The Problems Caused by Information Systems of Aol and Related Suggestions

The Problems Caused by Information Systems of AOL and Related Suggestions

Executive Summary

There are three main stakeholders among this case study, American Online (AOL), the collaborators CUC International and TelSave, and customers of AOL. AOL is the Internet giant providing commercial service worldwide. CUC International and TelSave provide discount shopping and phone services respectively. Base on the case, the use of information systems principally caused ethical issues in privacy (information rights and obligations), and system quality. Moreover, it involved two dilemmas for AOL. The first dilemma focused on privacy. AOL intended to sell phone numbers to maintain collaborator relationship, at the same time, it faced ethical issue of protecting privacy of customers. In another dilemma, AOL failed to balance customer relational and the system quality. In other word, AOL prefer majority of people to response the promotion at a relatively lower cost for the networking. After identifying relationships among stakeholders, and recognized problems caused by information system, several suggestions were presented. For the privacy problem, AOL should firstly have a rapid response to complaints and modify the dissemination plan. It is sensible for AOL to change the way dissemination, for example to form a group representing CUC International and TelSave to complete the telemarketing. Another two suggestions were provided for subscribers who refuse to receive marketing calls. One is to allow customers to choose whether to receive telemarketing calls and promotion information during registration. Another is to apply an opt-in model. As for the system quality problem, AOL should check the network capacity and estimate the number of customers in peak season. Furthermore, AOL can launch several promotions with various levels of quality and charges, which will disperse pressure in peak season. All these suggestions seemed to be available on the problems.

Introduction

In the past ten years, computers and information systems developed at an incredible space. However, the development of information system raised ethical, social, and political issues in five dimensions including information rights and obligations, and system quality. Privacy is one significant part of information rights and obligations.

Description (Relations and Problems)

Figure 1: the relationships among main stakeholders in this case

There are three main entities in this case study, American Online (AOL), the collaborators and customers of AOL. AOL is the Internet giant providing commercial service depending on Information System worldwide. However in 1997, it was witnessed that AOL arrange to sell 8.5 million phone numbers from its customers to two telemarketers. Moreover, the company caused a problem by a promotion that it endeavored to extend its network capacity to reduce network pressure during peak. Obviously, the problems above were chiefly caused by Information System.

Both of the two events indicated the conflicts between AOL and its customers directly. Customers are the potential profits of companies since customers are the destination of the service produced (King, 2003). The first event focused on the privacy. Majority of people are intensely sensitive about their privacy which will protect them from emotional, psychological and financial impairments (Meril, 2011). However, as information technology and system develops, it intimidated individual privacy in a cheap, profitable and effective approach (Laudon, 2010) In this case, AOL arranged to reveal personal information of its customers for business purpose while customers were firmly opposed to the behavior to protect their privacy. The customers pursued higher value of privacy. Whereas AOL had a dilemma in privacy that on one side it intent to cooperate with marketing organizations, at the same time, it faced ethical issue of protecting customers' privacy.

The second event mainly caused by the poor system quality AOL applied a strategical promotion for product advertisement and profit maximization. Conversely, it underestimated the technologically available for the system quality and failed to update its network capacity, which exasperated customers who had paid for the product. The customers aspired to high quality of system while AOL pursued profit and had a dilemma as the first event.

Regardless of the conflicts between AOL and customers, AOL had chased with its collaborators, CUC International and TelSave. tow marketing organizations. As Kulwant and Will discovered in 2004 that economics, organization, and strategy research illustrate that business take advantage of collaborative relationship. Since AOL had signed a contract with these two organizations, it should provide phone numbers of its customers. If AOL responded the anger of customers and refused to provide numbers after signing contract, it will suffer an unimaginable loss on finance and reliance.

Analyze and Discuss (Suggestions)

AOL founded itself besieged with vehement complaints from customers due to the two events in 1997. As the controversy intensified, AOL was drawn into the dilemma. On one hand, customers and collaborators relationship are both important and there seems to be a conflict between them, to protect privacy of customers or keep selling the phone numbers of its customers. On the other hand, AOL should balance the revenue from the promotion and the cost and the quality of the system.

The first dilemma was primarily caused by the ethical issues of privacy. In this dilemma, customers, two marketing organizations and AOL are the stakeholders among this case since they all benefit from the outcome. Customers want AOL suspend selling their phone numbers in order to protect their privacy while two marketing organizations prospect AOL fulfill contract to keeping up with customers and telemarketing. Obviously, ethical issues of privacy should be analyzed. Ethical issues raised by information system should be considered since they intensify social change; it is possible to redistribute power, money, right and obligations (Laudon, 2010). People care about privacy because they do not trust everyone else, especially strangers. Privacy is an essence of humanity, as people are unwilling to show everyone their behaviors, emotion and location. Moreover, it is claimed that Internet users are