of their citizens.
-.446
,437
5.957
22.1
2.839
10.5
Questionnaire items
zyxwvutsrq
zyxwvutsr
222
A privacy statement must be displayed on every Web site.
Consumers must be informed on how
information gathered about them
will be used.
zyxwvuts
zyxwvutsrqp
Journal of Education for Business
Eigen value
Percentage variance explained by factor
Nore. Quartimax rotation was used in the factor analysis. Reverse-scaled items have had corresponding sign changes in factor loadings.
Downloaded by [Universitas Maritim Raja Ali Haji] at 00:24 13 January 2016
zyxwvutsr
active effect (Wilks’s Lambda = .816)
were significant, indicating that position
on ethical Internet privacy issues was
reasonably homogeneous throughout the
sampled business faculty.
We were also interested in determining objective knowledge regarding
Internet privacy issues. Two questionnaire items were relevant: The first
related to the organizations that provide
privacy certification of Web sites and
the second concerned the regulations
that govern Internet information gathering. Each of these two questions
required that respondents identify, from
a list of six items, all those that were
appropriate for the category. As in the
previous questions, a correct response
was classified as either inclusion of an
appropriate item or omission of (leaving
blank) an item that was inappropriate
and unrelated. Thus, for each of the six
subitems in either question, we had a
dichotomous variable.
We created a ratio-scale index for
each question by computing the percentage of correctly identified subitems.
We conducted reliability tests on each
“knowledge” question. Because the
original data were dichotomous, the
appropriate reliability statistic is
Cochran’s Q. Cochran’s Q for SITEKNOW (i.e., knowledge of which organizations provide privacy certification
of Web sites) was 195.99 (p