Journals A-Z
All Subjects
Free Journals
sciepub.com
Journal of Behavioural Economics, Finance, Entrepreneurship, Accounting and Transport
ISSN (Print): 2376-1326 ISSN (Online): 2376-1334 Website: https://www.sciepub.com/journal/jbe Editor-in-chief: Pr. Abdelfatteh Bouri
Open Access
Journal Browser
Go
Issue 1, Volume 12
Article Metrics
  • 2183
    Views
  • 11030
    Saves
  • 0
    Citations
  • 9
    Likes
Export Article
Journal of Behavioural Economics, Finance, Entrepreneurship, Accounting and Transport. 2025, 12(1), 1-16
DOI: 10.12691/jbe-12-1-1
Open AccessCase Study

A Case Study: “Theranos - The White Elephant That Wanted to Be a Unicorn”

Judith Mueller1, , Carly Jones1 and Michael Varco1

1The George Washington University Milken Institute School of Public Health, Washington, DC

Pub. Date: June 30, 2025
View Full Text Full Text PDF (1601 KB) Full Text ePUB(1621 KB)

Cite this paper:
Judith Mueller, Carly Jones and Michael Varco. A Case Study: “Theranos - The White Elephant That Wanted to Be a Unicorn”. Journal of Behavioural Economics, Finance, Entrepreneurship, Accounting and Transport. 2025; 12(1):1-16. doi: 10.12691/jbe-12-1-1

Abstract

The Theranos case exemplifies a highly publicized failure in public health leadership that jeopardized patient safety and undermined public trust in blood testing diagnostics. This case study examines the leadership failures that led to Theranos's downfall and eventual closure in 2018 from Elizabeth Holmes's perspective as she reflects on her journey while standing trial in 2021. By adopting Kotter’s change management framework and incorporating deontological principles into her leadership style during her tenure as CEO of Theranos from 2003 until the scandal’s exposure in the Wall Street Journal in 2015, Holmes could have transformed Theranos into a success story. The recommendations provided are presented as an “Ethical Disruptor Roadmap”, which seeks to bolster Kotter’s structured framework with a foundation in deontological principles. This roadmap aims to guide emerging biotech companies that are developing similar blood testing technologies to avoid the “Theranos Effect," which has left a lasting (blood) stain on the industry.

Keywords:
Ethics Change Management Entrepreneurship Behavioral Ethics

Creative CommonsThis work is licensed under a Creative Commons Attribution 4.0 International License. To view a copy of this license, visit http://creativecommons.org/licenses/by/4.0/

References:

[1]  News, PBS. “On Third Day of Testimony, Elizabeth Holmes Admits Mistakes but Denies Deception.” PBS News, 24 Nov. 2021, https:// www.pbs.org/newshour/ nation/on-third-day-of-testimony-elizabeth-holmes-admits-mistakes-but-denies-deception Accessed 25 Jan. 2025.
 
[2]  Jones Sanborn, Beth. “Theranos Reaches $4.65 Million Settlement with Arizona Attorney General Office.” Healthcare Finance News, 18 Apr. 2017, www.healthcarefinancenews.com news/theranos-reaches-465-million-settlement-arizona-attorney-general-office. Accessed 27 Jan. 2025. Accessed 27 Jan. 2025.
 
[3]  Keown, Alex. “Federal Report Reveals Theranos Devices Often Failed Accuracy Requirements.” BioSpace, Apr. 2016, www.biospace.com/federal-report-reveals-theranos-devices-often-failed-accuracy-requirements. Accessed 28 Jan. 2025.
 
[4]  Fiore, Mark, and Jon Brooks. "The Rise and Fall of Theranos: A Cartoon History." KQED, 13 Oct. 2016, www.kqed.org/futureofyou/203018/the-rise-and-fall-of-theranos-a-cartoon-history. Accessed 1 Apr. 2025.
 
[5]  Jotwani, Rohan, et al. “Theranos Experinece Exposes Weaknesses in FDA Regulatory Discretion.” Clinical Pharmacology in Drug Development. Vol.6, no. 5, 2017. Pp.433-438. https:// pubmed.ncbi.nlm.nih.gov/ 28741304/ Accessed 24 Jan. 2025.
 
