Narcissistic CEOs and Organizations: The Case of Elizabeth Holmes

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Narcissistic CEOs and Organizations:

The Case of

Elizabeth Holmes

and Theranos

By Céline Veldman

University of Groningen Faculty of Economics and Business

Bachelor's Thesis IB (EBB737B10)

Research Paper for Pre-MSc IB&M (EBS014A10)

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Abstract

The central research question which is been conducted is as follows: Was CEO ,Elizabeth

Holmes, a narcissistic leader and therefore making Theranos a narcissistic organization as result? The methods used to answer this question is qualitive research. The research show that

both the CEO and the organization are narcissistic. Holmes met seven from the nine DSM-IV characteristics and within the organization seven of the 11 criteria are present. Holmes has a high level of narcissism and therefore has a combination of a grandiose and arrogance

narcissism type and is a reactive narcissistic CEO. Theranos has a medium level of narcissism because the organization just met the number of criteria to diagnose narcissism. To dive even deeper in the Elizabeth Holmes and Theranos case a research plan has been composed. This plan can be used for further research.

This research is made because of the resent fraud accusations and defunct of Theranos. This research is relevant for consequences mentioned above, because there is a link between ‘Bad’ leadership and dysfunctional performance within an organization. Therefore, it is relevant to know if narcissism was present and perhaps stimulated the consequences that Holmes and Theranos are now facing.

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1. Introduction and Central Research Question

The first paragraph is a brief introduction to the case and the central research question that result from it. It is the framework of this research paper.

1.1 Initial motive

‘The focus on ‘good’ leadership may be seen to be rooted in a view that any other form of behavior is not leadership’ (Higgs, 2009: 167). But recent corporate implosions have raised concerns about the impact of ‘bad’ leadership. The cause of leadership failure and derailment as a result of a combination of personal flaws and performance shortfalls.

‘Bad’ leadership contributes to dysfunctional performance within an organization. It can result in short-term performance and long-term problems and thus dysfunctional performance. Leaders have a major impact on the performances of individuals, groups and the organization. On the long term ‘bad’ behavior will for example destroy the ability of people to work

together productively and create a toxic climate within the organization. The assertions of leadership are based on the basis of case studies of CEOs. CEOs invest a great part of themselves into their business decisions and organizations, and failure of CEOs to deliver performance have led to a new concept ‘narcissistic leadership’. Negative aspects of narcissism can create ‘blame’ and ‘toxic’ cultures within the organization, abuse of power, unethical behavior an organizational collapse (Higgs, 2009). Not only a CEO, but also an organization can be narcissistic. In a narcissistic organization a higher level of self-serving bias is present which limits close relationships and employees take credit for success from others but blame them if they make failures. The organization is overconfident in its abilities, make risky bets/ investment decisions, say that they are better than others, have impulsivity across a range of behaviors and as a result the organization is losing profit (Campbell et al., 2011).

1.2 Problem description and analysis

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the organizational climate which can lead to a loss of profit, but also narcissistic organizations which makes risky investment decisions and say that they are better than others contribute to these losses. For this research paper the Elizabeth Holmes and Theranos case has been chosen. Holmes had founded Theranos in 2003 when she was only 19 years old. She

accomplished to develop a blood-test that uses a tiny bit of blood and would deliver very fast results. The company grew really fast, but in 2018 Holmes was accused of fraud because she covered up shortcomings and inaccuracies of Theranos technology which were exposed. Therefore, the company defunct in September 2018 (Leskin, 2019). It is a recent case which means that little research has been done yet and Holmes made risky decisions and is a rule breaker for breaking the law. Also the organization made risky decisions because of using shortcomings and inaccuracies technology’s. Therefore, these case has been chosen, see appendix I for more detailed information.

Based on the above the following central research question is conducted: Was CEO ,Elizabeth

Holmes, a narcissistic leader and therefore making Theranos a narcissistic organization as result?

The following conceptual model is made:

Based on the nine criteria the study will conduct if Holmes is a narcissistic leader. There is a positive influence on the organization, this indicates that Theranos is most likely narcissistic, to determine if this is true 11 criteria will be used to conduct if Theranos is a narcissitic organization.

1.3 Research questions

There are two types of research questions which are relates to each other. The first seven question are about the theory of narcissism these are:

1. What is narcissism? – Description and Definition

2. What are the characteristics or symptoms, and types of narcissism? 3. What is a narcissistic leader?

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5. How does a narcissistic leader influence the organization (process)?

