Researcher studies what causes entrepreneurs like Theranos’ Elizabeth Holmes to cross ethical lines

Elizabeth Holmes is being sentenced Nov. 18 for defrauding investors in her Theranos start-up, a crime that inspired a University of Iowa researcher to study how entrepreneurs factor ethics into their decision making. 

Miranda Welbourne Eleazar is assistant professor of management and entrepreneurship in the Tippie College of Business and is an expert in business ethics, particularly entrepreneurs. She’s been asking entrepreneurs how they effectively balance innovation with ethical decision making, a little-studied area of entrepreneurialism, especially when compared to the well-studied failures of corporate ethics.

She said it’s sometimes hard for entrepreneurs to even see ethical dilemmas because their business becomes a part of their identity, which can cloud their vision. In interviews with entrepreneurs and investors as part of her study, she’s found that entrepreneurs are often aware of ethical challenges they face and must balance the trade-off between behaving in a completely ethical manner with potential harm to the new venture due to the nature of entrepreneurship.

She found that an entrepreneur’s response to ethical dilemmas is case dependent. Various pressures related to entrepreneurship as well as individual entrepreneurial characteristics affect how they perceive where to draw the line between what is ethical and acceptable behavior and what is unethical and unacceptable.

She can be reached at [email protected].