MBIS5010 Professional Practice in Information Systems Case Study 3 Sample
Assessment Description
This assessment task assesses students’ ability to apply theoretical learning to practical, real-world situations. The aim is to help students to understand the benefits of ethical values in their professional life. Please refer to the case study in page 3 for details. Your essay should be a synthesis of ideas researched from a variety of sources and expressed in your own words. It should be written in clear English and be submitted at the end of week 2 in electronic format as either a Word document or a pdf file. This electronic file will be checked using Turnitin for any evidence of plagiarism. You are expected to use references in the normal Harvard referencing style.
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Referencing and Plagiarism It is essential to use IN TEXT referencing. If you are using the exact words from a reference then you must use quotation marks. You can use Harvard Style referencing, with a listing at the end of the essay.
http://www.citethisforme.com/harvard-referencing Remember that this is a Turnitin assignment and plagiarism will be subject to severe penalties. Please refer to the AIH Academic Misconduct Policy: https://aih.nsw.edu.au/wp- content/uploads/2017/11/StudentAcademic-Misconduct-Policy.pdf
Theranos Case Study
In 2003, Stanford University student Elizabeth Holmes founded the health care company Theranos. The goal of the company was to revolutionize health care. Beginning with the goal of creating a patch to deliver drugs, the company instead shifted focus to developing a simple and effective method for blood diagnosis. Holmes dropped out of Stanford and began raising millions of dollars in funding. The company claimed that its technology could offer over 240 tests from just a prick of the finger. Test results could be delivered to a patient’s phone in hours, and a single test would cost less than half of the reimbursement rate of Medicare and Medicaid. Blood could be diagnosed easily without the need for many vials of blood drawn from patients’ veins or expensive lab work. By 2014, the company was valued at $9 billion, of which Holmes held a majority stake. Many investors backed the company based on the promise of the technology. Holmes received glowing profiles in news magazines, was featured on television shows, and presented keynote addresses at tech conferences. But the excitement of investors and the promise of the technology did not translate into success.
Operating largely in a cloak of secrecy, the company could never validate its claims about its blood sampling technology, and many of its lab results went unchecked. In 2015, journalist John Carreyrou investigated the company for an article in The Wall Street Journal. He disclosed problems in the company’s equipment and testing methods. He found that the company did not even use its own technology in tests and often relied on older technology from other companies. Carreyrou also found that the company’s own much-hyped blood sampling technology was not as accurate as Holmes and company had claimed. After publication of Carreyrou’s article, others publicly came forward about the inaccuracy of results they had received from Theranos. Holmes disagreed with the reporting, saying that Carreyrou had the story wrong. She stated, “This is what happens when you work to change things, and first they think you’re crazy, then they fight you, and then, all of a sudden, you change the world.” Holmes continued to push her company’s claims and her own narrative of personal success. The company continued to show off its technology at conferences. The Food and Drug Administration and the Centers for Medicare & Medicaid Services opened investigations into Theranos. Under scrutiny, the company faced lawsuits from investors, pharmaceutical partners, and the state of Arizona, where it provided bloodtesting directly to consumers. In 2018, the Securities and Exchange Commission (SEC) charged Theranos, Holmes, and former president Ramesh Balwani with massive fraud.
According to a statement from the SEC, “Theranos, Holmes, and Balwani made numerous false and misleading statements in investor presentations, product demonstrations, and media articles by which they deceived investors into believing that its key product...could conduct comprehensive blood tests from finger drops of blood, revolutionizing the blood-testing industry.” In March 2018, Holmes reached a settlement with the SEC, without admitting or denying any wrongdoing. She agreed to pay a $500,000 penalty, return her 18.9 million shares, give up voting control of Theranos, and be prohibited from serving as director of a public company for 10 years. Jina Choi, director of the SEC’s San Francisco Regional Office, stated, “The Theranos story is an important lesson for Silicon Valley... Innovators who seek to revolutionize and disrupt an industry must tell investors the truth about what their technology can do today, not just what they hope it might do someday.” In June 2018, Holmes and Balwani were indicted on charges of fraud by the United States attorney’s office in San Francisco. Before criminal charges were filed, Holmes stepped down as CEO of Theranos. Holmes and Balwani both pleaded not guilty and await trial as of June 2018. Technology consultant Paul Saffo said in response to the indictment, “There is one cardinal rule in Silicon Valley that most people never realize, and this is never ever breathe your own exhaust.” He continued, “[Holmes] is someone who is so deeply self-deluded by her optimism and faith in herself... And delusion is contagious.”
