Octopus and Privacy: Business Ethics

Topics: Octopus card, Hong Kong, Privacy Pages: 8 (2406 words) Published: May 5, 2011
Octopus and Privacy: Business Ethics

Table of Content
The Objective3
Research Methods3
Background of the Company3
Background of the Issue5
Identification of Issue7
Analysis of Issues8
List of Reference12

Hong Kong has one of the most highly successful e-purse programs, the Octopus card. The Octopus card, which began in the niche transportation industry and extended outward to retailers, has been widely adopted by consumers and a diverse number of merchants. More than 95 percent of Hong Kong’s residents aged 15 – 65 carry the card. The Objective

Our purpose is to develop some insights by investigating the management issue of the Octopus card company. We would identify the issue and analyse the problem in this paper. Lastly, we would suggest some recommendations to the organization for improvement. The major issue is protecting the privacy of personal information, which continues to pose significant challenges for organizations. Because consumers are vulnerable in their dealings with businesses due to a lack of information about and an inability to control the subsequent use of their personal information, we argue that organizations have a moral responsibility to these individuals to avoid causing harm and to take reasonable precautions toward that end. Research Methods

We adopted the secondary data research for conducting research as it is an efficient way to search for information. We have collected some existing research result and data from published, such as, the newspaper clipping from internet, article related and journals etc.

Background of the Company
Octopus Holdings Limited is a holding company based in Hong Kong jointly owned by five major transport companies (54.4% by the MTR Corporation, 22.1% by the Kowloon-Canton Railway Corporation, 12.4% by Kowloon Motor Bus, 5% by Citybus, and 3.1% by New World First Bus.) in the city. Its subsidiaries, which are all wholly owned, operate the various functions of the Octopus card in both its commercial and non-commercial usage. In 2006, the company gained international recognition by winning the Chairman's Award of the World Information Technology and Services Alliance's 2006 Global IT Excellence Award for the Octopus card system.

Octopus Holdings Limited was formed in 2005 after a company restructure of Octopus card operator Octopus Cards Limited. The Octopus card is used by card holders as an electronic payment system, and as such, the Octopus card system is considered a commercial business and is regulated by the Hong Kong Monetary Authority. The non-commercial businesses of the company, such as the consumer rewards program, consumer market research, and investment holdings, on the other hand, are not subjected to such regulations. The company restructures placed Octopus Cards Limited as a subsidiary of Octopus Holdings Limited, while the non-payment businesses of the company were placed under other subsidiaries, such that its payment businesses are independent of its non-payment businesses.

Additionally, Octopus Holdings Limited has also expanded the use of the Octopus card system internationally, operating its businesses outside Hong Kong under a subsidiary.

Background of the Issue
Octopus cards are almost a necessity in Hong Kong. However, the scandal of the sales of a million Octopus cardholders' personal data may erode confidence in Octopus Holdings. The Octopus card company was found to have contravened three data protection principles. It collected more data than it needed to verify its customers' identities and sold them for monetary gain. It was found that, in a period of eight years, it made HK$57.9 million by selling personal data to its business partners without data subjects' consent.

In 2001, the executive management had an idea that was selling the private information of cards holders for the commercial. During this year, they...
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