6. What are the (short-term and long-term) effects of this influence: on other parties, on strategy, performance, etc. (outcomes)?

7. How can a narcissistic leader and organization be identified, diagnosed and measured?

The questions mentioned above have to be answered first because these will help to answer the case questions. The case questions are about Theranos and the CEO, Elizabeth Holmes, if they are narcissistic yes or no. Therefore, it is necessary to know what a narcissistic leader is and what the symptoms are. The case questions are:

8. Was Elizabeth Holmes a narcissistic leader?

9. Was Theranos a narcissistic organization? (Were the short-term and long-term effects of CEO narcissism present in Therano?)

1.4 Methodology

In the second chapter a literature review will be conducted, here the theoretical and case questions will be answered on the basis of secondary data, such as scientific articles,

magazines like the guardian and books. Chapter 3 contains hypotheses which are based on the conclusions from the literature. Next on, you will find the research plan where the information collected in chapter two is used. The research method is briefly discussed and the data

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2. Literature review

In this chapter the theoretical question will be answered through scientific articles, and the case questions will be answered through online articles, websites and books.

2.1 Theoretical concepts 2.1.1 Narcissism

Narcissism is ‘a pervasive pattern of grandiosity (in fantasy or behavior), need for admiration, and lack of empathy, beginning by early adulthood and present in a variety of contexts’ (Rijsenbilt, 2011: 181). Narcissism can be differentiated in clinical and subclinical. The clinical literature conceptualize narcissism as a personality disorder (NPD). This refers to an enduring and inflexible character structure which is associated with grandiosity, a lack of empathy and a desire of admiration. Here the person cause distress or impairment and suffers and seeks psychotherapeutic help. A person with subclinical narcissism does not suffer but others may. These individuals can be haughty, lack empathy, exploit others and have an inordinate sense of entitlement, but still can feel okay about him or herself and have

reasonable relationships and are performing at work reasonable well, then this would not be considered NPD (Campbell et al., 2011).

2.1.2 Narcissism, characteristics, symptoms and types

According to the DSM-IV there are nine characteristics of narcissism. Narcissism is present if five (or more) of the following nine characteristics are met: (1) Has a grandiose sense of self-importance (e.g., exaggerates achievements and talents, expects to be recognized as superior without commensurate achievements). (2) Is preoccupied with fantasies of unlimited success, power, brilliance, beauty, or ideal love. (3) Believes that he or she is "special" and unique and can only be understood by, or should associate with, other special or high-status people (or institutions). (4) Requires excessive admiration. (5) Has a sense of entitlement, i.e.,

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Within narcissism there are a couple of types which can be identified. The two primary forms of narcissism are the grandiose and the vulnerable narcissism. Vulnerable narcissism contains of someone who is hostile, thinks the world is unfairly, stacked against him/her, is high psychological entitlement bus also has low self-esteem, is depressed and anxious. The grandiose narcissist is the ‘classic’ narcissist in the workplace, especially at the CEO level. Characteristics are extravert, dominant, attention seeking, interpersonally skilled and

charming, unwilling to take criticism, lacking in true empathy and haughty (Campbell et al., 2011). According to Godkin & Allcorn (2009) there are two more types of narcissism at the workplace, namely the normal narcissism and extraordinary narcissism. The normal one is a healthy narcissism. Extraordinary narcissism are types that are pathological in nature which can be divided in three forms: arrogant, shy and psychopathic. Arrogant narcissism contains the following characteristics: inflated, vulnerable self-esteem, grandiosity, strong reactions to criticism and defeats, hyper-reactive, strong feelings of anger, mood variations, interpersonal relations, arrogant and haughty attitude, entitled, controlling and impaired empathy. Arrogant narcissism has overlapping with grandiose narcissism therefore, these will be combined and used for this essay, because grandiose narcissist are often common at the CEO level.

2.1.3 What is a narcissistic leader?

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type. In such organizations a Heroic Management usually occurs. Here managers are much more important than the others who develop products etc. Everyone implements the steps which are told by the leader (Mintzberg, Simons & Basu, 2002).