From Ethics Unwrapped
Question
Drawing on any of the ethical theories and/or ACS professional code of conduct, critically analyse the ethical issues surrounding the actions of Elizabeth Holmes and Ramesh Balwani. Your report should cover the health, economic, legal and societal implications of Theranos’ actions.
Solution
Introduction
Business information system is a set of process applying IT infrastructure within an organization, which helps to generate and disseminate required information to relevant stakeholders and helps in making business decision (Müller, Vorraber and Slany 2019). Maintaining professional code of conduct is extremely necessary in information system for an organization to run sustainably in long run. University Assignment Help, In the case study organization “Theranos”, wrong doing in information processing can be seen. This report will critically analyse the ethical issue occurred in the case organization and also depicts its associated implication on health, economies, legal system and society. Finally, the study will recommend an alternative course of action, which organizations in general should adhere to run legally and ethically.
Critical analysis of Ethical Issue
ACS code of conduct sets highest standard of ethics and business excellence for any profession, which needs to be maintained structure in order to protect public interest. According to Nagahawatta and Warren (2020), primacy of public interest code protects the interest of stakeholder over any personal, sectional and private interest. It safeguards interest of immediate stakeholder of any business, where personal interest of business should not conflict with stakeholder interest. However, in this case organization, the owner Elizabeth Holmes and former president Ramesh Balwani misled their statement in investor presentation just to meet their own personal interest of getting fund from investors (Thomas 2022). They are not at all concerned about the interest of the investors for giving return on investment. It simply shows unethical doing and cheating of the organization with their stakeholders. On the other hand, Gal, Jensen and Stein (2020) argues that virtue ethics represent one person ethical only when he/she practices honesty and generosity. As per this ethics, a person can do good things only when he/she is a good person and be good in every doing. However, Elizabeth Holmes and Ramesh Balwani showed high level of dishonesty by presenting false claim and disseminating wrong information about his company to public, investors and even in media. The claim of using advanced technology in blood test for doing over 240 tests from finger drops of blood proved to be false in 2015 by journalists and other authorities. Hence, as per virtue ethics also, the action of the owner and president was unethical and even unlawful.
Implications of Theranos’ Actions
Acs.org.au (2014), stated that competence code of ACS code of conduct allows an organization or professional to perform one function only if they are competent with their skills and knowledge. They should always be aware of their limitation and obtain additional expertise for perform task successfully. However, in Theranos, the own made false claim of using advanced technology for blood test, where they promised to do numerous blood test with just a fingertip of blood and that too with very less cost. While a report was published by journalist John Carreyrou, he disclosed that the company does not have any such technology and they do not even use their own technology for the test. Moreover, he also investigated that most of their test reports are wrong, which is again playing with health condition of patients. Such wrong and false blood report might lead to wrong treatment of patients, which can be dangerous their health condition.
According to Häyry (2021), stated that as per Utilitarianism theory, an action can be moral and ethical only if fosters happiness and greatest amount of good among people. Any action fostering unhappiness and harm is immoral and unethical. In this company, the owner presented false information and wrong product demonstration to the investor with a false hope of gaining profit. Later on, when it proved to be fraud company, the hope of the investors of making economic profit went in vain. Hence, the intension of the organization was just to gain own benefit of getting funds and making economic loss of the investor with a fraud business. On the other hand, Kovac (2021), opined that honesty code of ACS code of conduct suggest a business not to breach public trust or any specific trust of any stakeholder. Organizations should not mislead the stakeholders regarding the suitability of product and services offered by them. However, here in this case, the owner of the organization misled the investors, business partners and customers with wrong product demonstration and false claim of provide advanced blood testing technology (Justice.gov 2022). Hence, such fraud business and misleading business information was investigated and unlawful and the associated stakeholders filed lawsuits against the organization. From the case study, it is evident that Theranos did not maintain professionalism in their conduct by showing false claim and doing wrong test of the clients. Hence, in this context, such fraud business might leave a negative message about the business within Society. The potential business entrepreneurs might get wrong message of conducting business, which is not good for the society. Moreover, it might also leave mistrust among the people, where it would be difficult for them to trust on any such business again.
