The implications of RFID on society. An ethical case study
using William May’s seven-step method
for an ethical analysis

von: Andreas Weth

Table of Contents

1. Introduction 2

2. Case Study 3

3. Analysis 7

3.1 The facts 8
3.2 Ethical issues 11
3.3 Major principles 13
3.4 Alternative courses of action 14
3.5 Comparison of values and alternatives 15
3.6 Assessment of the consequences 17
3.7 Finalizing a decision 18

4. Conclusion 19

Bibliography and further recommended reading 21

Background information about RFID and the Mexican retail market 22

1. Introduction

This document contains a case study and an example evaluation of an ethical problem in the information technology environment.
In the second chapter of the paper the text of the case study is included. The Chief Information Officer (CIO) of a Mexican supermarket chain has to come to a decision about the implementation of Radio Frequency Identification Technology (RFID) in several stores and warehouses in Mexico. The introduction of RFID has major impacts on customers besides the possible selling of consumer data to a third party marketing research company.
The third chapter of the paper finally deals with an example case report in which William May’s seven-step method is used for an analysis and a possible solution to the decision problem.
To sum up the case report, a conclusion is given in the fourth chapter. Lastly all necessary and additional information can be found in the appendix. Especially the attached research publication from MIT and Accenture “Auto ID in the box: The value of Auto-ID Technology in Retail Stores” should be considered for more detailed background information about RFID technology and its impacts. The publication can also downloaded from Accenture’s website (www.accenture.com).
However as for most case studies, there is not a unique solution to the problem. Therefore learning outcomes of the case study are to not to develop the perfect solution the writers of the case had in mind but to see an ethical problem from different perspectives and to learn how to evaluate an ethical problem by applying a suitable concept for analyzing the situation.

2. Case Study

It is a lucrative offer, Alejandro Lopéz Martes, just received from Delincuencia Marketing Services (DMS). Ten million US Dollars in advance for selling customer sales data from all Mexican supermarkets during the next five years could solve some financial problems at Platano Supermercados S.A. de C.V. (S.A. stands for Sociedad Anónima and is the Mexican equivalent to a stock company whereas C.V. means that the company capital funds and stocks are variable) where Alejandro was working as the company’s CIO. When this deal would turn out to be successful, it would mean a huge step forward towards his aim to become managing director of Platano Supermercados. The current CEO, Benicio Juaréz de Garibaldi would probably work just 2 more years until his retirement, but Benicio was already looking for a successor in the company, Alejandro knew. And Alejandro was on his list due to his success, his reputation and his strong academic background which is seen in Mexico as prerequisite for climbing up the corporate hierarchy. Graduated 15 years ago with a degree in Business Administration from the prestigious Mexican University Tec de Monterrey, Alejandro started at Wal-Mart in the early nineties but soon accepted an offer from Platano Supermercados in Mexico City and worked his way up to the general management.

It wasn’t an easy time when he started at Platano Supermercados as the department manager for market research. Due to the high competition on the Mexican Retail Market and the competitive advantages of Wal-Mart, the most important player on the Mexican retail market, Platano Supermercados margin has continuously shrunk. Additionally the share price of Platano Supermercados has sunk during the last ten years whereas the share price from Wal-Mart was usually above average or on a record high.

But in spite of the harsh business conditions, Alejandro found colleagues he could trust and also spend spare time at the golf club.
One of his best friends and colleagues is Stuart, who emigrated from the United Kingdom to Mexico and is currently the Chief Financial Officer at Platano Supermercados. As Alejandro knew from his colleagues, he was widely accepted in the company for his business knowledge and his direct and passionate approach of solving problems. But for some people Alejandro seemed to be rude and offensive. Discussions therefore always occurred with the energetic head of the Human Resources Department, Cathrin Jontera de Vaqueros, due to her opinion that people should be better paid and treated with more respect at Platano Supermercados. Alejandro had argued with her countless evenings how to reduce costs without reducing the number of employees.

When he first read in a short article on the web site of Frontera Consulting, the consulting company which implemented the new enterprise resource planning software from SAP at Platano Supermercados last year, about the opportunities of RFID, he thought that it could be an opportunity to reduce costs and therefore increase profitability without firing employees.

Probably it would be a good idea to ask the consultants about a presentation and possible introduction strategies. Five minutes later he called one of the managing partners in the nearest office of Frontera Consulting and agreed on a presentation date next week. After the meeting with the consultants he was still sitting in his office late at night and thought about the most important sheets from the presentation.
The consultants also left him the research publication “Auto ID in the box: The value of Auto-ID Technology in Retail Stores” where the technology and the advantages of RFID were further described.

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