2.1.4 What is a narcissistic organization?

Organizational disorders are thought of as themes and artifacts of organizational life and organizational culture. ‘They are part of the substance of both the organization in mind and the portion of organization that is represented by identifiable and concrete features’ (Godkin & Allcorn, 2009: 45). There are 11 criteria to diagnose an arrogant organizational disorder. Seven of the 11 DSM-IV criteria must be present: (1) Exceptional pride is held for the

organization, its accomplishments and great hope is held for future successes. Leaders see few limitations regarding what may be accomplished and are not inhibited as to how to

accomplish goals. (2) Feelings of exceptional entitlement support explosiveness of others, customers and the public interest. (3) When excessive pride is threatened and the pursuit of goals frustrated envy and rage arise. The leader or management group becomes hyperactive and willing to expend limitless time and energy to succeed and win out over rivals including aggression often tinged with sadism and revenge. (4) There is a history of firings and

demotions and of non-supporters and resistors being banished to internal organizational Siberias. Resistance is a threat and will not be tolerated. (5) Management by intimidation is common. (6) Fear suppresses accurate reality testing and creativity. (7) Filtered information flows alter organizational reality and magical thinking is present. Operating problems it may be seemingly thought will pass without taking action to resolve them. It is too dangerous to confront management behavior that contributes to problem generation and perpetuation. (8) Others are frequently blamed and scapegoated. (9) The sense of mood within the organization is unpredictable where one day a great success is celebrated and a week later there exists despair over not achieving the smallest of goals. (10) Many in the organization are alienated from the organization and its leadership group preferring to hide out in their foxholes (offices and cubicles). (11) In and out group dynamics are polarized and there is considerable

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2.1.5 How does a narcissistic leader influence the organization?

A CEO identifies and defines the strategic issues to be an opportunity or a threat. The CEO had disproportionate and even dominating influence on the top management output and would provide a large board because this is easier to control. There are also more frequent board changes within the board. The CEO also plays a crucial role in the directors’ selection procedure, and can replace a powerful board by board directors who follow the CEO in the debate and discussions which can have negative impact on the organization. The existence of a nominating committee does not change the CEO influence in the selection process, because the nominating committee receives their input from the CEO, so the CEO select board

candidates. These selections might be inside as well as outside directors, e.g. acquaintances or former college friends of the CEO. A large part of the sample CEOs frequently also chair their boards, giving them a major say in important organizational decisions, and has influence on the remuneration (Rijsenbilt, 2011). Narcissistic CEOs favor strategic bold actions that attract attention. They favor strategic flux or dynamism, so large acquisitions and bold initiatives are often made by narcissistic CEOs. They are not trying to refine existing formulas, instead they put the company continuously at the leading edge to develop success (Chatterjee & Hambrick, 2007). This can lead to positive or negative outcomes on the financial performance of an organization. CEOs often denies ‘negative rumors’ about the wellbeing of the organization and gain pleasure form demonstrating the failure of others (Stein, 2013) and want to make followers out of their employees (Kets de Vries, 2004). CEOs are limiting the ability of managers to work effectively with colleagues and subordinates, they are weak in

implementing programs, have rapid changes of interest, neglect to details of plans which can have a negative impact on the organizational culture. They focus on short-term profits, rather than on a balanced scoreboard and pay little or no attention to the human costs of how

mangers achieve financial results which also can have a positive or negative effect on the organization culture and financial performance (Lubit, 2002). Also, CEOs often overestimate the value of the organization which can have a negative outcome (Stein, 2013).

2.1.6 The long and short term effects of the influence of a narcissistic leader

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the CEO is leaving the board to function as ‘’rubber stamps’’ of the CEOs decisions, the board becomes more a ceremonial function which will keep up the false appearance of legitimate managerial decisions (Rijsenbilt, 2011). This leads to a Heroic Management. The rewards for increasing, for example, the share price, go largely to the leader who pays nothing if the share price would have been dropped, this is the effect on the influence on the

remuneration that a CEO has (Mintzberg, Simons & Basu, 2002). This can create an organizational culture filled with rage and depressive withdrawal (toxicity) (Godkin & Allcorn, 2009) and if the employees aren’t in the ‘right’ direction the CEO will fire them (Stein, 2013). It limits the ability of managers to work effectively with colleagues. No one dare to criticize the CEO and the effect is losing creativity and critical assessment of ideas. This can seriously compromise the department’s productivity (Lubit, 2002).

