CASE - 1

MONITORING EMPLOYEES ON NETWORKS: UNETHICAL

OR GOOD BUSINESS?

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 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?

CASE STUDY QUESTIONS

1. Should managers monitor employee e-mail and Internet usage? Why or

why not?

Monitoring employee e-mail and Internet usage is a hotly debated subject.

Some will argue that it amounts to an invasion of privacy, whereas others will
state that managers have a right to expect that employees will do the job which
they have been hired. Using corporate resources such as e-mail and the Internet
on company time amounts to what is termed “service theft”. When employees
use company time and computer equipment to participate in e-mailing or Web
surfing activities that are not part of their duties, they are wasting valuable
corporate resources.

2. Describe an effective e-mail and Web use policy for a company.

Like all policies an effective e-mail and Web use policy must be carefully
designed and clearly communicated to all persons who use these corporate
resources. There are a number of different policies in existence. Some
companies allow absolutely no personal activities to be done on corporate
networks whereas others allow some degree of activity, and this activity can be
easily monitored. A good policy will detail exactly what type of activity is
acceptable and what is not allowed. The policy should clearly articulate
sanctions that will be followed for any and all offenses in relation to the policy.

As an instructor you might wish to show students an example of the University

of South Australia’s policy at

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 http://www.unisa.edu.au/policies/policies/corporate/C22.asp

MIS IN ACTION

Explore the Web site of a company selling online employee-monitoring software

such as NetVizor, SpyAgent, or Activity Monitor and answer the following
questions.

1. What employee activities does this software track? What can an employer learn
about an employee by using this software?
2. How can businesses benefit from using this software?
http://www.netvizor.net/
http://www.spytech-web.com/
http://www.pcacme.com/
3. How would you feel if your employer used this software where you work to
monitor what you are doing on the job? Explain your response.

The INTERACTIVE SESSION: MANAGEMENT Monitoring Employees on

Networks: Unethical or Good Business? This session discusses both sides of a
very sticky situation between employers and employees. It points out the need
for every company to have corporate policies regarding employee use of e-
mail and the Internet.

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 CASE - 2
INTERACTIVE SESSION: ORGANIZATIONS
WAL-MART GRAPPLES WITH RFID

Wal-Mart has required its top suppliers to use passive RFID tags on cases and
pallets shipped to its stores to help it track and record information flow. Suppliers
have been proceeding slowly because of difficulties in RFID implementation.

CASE STUDY QUESTIONS

1. How is RFID technology related to Wal-Mart’s business model? How does

it benefit suppliers?

Wal-Mart is the largest retailer on Earth. Their business model is centered on

using a low-cost leadership strategy in order to achieve the lowest operational
costs and services at a lower price than competitors while enhancing quality and
level of service. Wal-Mart have been able to follow their strategy of keeping
prices low and shelves well stocked by using a legendary inventory
replenishment system (Real Link). Through Real Link, Wal-Mart’s has a
continuous replenishment system that sends orders for new merchandise
directly to suppliers as soon as customers pay for their purchases at the cash
register. At Wal-Mart’s headquarters, the central computer collects the orders
from all Wal-Mart stores and transmits them to suppliers. The objective was to
reduce out-of-stock items by tracking item location more precisely as they
moved from the receiving dock to store shelves.

Suppliers can also access Wal-Mart’s sales and inventory data using Web
technology. Wal-Mart wanted suppliers to use of RFID technology in order to
assist the suppliers in shipping products more accurately and faster. RFID
technology offers other benefits to suppliers. RFID technology is tied directly to
Wal-Mart’s Real Link system. As soon as a customer purchases an item at a
Wal-Mart store, the supplier monitoring the item knows to ship a replacement
to the shelf. Suppliers are able to obtain real-time access to customer demand,
track shipments, and improve inventory control. Using these technologies,
suppliers are better informed of product demand, and given this information
they can use it to predict their own manufacturing, production, and shipping
logistics.

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2. What management, organization, and technology factors explain why Wal-
Mart suppliers had trouble implementing RFID systems?

Wal-Mart exemplifies the power of information systems coupled with brilliant

business practices and supportive management to achieve world-class
operational efficiency. The Retail Link system digitally links its suppliers to
every one of Wal-Mart’s stores worldwide. However, the implementation of
RFID systems appeared to be a top-down mandate by Wal-Mart without the
support of the suppliers.

Management:
• Design an RFID implementation strategy
• Educate and work closely with suppliers

Organization:
• Redesign RFID requirements for different product
• Overcome supplier resistance to RFID

Technology:
• Deploy RFID technology required in implementation.
• Implementation of RFID into suppliers IT infrastructures and information
systems (many are legacy systems and costs would be high).

3. What conditions would make adopting RFID more favorable for suppliers?

Not all suppliers could comply with Wal-Mart’s demand for attaching RFID
tags to all of their products. Only a limited number of suppliers could afford to
make the major technology and business process changes required to integrate
RFID into their IT infrastructure and information systems. RFID technology is
still viewed as being in its infancy and the benefits are not fully understood or
even measurable. On top of that, this technology is still very expensive and
pricing of the tags themselves make it impossible for the majority of suppliers
to do it.

Wal-Mart must assist suppliers in making the required changes to their systems
so that the can actually use the data generated by RFID to track their product
movement and inventory. Through education, the suppliers would be better
equipped to understand how they can benefit from RFID.

4. Should Wal-Mart require all its suppliers to use RFID? Why or why not?
Explain your answer.

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 In February, 2005 Wal-Mart ordered its top suppliers to place RFID tags on all
products shipped to specific distribution centers. The objective was to reduce
out-of-stock items by tracking item location more precisely as they moved from
the receiving dock to store shelves. The information captured through the use of
RFID tags would held Wal-Mart reduce out-of-stock items, increase sales, and
further reduce its costs. However, suppliers are not totally convinced of the
benefits that they would reap from such an expensive undertaking.

Wal-Mart has the power to exercise muscle in the supply chain. However, Wal-
Mart must streamline their demands in requiring suppliers to attach RFID tags
to all items. From the supplier side, this top-down mandate from Wal-Mart was
simply not economically feasible. The technology itself is still very expensive
and suppliers simply could not state a good business case to support such
expenditures.

Major retailing and manufacturing companies will no doubt switch to RFID

technology as its costs fall, and its applications increase. Whether or not all
major retailing and manufacturing companies should switch to RFID is a matter
of choice. They will no doubt go this way in the near future. By doing so, they
will increase operational efficiencies, increase profits margins, and gain a
competitive advantage by lowering overall costs to consumers.

MIS IN ACTION
Explore the RFID Privacy Page at the Electronic Privacy Information Center
(EPIC) (http://www.epic.org/privacy/rfid) and answer the following questions.

1. Describe some RFID applications that might pose a threat to privacy. What
information does RFID enable them to track?
2. How do these applications threaten personal privacy? How serious is this
threat?
3. Should these RFID applications be deployed? Why or why not? Justify your
answer.

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