Ethical Issues in Business MGMT 202

Memo

M E M O R A N D U M

TO: [Dr. Melendez] Department of Management and Organizations FROM: [Your name] [Initials]

MGMT 202 RE: [Guest Speaker name/Documentary title] DATE: [Assignment Due Date] During the semester there will be guest speakers, documentaries, and cases that will address ethics from a variety of perspectives. In memo format you will be asked to respond to unique questions posted on D2L prior to the assignments. Please include each question in your memo. For the assignments, you are to submit a one-page memo (12 font & single space) to D2L before midnight on the date stated on the course schedule. Assignments submitted one day late will be accepted, but with a 50% deduction before grading. Assignments submitted after that point will not be accepted. Follow the format provided in this document. Be sure to use this heading, include your initials, and include a space between paragraphs. The memo should be concise and to the point. Be mindful of your grammar and spelling. Remember this assignment is for a grade. Below is the grading rubric.

Memorandum

TO: Dr. Melendez Department of Management and Organizations

FROM: Marcela Fuerte Velasco [MFV] MGMT 202

RE: A Postmortem: Theranos, Inc./The Inventor: Out for Blood in Silicon Valley

DATE: October 29, 2020

(1) Was there a certain type of Theranos board member Holmes recruited? Explain.

Holmes recruited people that were in top leadership positions in a few different fields who she considered to be “strategically brilliant”. She hired General Mattis, who was a former US Central Commander, Dick Kovacevich, the former CEO of Wells Fargo, Sam Nunn, who did work relating to nuclear and biothreats, as well as a few former Secretary of States. Since she knew that what Theranos was working towards would ultimately be serving people, she wanted to hire like-minded individuals as board members that had experience in looking out for the well-being of their people.

(2) What was the connection between Theranos and Arizona?

Theranos partnered with Walgreens in 2013 and tested real patients in Arizona. However, the Edison machines had problems and were not approved for in-store testing yet. Despite the restriction, Theranos was willing to proceed without the approval because the company was running out of money, and the partnership with Walgreens was their way to secure more funds from new investors. Elizabeth decided to launch the Wellness Centers without the Edisons and instead have the blood samples transferred to Palo Alto where inexperienced lab technicians produced the test results. Elizabeth also lobbied the state of Arizona to pass a law that allowed patients to order lab tests without the need to ask doctors, claiming that this would give patients the opportunity to finally be involved in their own health.

(3) In your opinion, what was the most unethical aspect of the Theranos scandal?

The most unethical aspect of the Theranos scandal was the misrepresentation of lab results and confirmation that their machines produced accurate results when that was not true. Elizabeth and leadership tried forcing the image of a multibillion-dollar company successfully carrying out their action plans to instill trust and convince more people to buy into their idea. The company used their faulty technology and lied to patients about their test results by diluting the blood samples to make them work. It is the worst thing out of all they did because it put people’s lives in danger. As one of the former employees explained, one of the tests Theranos had begun to perform was for syphilis. In his example, he said only 65 out of 100 patients would be told they had syphilis while the other 35 would be lied to and told they were healthy. Such actions certainly would not benefit society because more disease would be prevalent.