Recommendation in Organizational Settings
Any organization, who wants to be sustainable in long run must follow all the ethical and legal obligations set by ACS code of conduct, while communicating any information with the stakeholders (Acs.org.au 2014). Here, in this case, instead of disseminating false information about business function, Theranos should have communicate authentic information and right product demonstration being within their capacity. Moreover, as per the Utilitarianism theory discussed above, the business was operating unethically misleading the investors and other business partners. It hampered business in legal ground leading to penalty and legal obligations for the organizations. Hence, business should always be aware of their legal obligations with a good intension of meeting public interest over personal interest (Adu, Flynn and Grey 2022). Apart from that, any professional or organization should offer product and service only if they have sufficient level of expertise for the same (Karimikia, Singh and Donnellan 2022). Here, when Theranos did not have that advanced technology of blood test, they either should not have promised such service offerings or else they should have obtained additional expertise for the same.
Conclusion
While concluding the report, it can be said that the of Theranos conducted an ethical and illegal doing while conducting and communicating information about their business. As per ACS code of conduct, making false claim, disseminating misleading information and demonstrating wrong product and service was unlawful. Moreover, as per Utilitarianism theory also the organization seems to a fraud organization, where it used to provide wrong blood test report to clients. Hence, any business must oblige to ACS code of conduct and ethical framework for its sustainability in long run.
Reference List
Acs.org.au., 2014. ACS code of professional conduct, Acs.org.au. Available at: https://www.acs.org.au/content/dam/acs/rules-and-regulations/Code-of-Professional-Conduct_v2.1.pdf.
Adu, D.A., Flynn, A. and Grey, C., 2022. Executive compensation and sustainable business practices: The moderating role of sustainability?based compensation. Business Strategy and the Environment, 31(3), pp.698-736.
Gal, U., Jensen, T.B. and Stein, M.K., 2020. Breaking the vicious cycle of algorithmic management: A virtue ethics approach to people analytics. Information and Organization, 30(2), p.100301.
Häyry, M., 2021. Just better utilitarianism. Cambridge Quarterly of Healthcare Ethics, 30(2), pp.343-367.
Justice.gov (2022) U.S. v. Elizabeth Holmes, et al.., Northern District of California. Available at: https://www.justice.gov/usao-ndca/us-v-elizabeth-holmes-et-al (Accessed: 30 September 2023).
Karimikia, H., Singh, H. and Donnellan, B., 2022. How the Personalities and Behaviors of Information Systems Professionals Influence the Effectiveness of Information Systems Departments. Information Systems Management, 39(4), pp.305-344.
Kovac, J., 2021. American chemical society codes of ethics: Past, present, and future. In Ethics of Chemistry: From Poison Gas to Climate Engineering (pp. 487-506).
Müller, M., Vorraber, W. and Slany, W., 2019. Open principles in new business models for information systems. Journal of Open Innovation: Technology, Market, and Complexity, 5(1), p.6.
Nagahawatta, R. and Warren, M., 2020. Code of Ethical Practice and Cyber Security of Cloud Context: A Study Perspective of IT Authorities in SMEs. In Conference of the Australasian Institute of Computer Ethics (pp. 18-27).
Thomas, D. (2022) Theranos scandal: Who is Elizabeth Holmes and why was she on trial?, BBC News. Available at: https://www.bbc.com/news/business-58336998 (Accessed: 30 September 2023).
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