UI researchers to determine how entrepreneurs reconcile ethics and decision-making

Researchers from the University of Iowa explore how entrepreneurs work to maintain consistency between making ethical and successful choices for their business.

Researchers at the University of Iowa are studying how entrepreneurs and businesses balance ethics and decision-making in building a successful business.

Interest in research stems from the recent unethical decision making by Elizabeth Holmes, an entrepreneur whose company, Theranos, claimed to have an assistive device capable of analyzing various measures of an individual’s health using just a small blood sample.

A high-profile trial in January, as well as a popular podcast that was adapted into the Hulu series *The Dropout* brought more publicity to the Theranos story.

Miranda Welbourne Eleazar, assistant professor of management and entrepreneurship at UI Tippie College of Business, said Holmes, whose supposedly game-changing technology didn’t work, is an extreme example of poor ethical decision-making by contractors.

“At first you would think she was a great role model for entrepreneurs,” Welbourne Eleazar said. “She started at Stanford and dropped out and was able to get a billion dollar valuation by getting a lot of investment in that company where she was going to hopefully do something big.”

After tracking this situation, Welbourne Eleazar said she was interested in determining how Holmes got to the point where she decided to balance investor income against creating a successful and functional product.

Welbourne Eleazar said that while Holmes and Theranos might be one of the most radical and high-profile cases of flawed corporate ethical decision-making, other companies have faced similar ethical issues.

JUUL, the vaping company that originally focused on helping smokers quit smoking tobacco, was forced to appear before Congress for marketing to children. Welbourne Eleazar said it was another example of the kind of decisions his research tries to analyze.

“A lot of times I think, ‘They don’t try to do these things, so how did they get there? “, She said.

There must be a delicate balance between ethical decision-making and entrepreneurial success, Welbourne Eleazar said.

“We don’t want to discourage innovation by being too harsh,” she said. “Sometimes people have this black-and-white view of ethics. This could encourage people to take less risk if they are afraid of getting into trouble if they overdo it.

Karl Reinke, UI PhD student and Welbourne Eleazar research assistant, said the research team will conduct interviews with entrepreneurs to shed light on the factors that influence poor ethical decisions.

The interviews will ask Iowa entrepreneurs what decisions they will make under certain pressure situations.

He said some of the established publications show a unique increased pressure that can be put on entrepreneurs.

“There can be a lot of pressure to get sales as an entrepreneur,” Reinke said. “You have to bring the money. How you do it can sometimes be problematic.”

He said his interest in business and entrepreneur decision research stems from his youth, where he worked with his father’s asphalt and concrete company for years, and overlapped with his undergraduate studies. , where he majored in philosophy and entrepreneurship.

Reinke said this research seeks to provide guidance to entrepreneurs and businesses facing difficult situations.

“These are not easy decisions, especially when you have these financial and time constraints,” Reinke said. “The problem is that I think a lot of entrepreneurs kind of have to pull from the hip when [issues] appear. … I don’t think it has to be that way.

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