The strategic decisions of an CEO have major effects on the (financial) performance of an organization. Rapid changes and the bold actions en initiatives cause confusion and poor follow-through, and therefore an unproductive workplace. Talent workers are driven away and managers have to make sudden changes which lead to less attention and failures in the unit’s performance (Lubit, 2002). These acquisitions resulting in big wins or big losses on the financial performance, they have an extreme fluctuating effect (instability) on the

performance of an organization and destroy shareholder value. It will either lead to big benefits form first-mover advantages or to suffer from major losses form misjudging the environment (Chatterjee & Hambrick, 2007). CEOs overestimate the value and this can stood in the way of selling it in bad times, and the effect will be bankruptcy on the long-term (Stein, 2013). To conclude, ‘narcissist's tendency to pursue dynamic, grandiose strategies will be reflected in the company's performance’ (Chatterjee & Hambrick, 2007: 11).

2.1.7 Identification, diagnosing and measurement

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of narcissism. These show the complexity of the narcissism construct and a combination of high scores on two or more of the four factors could open up the possibility for different subtypes of narcissism (Motter, 2009).

The 11 criteria from Godkin & Allcorn (2009) can be used as a measure to assess if an organization is narcissistic. To measure the level of narcissism of an organization Hamedoglu & Potas (2012) have developed an organizational narcissism scale (ONS). It is a scale with 34 items, see appendix II for the 34 items, which are separated into 5 sub-dimensions:

grandiosity, self-admiration and vanity, leadership and authority, anticipation of recognition and exhibitionism. Every dimension of the scale strongly, positively correlates with the other dimension as well as with the scale as a whole. The scale will help to determine whether organizational narcissism is healthy or pathological.

2.2 Case information

The case question will be answering if Holmes was a narcissistic leader and Theranos an narcissistic organization. This will be done on the basis of the nine DSM-IV characteristics to see if narcissism is present and the 11 criteria to diagnose an arrogant organizational disorder.

2.2.1 Was Elizabeth Holmes a narcissistic leader?

Five (or more) of the nine characteristics have to be present to conclude that Holmes was a narcissistic leader. The first characteristic is present, because Holmes claim to have harnessed a revolutionary technology which wasn’t true, but sold it like it would be revolutionize (Boni & Sammut, 2019). She exaggerates achievements and talents. Holmes was preoccupied with fantasies of unlimited success, power and brilliance, because she pushed her vision of what Theranos could be, but not what it actually was. Holmes knew she was so good at selling her vision that she wasn’t stopped (Gates, 2018) which meet the second characteristic. Also the third characteristic is present, because Holmes enlisted the help of her former professor and other high-profile entrepreneurs as mentors (Boni & Sammut, 2019). So that she would associated with, other special or high-status people which would make her feel special. The fourth characteristic is absent. Holmes meets the fifth characteristic because she did not want to seeking and listening to expert advice and she also was suppressing dialog and scientific debates (Boni & Sammut, 2019). Everyone should automatic compliance with her

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employees who were fired when they could not deliver quick results to match her promises (Charles, 2018). So she takes advantage of others to achieve his or her own ends. Holmes showed a lack of empathy and therefore the seventh characteristic is present. Because when an employee raised, for example, concerns about the quality control problems within the company, Holmes would dismissed these concerns instead of recognize or identify with the feelings (D’Onfro, 2019). Character eight is absent. The last characteristic is present because Holmes prioritized her personal legacy above all else (Gates, 2018). Greed and fame were pursued to personal benefits of Holmes (Boni & Sammut, 2019), which means that she showed arrogance and haughty behaviors or attitudes.

2.2.2 Was Theranos a narcissistic organization?

Seven (or more) of the 11 criteria have to be present to conclude if Theranos was a narcissistic organization. The first criteria is present because Theranos believed that they used a

revolutionary technology which would change the healthcare (Boni & Sammut, 2019). This can be interpret as pride and great hope for future successes. The second criteria is absent. The pride of Theranos was threatened by several people, for example, the author of the book about Theranos. As reaction Theranos squelched dissent and threatened the author (Charles, 2018), this meets the third criteria because envy and rage arise. Also criteria four is present because there was an environment of high employee turnover rates and employee dismissals (Boni & Sammut, 2019). Employees were constantly fired (Carreyrou, 2018). Theranos had also a hostile environment (Boni & Sammut, 2019) which meets a management by

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in to the conference room, the shades would be pulled down. The leadership group don’t want to interact with the employees, they hide out in their foxholes (Carreyrou, 2018). Also

because they didn’t say anything about the false claims en just let the CEO do her thing. The eleventh and last criteria is also absent.

