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UA MGMT 202 - MGMT Memo 3

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Ethical Issues in BusinessMGMT 2020Memo #3MemorandumTO: Dr. MelendezDepartment of Management and OrganizationsFROM: Michael Lemoine MJLMGMT 202RE: Theranos, Inc.DATE: March 5, 2020(1) Was there a certain type of Theranos board member Holmes recruited? Explain.When Holmes launched the privately held company “Theranos”, she had to make sure operations were being run exactly right. Holmes surrounded herself around some of the most powerful people in the country. From David Boies, James Mattis, William Foege, Riley Bechtel, Richard Kovacevich and Fabrizio Bonanni, some could say that Holmes surrounded herself around the nation’s most prominent individuals. Even being connected to the Obama Administration, some saw it as a way to hopefully keep regulators away. In other words, it was an ingenious way to demonstrate “fake it until you make it”. (2) What was the connection between Theranos and Arizona?Arizona became an important tool to Theranos in its fight to stay alive. Holmes and her team lobbied Arizona officials to allow patients to order blood work with results without doctors. This allowed Theranos and Walgreens to open in 2013. Additionally, it helped raise an additional $400 million from new investors with the intention that the company would continue to grow and expand. However, it raised many flags from the medical field because doctors were struggling to give out prescriptions to individuals that didn’t necessarily understand their results or even understand how their blood was tested. (3) In your opinion, what was the most unethical aspect of the Theranos scandal?In my opinion, the most unethical aspect of the Theranos scandal was their treatment against their previous employees. Not only did the company continue to lie about its product and practices, but it threatened to destroy the lives of employees that didn’t believe in their practices. The company not only overly monitored its employees and their every move, it cost people hundreds of thousands in legal fees, while also making them scared for their


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