[6]  Carreyrou, John. Bad Blood: Secrets and Lies in a Silicon Valley Startup. S.L., Vintage, 2018. P. 32-34.
 
[7]  Carreyrou, John. Bad Blood: Secrets and Lies in a Silicon Valley Startup. S.L., Vintage, 2018. P. 85-86.
 
[8]  Carreyrou, John. Bad Blood: Secrets and Lies in a Silicon Valley Startup. S.L., Vintage, 2018. P. 8.
 
[9]  Carreyrou, John. Bad Blood: Secrets and Lies in a Silicon Valley Startup. S.L., Vintage, 2018.
 
[10]  Bilton, Nick. American Kingpin: The Epic Hunt for the Criminal Mastermind Behind the Silk Road. Portfolio, 2022.
 
[11]  Business Insider. "Theranos Adds Members to Scientific and Medical Advisory Board." Business Insider, Apr. 2016, https://www.businessinsider.com/theranos-adds-members-to-scientific-and-medical-advisory-board-2016-4. Accessed 10 Mar. 2025.
 
[12]  Sonnenfeld, Jeffrey A. “What makes great boards great.” Harvard business review vol. 80,9 (2002): 106-13, 126. https://pubmed.ncbi.nlm.nih.gov/12227143/ Accessed 1 April 2025.
 
[13]  Resnik, David B. “Openness versus Secrecy in Scientific Research Abstract.” Episteme (Edinburgh) vol. 2,3 (2006): 135-147. https:// pmc.ncbi.nlm.nih.gov/articles/ PMC2991133/#:~:text=Introduction,openness% 20and%20secrecy%20in%20science. Accessed 10 Mar. 2025.
 
[14]  “Hot startup Theranos has struggled with its blood-test technology.” The Wall Street Journal. October 16. https://www.wsj.com/articles/theranos-has- struggled-with-blood-tests-1444881901. Accessed 10 Mar. 2025.
 
[15]  United States Preventive Services Task Force. "Shared Decision Making About Screening and Chemoprevention." U.S. Preventive Services Task Force, May 2002, www.uspreventiveservicestaskforce.org/uspstf/about-uspstf/methods-and-processes/shared-decision-making-about-screening-and-chemoprevention. Accessed 6 Apr. 2025.
 
[16]  Bruenig, Elizabeth. “Opinion | Elizabeth Holmes, a Capitalist Fairy Tale.” Washington Post, 19 Mar. 2019, www.washingtonpost.com/opinions/ 2019/03/21/ elizabeth-holmes-capitalist-fairy-tale/. Accessed 25 Jan. 2025.
 
[17]  EQS Editorial Team. “Elizabeth Holmes and the Theranos Case: History of a Fraud Scandal.” EQS Integrity Line, 22 Nov. 2023, www.integrityline.com/ expertise/blog/ elizabeth-holmes-theranos/. Accessed 25 Jan. 2025.
 
[18]  Versel, Neil. “Theranos Doomsday Clock: A Full Timeline of Its Rise and Fall (Updated).” MedCity News, MedCity News, 5 Feb. 2016, medcitynews.com/ 2016/02/theranos-doomsday-clock-full-timeline-rise-fall/?rf=1. Accessed 24 Jan. 2025.
 
[19]  Carreyrou, John. “Hot Startup Theranos Has Struggled with Its Blood-Test Technology.” Wall Street Journal, 16 Oct. 2015, www.wsj.com/articles/ theranos-has-struggled-with-blood-tests-1444881901?mod=article_inline. Accessed 24 Jan. 2025.
 
[20]  O’Brien, Sara Ashley. “The Rise and Fall of Theranos: A Timeline.” CNN, 7 July 2022, www.cnn.com/ 2022/07/07/ tech/theranos-rise-and-fall/index.html. Accessed 24 Jan. 2025.
 
[21]  Forbes. “Elizabeth Holmes.” Forbes, 2024, www.forbes.com/ profile/elizabeth-holmes/. Accessed 25 Jan. 2025.
 
