Analysis of Unethical Selling Practices at Lenovo: An Article Review

This report provides an in-depth analysis of an article concerning Lenovo's unethical selling practices, focusing on the installation of Chinese spy chips and subsequent data breaches. The report explores the legal repercussions, including the FTC settlement and violations of the Data Protection Act of 1998, as well as the negative impact on Lenovo's share prices and customer trust. It examines the actions taken in response to privacy laws, such as negotiations and compensatory measures, and assesses the effectiveness of these strategies in recovering from the violations. Furthermore, the report delves into the rationale behind Lenovo's actions, including the need to uninstall Lenovo Solution Centers and address vulnerabilities to prevent hacker interventions and malware, highlighting the importance of data security and ethical conduct in business practices. The report uses the triple bottom line approach to analyse how the parameter of "people" was adversely affected in case of Lenovo.

Running head: HUMAN RESOURCE MANAGEMENT
Article review on unethical selling practices in Lenovo
Name of the student:
Name of the university:
Author note:

1
HUMAN RESOURCE MANAGEMENT
Table of contents

2
HUMAN RESOURCE MANAGEMENT
Article Source: https://www.cnbc.com/2018/10/05/lenovo-tumbles-after-report-about-
alleged-chinese-spy-chips.html
Legal impact of the issue
In the era of 2018, FTC settlement decisions led to the partnership between Lenovo
and Vizio. In case of Lenovo, the settlement seemed to be ineffective, as it led to the
allegations regarding unethical selling of the computers within the US market, which was
previously installed with Chinese soy chips in the software. The alarming issue is that
consumer information was disseminated to the third parties without the consent of the
consumers. This reflects the breach of the standards and protocols of the ethical code of
conduct (Cnbc.com, 2020). The immediate impact of this issue was the loss of confidential
data leading to customer complaints. Involvement of the third parties added an interrogative
parameter to the security of the solutions for the clients and customers. Along with this, the
issue is also a breach to the Data Protection Act (1998). One of the other impacts was the loss
of the share prices by 23%, which led to the controversies regarding surveillance by Amazon
web services and Apple, which was negated by both the companies (Cnbc.com, 2020). This
situation gave rise to the conflicts in the provision of the web services, which deprived the
consumers of their needs. In this perspective, the parameter of “people” was adversely
affected in case of the triple bottom line approach of Lenovo.
Action in terms of the privacy laws
Privacy laws and legislations, at any workplace, is related to the assurance regarding
protection of the consumer data from the instances of commercialization. Typical example
can be Data Protection Act (1998), Consumer Protection Act (2005) and others. In case of the
Lenovo incident, the resolution measures involved entering into consents and mutual
agreements through negotiation for averting the instances of conflicts, discrimination and
harassments. FTC supervised the entire negotiation process and made claims for undertaking

3
HUMAN RESOURCE MANAGEMENT
unbiased decisions. According to claims, Lenovo was to obtain feedback from the clients and
consumers prior to running the software or implementing the software security programs
(Cnbc.com, 2020).
In case of Vizio, the instructions was to pay the compensatory amount of $2.2 billion
at the initial stage. After this, the collected data was to be deleted followed by the disclosure
of specific information for enhancing the transparency in the stability between the
relationships with the customers. Feedback collection was also to be conducted before the
implementation of the data security program (Cnbc.com, 2020).
Recovery from violation
Settlement through negotiations was one of an effective means for Lenovo to recover
from the violation and data breaches. Along with this, compensations to the victims also
reflected the conscious approach towards recovering from the violation to the standards and
protocols of the data security. Media coverage to the issue reflected the consciousness
towards paying compensation to the victims for enhancing the scope and arena of the
corporate social responsibility. Assistance was also taken from the domestic authorities for
gaining awareness about the enforcement of the latest version of the legislations. This
assistance proved to be effective for coping up with the national security concerns
(Forbes.com, 2020). Confession regarding the data leakage reduces the intensity of the crime
to some extent. In this context, mention can be made of the supervision from the advisory
agencies regarding implementation and enforcement of the latest legislations. Vertical
structure reports were prepared for scanning the issue and its impact on the overall
productivity.
Rationale
Internet research has led me to establish the fact that Lenovo needs to uninstall the
Lenovo Solution Centres. Spontaneity in this direction would be beneficial for averting the

4
HUMAN RESOURCE MANAGEMENT
instances of hacker interventions and malware. On the contrary, lackadaisical approach in this
regards would add vulnerability to the market position of Lenovo. As a matter of
specification, I am surprised at the point that the hackers can write a pseudo file, which would
allow easy access to the confidential files, consisting of the information collected from the
customers (Forbes.com, 2020). Negligence towards submitting reports on ceasing the practice
can act as a challenge in terms of providing effective solutions towards reducing the instances
of hacker interventions and malware.
One of the other issues excavated is that of the covering the tracks, which aggravated
the vulnerability in the marketing practices. As a matter of specification, allegations were
brought in for the manufacturer of the computers regarding delaying the end of life dates by
several months. As a result of this, I am alarmed at the issue that the feature was discontinued
prior to the final launch in the era of 2018. Instructions were levied to the customers
regarding getting rid of the laptops between the versions of 2011 to 2018 (Cnbc.com, 2020).
Such instructions reflect consciousness towards the wellbeing of the customers from the
instances of cybercrimes.

5
HUMAN RESOURCE MANAGEMENT
References
Cnbc.com (2020). Lenovo shares tumble following report about alleged Chinese spy chips.
Retrieved 13th March 2020 from https://www.cnbc.com/2018/10/05/lenovo-tumbles-after-
report-about-alleged-chinese-spy-chips.html
Forbes.com (2020). Lenovo confirms 36TB data leak security vulnerability. Retrieved 13th
March 2020 from https://www.forbes.com/sites/daveywinder/2019/07/17/lenovo-confirms-
36tb-data-leak-security-vulnerability/#16b73fe162b9

6
HUMAN RESOURCE MANAGEMENT
Bibliography
Chen, H. S., & Jai, T. M. (2019). Trust fall: data breach perceptions from loyalty and non-
loyalty customers. The Service Industries Journal, 1-17.
Gwebu, K. L., Wang, J., & Wang, L. (2018). The role of corporate reputation and crisis
response strategies in data breach management. Journal of Management Information
Systems, 35(2), 683-714.
Moss, A., & Deni, J. (2018). A User's Guide to Data Breach Insurance Coverage. Risk
Management, 65(3), 48-52.
Talesh, S. A. (2018). Data breach, privacy, and cyber insurance: How insurance companies
act as “compliance managers” for businesses. Law & Social Inquiry, 43(2), 417-440.