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3. Hypotheses

Chapter 3 provides a number of hypotheses based on the conclusions from the literature.

The first nine hypotheses are about CEO narcissism were the first seven are of interest and based on proper information from the literature.

Hypothesis 1:

H1: Holmes has a grandiose sense of self-importance behaviour.

H0: Holmes does not exhibit this characteristic.

Hypothesis 2:

H1: Holmes had a fixation on power and success.

Hypothesis 3:

H1: Holmes beliefs that she is special.

Hypothesis 4:

H1: Holmes has a sense of entitlement.

Hypothesis 5:

H1: Holmes is interpersonally exploitive.

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H1: Holmes lacks empathy.

Hypothesis 7:

H1: Holmes has an arrogant, haughty behaviour.

Hypothesis 8:

H1: Holmes requires excessive admiration.

H0: Holmes does not exhibit this characteristic

Hypothesis 9:

H1: Holmes is often envious of others.

The following 11 hypotheses are about organization narcissism were the first seven are of interest and based on proper information from the literature.

Hypothesis 10:

H1: Theranos held exceptional pride

H0: Theranos does not exhibit this characteristic.

Hypothesis 11:

H1: Theranos develop envy and rage when excessive pride is threatened.

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H1: Theranos has a history of firings.

Hypothesis 13:

H1: Theranos manage by intimidation.

Hypothesis 14:

H1: Theranos environment is fear supressed.

Hypothesis 15:

H1: Theranos filtered information flows.

Hypothesis 16:

H1: Theranos board members hide in their foxholes.

Hypothesis 17:

H1: Theranos has feeling of exceptional entitlement.

Hypothesis 18:

H1: Theranos has an environment where others are frequently blamed.

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H1: Theranos sense of mood is unpredictable.

Hypothesis 20:

H1: Theranos has distressing and destructive internal competition.

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4. Research plan

Chapter 4 provides a research, which is developed under assumption that both the CEO and the organization fully cooperate in the research and will pay for it. The data collection will be done by a market research company. Thus, research plan will not be executed for this essay.

4.1 Sample

To provide answers about the hypotheses data is needed from the workers of Theranos. The employees are differentiated into two groups, namely the ground employees and board members. Theranos had a population of 800 ground employees, excluding the board members (Mukherjee, 2018). There were two boards, a ‘normal’ and an medical advisory board. The ‘normal’ board had 12 members including the CEO (Reingold, 2015) and the medical board had 8 members (Buchanan, 2016), which makes a population of 20 board members.

The sample frames of the two board populations can be found in appendix III, table 7 and 8. The sample size, with a 95% confidence level and a confidence interval of 5 needed to make the results representative is N=19 for the board members population. For the 800 ground employees there isn’t a sample frame yet, because there isn’t a list of all employees available on the internet. Another approach would be to go through LinkedIn or Facebook to perform a search for the company to get names, second option is to pay for the list through research companies. Therefore, the Stratified Random Sampling method will be used, this divides the population into groups called strata because it is difficult and costly to develop a complete sample list (Keller, 2012). The strata are 5< / 10< or >10 working years, because of these strata the results are generalizable back to the population. The sample size, with a 95% confidence level and a confidence interval of 5 needed to make the results representative is N=260 for the ground employees population.

4.2 Measurement and measures

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can determine if the CEO was a narcissist and what type of narcissist the CEO was. The level of narcissism within the organization will be measured though the ONS scale, which is based on the 11 criteria to identify if an organization is narcissistic. These criteria are used to develop the hypotheses. The ground employees and the board members will get a second questionnaire that consist of 34 items that also have to be answered wit True or False. These items are divided into five dimensions to get a clear overview, to determine whether the organization has a narcissism that is healthy or pathological.

The type of measure that will be used is survey research. To provide answers for the hypotheses existing questionnaires will be used, these questions come from the NPI and NPO scales. Because it is a sensitive topic both questionnaires will be unanimously so that the participant will be comfortable enough to tell the truth and also to assure sufficient response. Furthermore, the participant only have to choose between Truth or False which also help to assure sufficient response and thus the level of measurement will be nominal.

