Question
1.1 Discuss any FIVE (5) leadership failures of 'The company founder and former CEO, Elizabeth Holmes'. Identify FIVE (5) elements of leadership and evaluate the outcome of the organisation if each element was used correctly by the former CEO. (20) 1.2 Explain how each of the FIVE (5) types of power could have been used by the CEO to influence employees in the correct ethical work culture
Ask by Mcfarlane Schneider.
Mar 30,2025 09:12
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Answer
### 1.1 Leadership Failures and Alternative Outcomes
Elizabeth Holmes, the founder and former CEO of Theranos, faced several leadership failures that negatively impacted the organization. Here are five of them along with the potential outcomes if each leadership element had been used correctly:
1. **Lack of Integrity and Ethical Leadership**
- **Failure:** Holmes made misleading claims about the company's technology.
- **Leadership Element – Integrity:** If she had maintained honesty, the company would have built trust with stakeholders, leading to more credible marketing and a better reputation.
2. **Poor Decision-Making and Risk Management**
- **Failure:** She approved product rollouts based on unproven technology.
- **Leadership Element – Decision-Making:** With better risk assessment, the company could have avoided costly failures and legal issues, ensuring more stable growth.
3. **Inadequate Communication**
- **Failure:** Holmes did not foster open communication within the company.
- **Leadership Element – Communication:** Clear and transparent communication would have empowered employees to voice concerns, leading to better problem-solving and accountability.
4. **Failure to Empower Employees**
- **Failure:** She centralized decision-making, limiting employee input.
- **Leadership Element – Empowerment:** Empowering employees would have encouraged innovation and better decision-making, enhancing the company's adaptability.
5. **Overpromising Vision Without Substantiation**
- **Failure:** Holmes promoted unrealistic claims about revolutionizing healthcare diagnostics.
- **Leadership Element – Vision:** A realistic and credible vision would have aligned the organization's efforts, building trust and motivation among employees and stakeholders.
### 1.2 Ethical Use of Five Types of Power
Elizabeth Holmes could have effectively used the following types of power to influence employees and foster an ethical work culture:
1. **Legitimate Power**
- **Usage:** Establish clear ethical guidelines and policies.
- **Ethical Influence:** By setting formal standards, employees understand expected ethical behavior, promoting accountability.
2. **Reward Power**
- **Usage:** Recognize and incentivize ethical behavior.
- **Ethical Influence:** Incentives encourage employees to adhere to ethical practices, fostering a culture of integrity.
3. **Coercive Power**
- **Usage:** Enforce ethical standards with fair discipline.
- **Ethical Influence:** Fair enforcement deters unethical behavior without fostering fear, maintaining a respectful workplace.
4. **Expert Power**
- **Usage:** Share credible insights and guide ethical decision-making.
- **Ethical Influence:** Demonstrating expertise builds trust and encourages employees to follow ethical practices.
5. **Referent Power**
- **Usage:** Model ethical behavior and show genuine concern for employees.
- **Ethical Influence:** Admiration and identification with the leader promote ethical conduct and a cohesive team.
By addressing these leadership elements and power types, Holmes could have transformed the organization into a more ethical and sustainable entity.
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Bonus Knowledge
One of the notable leadership failures of Elizabeth Holmes was her overconfidence, which led to the unrealistic promise of revolutionary blood-testing technology that ultimately didn't deliver. By failing to acknowledge the limitations of her product, she undermined trust among her stakeholders, employees, and investors. Secondly, poor communication played a significant role; vital information about the technology’s capabilities was downplayed or misrepresented, causing misalignment within the team and creating a culture built on deception instead of transparency.
Had elements such as empathy been prioritized, the company could have fostered a supportive environment that encouraged open dialogue and honest feedback, potentially leading to better decision-making. Additionally, strong ethical standards could have instilled a culture of accountability, helping to rectify issues early and maintain stakeholder trust. Consistent visioning might have aligned team efforts towards realistic goals, which could have averted the company’s eventual collapse. Lastly, effective collaboration could have harnessed diverse insights, avoiding tunnel vision that often accompanies great ambition.
Transformational power could have inspired employees through shared vision and passion for the project, building a strong internal culture. Expert power, derived from knowledge about biotechnology, could have educated the team, promoting a better understanding of the limitations of their technology. Reward power could motivate employees to adhere to ethical practices by linking incentives to honest reporting and ethical behavior. Coercive power, when used judiciously, could establish essential compliance with ethical standards, ensuring patterns of behavior align with company values. Lastly, legitimate power, stemming from her position, could have been leveraged to set clear expectations, fostering accountability and ethical conduct across the organization.
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