[22]  Neate, Rupert. “Elizabeth Holmes: From “next Steve Jobs” to Convicted Fraudster.” The Guardian, 4 Jan. 2022, www.theguardian.com/technology/ 2022/jan/04/ elizabeth-holmes-from-next-steve-jobs-to-convicted-fraudster. Accessed 25 Jan. 2025.
 
[23]  Valinsky, Jordan. “Elizabeth Holmes Shaves More Time off Her Sentence.” CNN, CNN, 7 May 2024, www.cnn.com/ 2024/05/07/tech/elizabeth-holmes-prison-release-date/index.html. Accessed 25 Jan. 2025.
 
[24]  “Exploring Ethical Issues in Public Health Practice.” Kent, 30 May 2024, onlinedegrees.kent.edu/college-of-public-health/community/exploring-ethical-issues-in-public-health-practice. Accessed 25 Jan. 2025.
 
[25]  The Editor(s) and The Author(s). Narrative Ethics in Public Health: The Value of Stories. Springer International Publishing, 2022.
 
[26]  Arizona Attorney General Press Release, Attorney General Mark Brnovich Announces $4.65 Million Settlement with Theranos, April 18, 2017: https:// www.azag.gov/press-releases/ ag-brnovich-obtains-465-million-arizonans -who-purchased-theranos-blood-tests Accessed 18 Mar. 2025.
 
[27]  The Washington Post, Tylenol’s Maker Shows How to Respond to Crisis, October 11, 1982: https:// www.washingtonpost.com/ archive/ business/1982/10/11/ tylenols-maker-shows-how-to-respond-to-crisis/bc8df898-3fcf-443f-bc2f-e6fbd639a5a3/ Accessed 18 Mar. 2025.
 
[28]  ABC News, Theranos whistleblowers filed complaints out of fear of patients’ health, March 13, 2019: https:// abcnews.go.com/ Business/theranos-whistleblowers-filed-complaints-fear-patients-health-started/story?id=61030212 Accessed 18 Mar. 2025.
 
[29]  Center for Creative Leadership. What is Inclusion in the Workplace? A Guide for Leaders. https:// www.ccl.org/ articles/leading-effectively-articles/what-is-inclusion-in-the-workplace-a-guide-for-leaders/ Accessed 18 Mar. 2025.
 
[30]  Catherine Cote. 4 Examples of Ethical Leadership in Business. Harvard Business School. September 14, 2023. https:// online.hbs.edu/blog/ post/examples-of-ethical-leadership Accessed 18 Mar. 2025.
 
[31]  Kotter, John P. Leading Change. Harvard Business Review Press, 1996. https://irp-cdn.multiscreensite.com/ 6e5efd05/files/ uploaded/ Leading%20Change.pdf. Accessed 23 Mar. 2025.
 
[32]  Appelbaum, Steven H., Sally Habashy, Jean-Luc Malo, and Hisham Shafiq. “Back to the Future: Revisiting Kotter’s 1996 Change Model.” Journal of Management Development, vol. 31, no. 8, 2012, pp. 764-782.
 
[33]  Gerstner, Louis V. Who Says Elephants Can't Dance? Inside IBM's Historic Turnaround. HarperBusiness, 2002.
 
[34]  Immelt, Jeff. “How I Remade GE—And What I Learned Along the Way.” Harvard Business Review, vol. 95, no. 5, 2017, pp. 42-51. https://hbr.org/2017/09/how-i-remade-ge. Accessed 23 Mar. 2025.
 
[35]  Alexander, Lester F. "Fake It Till You Fail: Elizabeth Holmes and the Theranos Story." Darden Ideas to Action, 26 Feb. 2025, ideas.darden.virginia.edu/theranos-darden-case. Accessed 2 Apr. 2025.
 
[36]  Bolton, Chuck. "How Moderna’s CEO Stephane Bancel Stays Relevant and Thrives in a Hyper-Growth Environment." The Bolton Group, 10 Apr. 2023, theboltongroup.com/ how-modernas-ceo-stephane-bancel-stays-relevant-and-thrives-in-a-hyper-growth-environment/. Accessed 2 Apr. 2025.
 