Survey

The survey contains of two questionnaires one about the level of a narcissistic CEO and the other about the level of a narcissistic organization. It will be a mail survey. The participant will get an URL code send by e-mail so that they can be forwarded to the web-based questionnaires. But first the questionnaires will be tested by four former employees to determine whether the topics are understood, if there are any missing elements etc. before it will be send.

The questionnaires will contain questions about the background of the participants: age, function and department to compare groups within the samples. Furthermore, the

questionnaires contain dichotomous questions and response format (Truth/False).

The question content of questionnaire one is about the four dimensions of the NPI scale to measure narcissistic CEOs. Supportive evidence that the NPI measures multiple dimensions of personality with a differentiated set of external correlates is consistently found in studies examine two of the four dimension. Therefore, these two will be used:

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- Leadership/Authotiy: High score means a greater degree od self-awareness, a lower actual-ideal self-discrepancy and higher self-esteem (Ackerman et al., 2013). The questions asked are based on the 40 items list from (Motter, 2009).

The second questionnaire is about the five dimensions of the ONS scale. When the following subject (dimensions) are related (from 0,957 to 0,563) with the all scale the organization is highly related with narcissism:

- Leadership and Authority: Thinks that there company is the best and other should see us as an inspiration.

- Anticipation of Recognition: The employees are proud to work here, and there is nothing they can’t succeed in.

- Grandiosity: We never give up and it is impossible to ignore our success. - Self-Admiration and Vanity: Everyone knows us and we make a difference.

- Exhibition: We put our success on display in a striking manner (Hamedoglu & Potas, 2012)

The questions asked are based on the 34 items list from Hamedoglu & Potas, (2012)

4.3 Research design

The research design which will be used is the non-experiment. It is a one-shot survey design that consists of a single observation. This is the most common form of research and especially for descriptive ones like this research, a strong design (Trochim, 2020).

4.4 Analysis

We made a small overview to list up all research activities in a chronological order, see table 4.1.

Components Activities

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22 Making a sample frame

for the ground worker population

Employees of market

research company

Pay for the a list, or go searching for the employees on linkd-in, facebook etc.

At the office When the CEO and Theranos

will be fully corporate and

pay for it

Making the online web-based questionnaires Employees of market research company Based on the itmes and guidelines from the NPI and ONS scales

At the office After sample frame of the ground workers

is conducted

Send the questionnaires to four former

employees for a check

Employees of market research company By e-mail and include the questionnair es

At the office When the questionnaires

are made

If needed, adjust questionnaire based on the outcome of pre-check Employees of market research company If something is unclear make clear so that the other participants get what you

want

At the office Only if needed, after the feedback from the four former employees

Send URL code by e-mail to participants (Board:N=19, ground employees: N=260) Employees of market research company

By e-mail At the office After questionnaires

are clear and done Make a SPSS format

with nominal scale

Employees of market

Use the guidelines

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are clear and done

Fill in the SPSS format with the survey

outcomes and compute the chi-square statistic and see if there are any relationships between the variables (characteristics) Employees of market research company Make a SPSS output and based on this make conclusions

At the office After all participant have

handed in their answers on the questionnaires

Make a conclusion out of the SPSS outcome Employees of market research company Make a SPSS output and based on this make conclusions

At the office When chi-have statistic been

conducted

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5. Analysis, discussion

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6. Conclusions and recommendations

The last chapter contains a conclusion an recommendations based on the literature and hypotheses. There is also a reflection on the research with various limitations.

6.1 Conclusion

‘Was CEO ,Elizabeth Holmes, a narcissistic leader and therefore making Theranos a

narcissistic organization as result?’ As of the results from the literature and the formulated

hypotheses we can conclude that CEO, Elizabeth Holmes is a narcissist. Seven out of nine characteristics are met. Which means that Holmes has a grandiose sense of self-importance, is preoccupies with fantasies of unlimited success and power, believes that she is special and unique, has a sense of entitlement, is interpersonally exploitative, lack empathy and shows arrogant haughty behavior. Holmes has a high level of narcissism and therefore she is a combination of a grandiose and arrogance narcissism type and thus a reactive narcissistic CEO. We can also conclude that Theranos is a narcissistic organization, because seven out of 11 criteria are present within the organization. Exceptional pride is held at Theranos and leaders see few limitations regarding wat may be accomplished and envy and rage arise when excessive pride is threatened. Theranos has a history of firings and demotions, management by intimidation is common and fear within the company accurate reality testing and creativity. There are filtered information flows and many within Theranos are alienated from the

organization and hide out in their foxholes. Theranos just met the number of criteria to diagnose narcissism, this means that Theranos has a medium level of narcissism.

