What problem are they facing? Examples on ways to solve the problem? Blood, Brilliance, Blind Ambition, and FraudHow can you change the world of medicine, or at least medical testing, monitoring, and diagnosis? One potential way is toinvent a device that performs more than 240 tests with just a couple of drops of blood, faster, more effectively, and with lesspain than existing approaches.88 Coming up with the idea is one thing, but raising the funds and assembling the necessarytalent is another. It's not enough to have an idea, you need to bring it to life. If you were to do this it would help to beextremely intelligent, even more driven, and be willing to do anything it takes. Anything. This describes Elizabeth Holmesand the company she founded, Theranos, which aimed to revolutionize medicine with a new blood testing technology.FORECLOSURE OF A DREAMUnfortunately, the technology didn't work. But that didn't stop Holmes from telling investors, customers, employees, thepress, and everyone else it did. Her ambition transformed to fraud and resulted in the death of Theranos. The testing thatsupposedly certified the efficacy of the company's product has since been discredited, and it is now known that some of thedemonstrations of prototypes of the company's products were rigged.The billions of dollars in estimated value of Theranos are gone, along with It the accolades once showered on Holmes asbeing the youngest self-made billionaire at age 30. At one point $9 billion but now $0. Also gone is the $700 million ofinvestors' actual money, and the jobs of many very talented employees who were either fired or quit during the company'sexistence. These employees, along with the unfortunate few who stayed to the end, may have tarnished reputations foryears to come as a result of their association with Holmes and her company. Holmes is now faced with the fallout and isconfronted with criminal charges related to defrauding investors, customers, employees, and most anyone else connected tothe company. Her ex-boyfriend, and Theranos's president and COO, Ramesh Balwani is also facing many of the samecharges. He acted as confidant, advisor, and as many insiders eventually learned, was seemingly the only other personwithin the company besides Holmes how knew the truth.89HOW DID THIS HAPPEN?She went from Stanford undergraduate engineering student and celebrated female entrepreneur, to the founder and leaderof one of the most astounding frauds in science and business in the recent past. Theranos was the company she foundedwith the hopes and claims that its technology would revolutionize blood testing and in the process medicine. Holmes always with the hopes and claims that its technology would revolutionize blood testing and in the process medicine. Holmes alwayswanted to make an impact, and at 19 saw this as her path. She spent the next several years assembling the necessary talent,money, influence, and notoriety to realize her vision. But as we now know it was a sham.Holmes was single-minded and unwavering in pursuit of her vision. She ruled the company like a dictator, making all criticaldecisions herself, sharing information on a need to know basis, and expressing enthusiasm and positivity even in instancesof flat out failures, such as demonstrations and presentations to investors and potential customers. She quickly soured on,then avoided, and even retaliated against those who questioned her or her ways. Absolute loyalty, which meant agreementand obedience, was demanded by Holmes. Individuals and groups who spoke out or otherwise fell out of favor were quicklydismissed, as was any feedback that was inconsistent with Holmes's desired message or outcome,⁹0Although it was Holmes's company, and she hoarded authority, other factors supported her ultimately disastrous approach.Her vision, charisma, conviction, and delivery persuaded many wealthy and otherwise powerful people and organizations tosupport her cause. For Instance, two of the largest Investors were Betsy DeVos, now education secretary and part of thefounding family of Amway, as well as Rupert Murdoch (the media mogul who owns Fox among many others). The board wasstacked with celebrities from government (Henry Kissinger and George Schultz, both former secretaries of state). Along withothers with impressive track records from Apple and other tech companies, these prominent Individuals gave Holmes andTheranos credibility.991Page 40WHAT ABOUT THE BOARD?The company also had a board of directors, which, as in other companies public or private, was charged with ultimateoversight and responsibility. Members of the Theranos board had impressive resumes and should have been up to the task,such as Avie Tevanian, who was Steve Jobs's righthand man at Apple and head of software engineering, and Don Lucas(chair of the board) a long-time and successful venture capitalist. However, they were relatively silent or when they did speakup, as Tevanian did, they were dismissed. Apparently, Holmes grew tired of his increasingly confrontational insistence she"open the books" and justify her seemingly wildly and overly optimistic revenue projections.92Theranos'sBut the real truth is coming to light from books, documentaries, and legal proceedings. Walgreens, onemarquee customers, is suing for $140 million, the SEC has charged Holmes and Balwani with fraud, and other investors aresure to follow. This raises the question: how could this have been avoided? How can this be prevented in the future?

It involves a case of fraud where Holmes misled her stakeholders about a device she was building…

Answered: What problem are they facing?…

Business

Management

What problem are they facing? Examples on ways to solve the problem?

Foundations of Business (MindTap Course List)

6th Edition

ISBN:9781337386920

Author:William M. Pride, Robert J. Hughes, Jack R. Kapoor

Publisher:William M. Pride, Robert J. Hughes, Jack R. Kapoor

Chapter15: Using Management And Accounting Information

Section: Chapter Questions

Problem 1DQ

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