[37]  Collins, James C., and Jerry I. Porras. Built to Last: Successful Habits of Visionary Companies. Harper Business, 1994.
 
[38]  Johnson & Johnson. Our Credo. Johnson & Johnson, 2023, www.jnj.com/credo. Accessed 23 Mar. 2025.
 
[39]  Kaplan, David. "Tylenol Made a Hero of Johnson & Johnson: The Recall That Started Them All." PRWeek, 15 Sept. 2002. https://www.prweek.com/ article/127178/ tylenol-made-hero-johnson- johnson-recall-started. Accessed 23 Mar. 2025.
 
[40]  Bancel, Stéphane. “Moderna’s CEO on Developing a COVID-19 Vaccine in Record Time.” Harvard Business Review, May–June 2021. https://hbr.org/2021/05/moderna-ceo-on-developing-a-covid-19-vaccine-in-record-time. Accessed 23 Mar. 2025.
 
[41]  Moderna, Inc. Moderna Shares Phase 3 COVE Study Results in The New England Journal of Medicine. 30 Dec. 2020. https:// investors.modernatx.com/news/ news-details/ 2020/Moderna- Shares-Phase-3-COVE-Study-Results-in-The-New-England-Journal-of-Medicine/default.aspx. Accessed 23 Mar. 2025.
 
[42]  U.S. House of Representatives, Committee on Energy and Commerce. Pathway to a Vaccine: Efforts to Develop a Safe, Effective and Accessible COVID-19 Vaccine. Testimony of Dr. Stephen Hoge, 21 July 2020. https:// energycommerce.house.gov/committee-activity/hearings/hearing-on-pathway-to-a-vaccine. Accessed 23 Mar. 2025.
 
[43]  Nadella, Satya. Hit Refresh: The Quest to Rediscover Microsoft's Soul and Imagine a Better Future for Everyone. HarperBusiness, 2017.
 
[44]  Edmondson, Amy C. “Psychological Safety and Learning Behavior in Work Teams.” Administrative Science Quarterly, vol. 44, no. 2, 1999, pp. 350-383. https:// web.mit.edu/ curhan/www/ docs/Articles/15341_Readings/Group_Performance/Edmondson%20Psychological%20safety.pdf. Accessed 23 Mar. 2025.
 
[45]  Jumper, John, et al. "Highly Accurate Protein Structure Prediction with AlphaFold." Nature, vol. 596, 2021, pp. 583–589. https://www.nature.com/articles/s41586-021-03819-2. Accessed 23 Mar. 2025.
 
[46]  De Fauw, Jeffrey, et al. "Clinically Applicable Deep Learning for Diagnosis and Referral in Retinal Disease." Nature Medicine, vol. 24, no. 9, 2018, pp. 1342–1350. https:// www.nature.com/ articles/s41591-018-0107-6. Accessed 23 Mar. 2025.
 
[47]  UK National Health Service (NHS). Artificial Intelligence and Healthcare Innovation: DeepMind's Collaboration with NHS. NHS Digital, 2020, www.nhs.uk/deepmind-ai-healthcare.Accessed 23 Mar. 2025.
 
[48]  Garde, Damian. "Moderna, Looking Past COVID-19, Lays Out a Plan for Expansion." STAT News, 8 Mar. 2022. https:// www.statnews.com/2022/03/08/ moderna-looking-past-covid-19-lays -out-a-plan-for-expansion/. Accessed 23 Mar. 2025.
 
[49]  Moderna, Inc. Our Pipeline. https://www.modernatx.com/pipeline. Accessed 23 Mar. 2025.
 
[50]  Johnson & Johnson. Our Credo. https:// www.jnj.com/credo/. Accessed 23 Mar. 2025.
 
[51]  Johnson & Johnson. Ethics & Compliance. https:// www.jnj.com/ ethics-compliance. Accessed 23 Mar. 2025.
 