6.2 Recommendations

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and knew Holmes will be used to determine if the literature review can be confirmed, and thus the hypotheses. Furthermore, the level of narcissism from the CEO and the organization can may or may not be confirmed, because of the measure scales which will be used with this research plan. Therefore is it important to execute the research plan to dive deeper into the Elizabeth Holmes and Theranos case and to further strengthen and complement this qualitive research.

6.3 Reflection

It was hard to find proper information about the environment of Theranos. Also information about Elizabeth Holmes was limited, this is due to the fact that most of the information is about the fraud cases that are currently pending. These overshadow the facts about Theranos and Elizabeth Holmes. The resources which are found are reflected on the book J. Carreyrou have written ‘Bad Blood – Secrets and Lies in a Silicon Valley Startup’. He goes into detail about the CEO and Theranos. Therefore, the sources which are used are sufficient for this qualitive research. But because there is little to no comparison material, the validity of this qualitive research is weak. Also J. Carreytou haven’t worked for Theranos or with Holmes so the reliability of the findings is also low. To improve the representativeness, reliability and validity of the findings form the journals about the book, two other resources have been used based on information from former employees. These resource have strengthen this qualitative research. But to solve the limitation problems, the research plan should be executed so that the research will be supplemented with information from former employees who knew the

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References

Theory reference list

Campbell et al., 2011. Narcissism in organizational contexts. Human Resource Management

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Chatterjee, A., & Hambrick, D. C. 2007. It’s All about Me: Narcissistic Chief Executive Officers and Their Effects on Company Strategy and Performance. Administrative Science

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Godkin, L., & Allcorn, S. 2009. Institutional narcissism, arrogant organization disorder and interruptions in organizational learning. The Learning Organization, 16(1): 40-57.

Hamedoğlu, M. A., & Potas, N. 2012. Organizational Narcissism Scale (ONS). Engineering

Management Research, 1(2): 53-65.

Higgs, M. 2009. The Good, the Bad and the Ugly: Leadership and Narcissism. Journal of

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Kets de Vries, M. 2004. Organizations on the Couch: A Clinical Perspective on Organizational Dynamics. European Management Journal, 22(2): 183-200.

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Mintzberg, H., Simons, R., & Basu, K. 2002. Beyond Selfishness. MIT Sloan Managament

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Motter, E. 2009. Preliminary Study of the Narcissistic Personality Questionnaire. ETD

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28 Case reference list

Boni, A., & Sammut, S. M. 2019. ‘’The Good, the Bad, the Ugly’’: Leadership Lessons From two Companies – Amgen and Theranos. Journal of Commercial Biotechnology, 24(4): 67-73.

Business Insider - The rise and fall of Elizabeth Holmes, who started Theranos when she was 19 and became the world’s youngest female billionaire but will now face a trial over ‘massive fraud’. 2020. https://www.businessinsider.nl/theranos-founder-ceo-elizabeth-holmes-life-story-bio-2018-4?international=true&r=US. March 5.

Business Source Premier – Whistleblower Erika Cheung: Theranos Scandal Was ‘Canary In Coal Mine’. 2019.

http://web.a.ebscohost.com.proxy-

ub.rug.nl/ehost/detail/detail?vid=43&sid=dad07dc8-d837-4910-abd9-edede440fee1%40sdc-v-sessmgr03&bdata=JnNpdGU9ZWhvc3QtbGl2ZSZzY29wZT1zaXRl#AN=139365554&db=buh. May 15.

Business Source Premier – Theranos Director Kept Quiet Amid Mounting Company Missteps. 2017.

http://web.b.ebscohost.com.proxy-

ub.rug.nl/ehost/detail/detail?vid=13&sid=f4d3e996-2fd0-4aa4-b173-e72d7c8ff1eb%40pdc-v-sessmgr02&bdata=JnNpdGU9ZWhvc3QtbGl2ZSZzY29wZT1zaXRl#AN=140786217&db=buh. May 15.

Carreyrou, J. 2018. Bad Blood – Secrets and Lies in a Silicon Valley Startup. New York: Knopf.

Charles, H. 2018. Bad Blood: Secrets and Lies in a Silicon Valley Startup. Library Journal, 143(11): 78-83.

GatesNotes, the blog of bill Gates - I couldn’t put down this thriller with a tragic ending – The inside story of the Theranos scandal is almost too wild to believe. 2018.

https://www.gatesnotes.com/Books/Bad-Blood. April 14.

Techcrunch – Theranos founder Elizabeth Holmes to stand trial in 2020. 2020.

https://techcrunch.com/2019/06/28/theranos-founder-elizabeth-holmes-to-stand-trial-in-2020/. March 20.

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29 Research plan reference list

Ackerman et al., 2013. What Does the Narcissistic Personality Inventory Really Measure?.

Sage, 18(1): 67-87.

Business Insider - Controversial health startup Theranos has barely any medical experts on its board of directors. 2015. https://www.businessinsider.com/theranos-board-of-directors-2015-10?international=true&r=US&IR=T;. April 16.

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Fortune - Report: Theranos Just Laid Off the Vast Majority of Its Employees. 2018. http://web.b.ebscohost.com.proxy-ub.rug.nl/ehost/detail/detail?vid=7&sid=820c3e67-2422-

4a06-92bc-494a8293d722%40sessionmgr103&bdata=JnNpdGU9ZWhvc3QtbGl2ZSZzY29wZT1zaXRl# AN=128995520&db=buh. April 16.

Fortune - Theranos’ board: Plenty of political connections, little relevant expertise. 2015. http://web.b.ebscohost.com.proxy-ub.rug.nl/ehost/detail/detail?vid=16&sid=820c3e67-2422-

4a06-92bc-494a8293d722%40sessionmgr103&bdata=JnNpdGU9ZWhvc3QtbGl2ZSZzY29wZT1zaXRl# AN=110477691&db=buh;. April 16.

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Appendices

Appendix I. Elizabeth Holmes and Theranos case information

‘CEO Elizabeth Holmes, hailed as ‘next Steve Jobs,’ charged with ‘massive fraud,’ accused of failed feminism’ (Solé, 2018: 1). As already mentioned the organization Theranos have used shortcoming and inaccuracies technology’s which have been covered up by the founder and also CEO of the organization, Elizabeth Holmes. The organization made false statements about their technology’s, business, and financial performance, this implicates that they wanted to appear better than they were. Theranos first came under investigation in October 2015, when the first investigative pieces was questioning the efficacy of Theranos blood-testing technology. The organization was discovered to be a threat to public health. There are more than 2 million pages of evidence collected about this subject. And despite ample evidence, Elizabeth Holmes has maintained her innocence since the grand jury indictment in 2018. After her criminal charges, Elizabeth Holmes stepped down from Theranos in 2018, the company ceased operations shortly after the departure of the CEO (Clark, 2019).

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Appendix II. 34 items of the organizational narcissism scale

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Appendix III. Sample frames of the board members Board members Theranos

1. Elizabeth Holmes – CEO and

chairman of the board of Theranos 7. Richard Kovacevich – former CEO …..of Wells Fargo 2. George P. Shultz – former US

secretary

8. Henry A. Kissinger – former US

…..secretary of state 3. Gary Roughead – retired US navy

admiral

9. William H. Frist – heart and lung

…..transplant surgeon and former US

…..senator 4. William J. Perry – former US

secretary of defense

10. William H. Foege – former director

……of the Centers for Disease Control

……and Prevention 5. Sam Nunn – former US senator who

served as chairman of the Senate Armed Services Committee and the Permanent Subcommittee on Investigations

11. Riley P. Bechtel – chairman of the

……board of the Bechtel Group Inc.,

……construction company

6. James N. Mattis – retired US Marine Corps general

12. Sunny Balwani – president and

……COO of Theranos Table 7. (Ramsey, 2015)

Members of the Medical Advisory Board

1. Susan A. Evans, PhD, FACB 5. Larry J. Kricka, D. Phil, FRCPath 2. William H. Foege, MD 6. Jack Ladenson, PhD, DABCC 3. Ann M. Gronowski, PhD, DABCC 7. Andy O. Miller, MD

Narcissistic CEOs and Organizations: The Case of Elizabeth Holmes