[52]  Treviño, Linda Klebe, Gary R. Weaver, and Scott J. Reynolds. "Behavioral Ethics in Organizations: A Review." Journal of Management, vol. 32, no. 6, 2006, pp. 951-990.
 
[53]  Beauchamp, Tom L., and James F. Childress. Principles of Biomedical Ethics. 8th ed., Oxford University Press, 2019.
 
[54]  Singer, Peter A., et al. "Ethics Committees and Consultants." Canadian Medical Association Journal, vol. 157, no. 4, 1997, pp. 391–397. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1227779/. Accessed 23 Mar. 2025.
 
[55]  Moderna, Inc. Moderna Shares Phase 3 COVE Study Results in The New England Journal of Medicine. 30 Dec. 2020. https://investors.modernatx.com/news/news-details/2020/Moderna-Shares-Phase-3-COVE-Study-Results-in-The-New-England-Journal-of-Medicine/default.aspx. Accessed 23 Mar. 2025.
 
[56]  Guttman, Nurit, and Rickie Solari. "Communicating Health Information: Ethics and Equity in Health Marketing." The American Journal of Bioethics, vol. 7, no. 11, 2007, pp. 24–26.
 
[57]  Capron, Alexander M. "Administrative Oversight of Ethics and Compliance Programs in Health Care Organizations." The Journal of Law, Medicine & Ethics, vol. 27, no. 1_suppl, 1999, pp. 49–58.
 
[58]  U.S. Department of Health and Human Services, Office of Inspector General. "Compliance Program Guidance for Pharmaceutical Manufacturers." Federal Register, vol. 68, no. 86, 2003, pp. 23731–23743. https:// oig.hhs.gov/ documents/ compliance-guidance/ 793/ 050503FRCPGPharmaceuticalManufacturers.pdf. Accessed 23 Mar. 2025.
 
[59]  Resnik, David B. "Scientific Research and the Public Trust." Science and Engineering Ethics, vol. 17, no. 3, 2011, pp. 399–409.
 
[60]  U.S. Food and Drug Administration. Drug Development and Approval Process. U.S. Department of Health and Human Services, 2020. www.fda.gov/ patients/learn-about-drug-and-device-approvals/ drug-development-process. Accessed 23 Mar. 2025.
 
[61]  U.S. Department of Health and Human Services. Scientific Integrity Policy. https://www.hhs.gov/about/agencies/assistant-secretary-for-health/scientific-integrity/index.html. Accessed 23 Mar. 2025.
 
[62]  Epley, Nicholas, and Amit Kumar. "How to Design an Ethical Organization." Harvard Business Review, vol. 97, no. 2, 2019, pp. 144–150.
 
[63]  U.S. Department of Health and Human Services, Office for Civil Rights. Summary of the HIPAA Privacy Rule. HHS.gov, 26 July 2013, https://www.hhs.gov/hipaa/ for-professionals/privacy/ laws-regulations/ index.html. Accessed 23 Mar. 2025.
 
[64]  “The Role of Lab-Developed Tests in the in Vitro Diagnostics Market.” Pew, The Pew Charitable Trusts, 22 Oct. 2021, www.pewtrusts.org/ en/research-and-analysis/ reports/2021/10/ the-role/of/ lab-developed-tests-in-the-in-vitro-diagnostics-market. Accessed 15 March 2025.
 
[65]  Ruger, Jennifer Prah. "Global Health Justice and Governance: The Importance of Ensuring Fair Access to Medicines." The Milbank Quarterly, vol. 101, no. 1, 2023, pp. 25–56.
 
[66]  Kahneman, Daniel, Dan Lovallo, and Olivier Sibony. "Before You Make That Big Decision..." Harvard Business Review, vol. 89, no. 6, 2011, pp. 50-60. https://hbr.org/ 2011/06/ the-big-idea-before- you-make-that-big-decision. Accessed 10 Mar. 2025.
 
[67]  Goleman, D. (1998). Working with emotional intelligence. Bantam Books.
 
[68]  Mayer, J. D., Salovey, P., & Caruso, D. R. (2004). Emotional intelligence: Theory, findings, and implications. Psychological Inquiry, 15(3), 197–215.
 
Manuscript template