Martha Stewart Case
Harminder Singh
Module # 4 Critical Thinking
Martha Stewart: A Brand in Crisis, in Business Ethics
Case 5
Question # 1 Stewart repeatedly denied any wrongdoing, despite the conviction and fialed appeal, yet she still says she did nothing wrong. Is this the right strategy?
Answer: I think it is the right strategy to deny every allegation, if one does not believe they done anything wrong. In Martha Stewart case not once she accepted that she has done anything outside of the law. It’s good to learn from your mistake and never repeat those mistakes. She did not agree to any improper trading of the stocks of ImClone. There was a stop loss order in effect if a share fell below $60. This information was given out by Martha Stewart. The reason 3928 shares were sold, because a pre-arranged sell order was in place. “However, Stewart’s explanation that she unloaded her stock because of a pre-arranged sell order collapsed when Douglas Faneuil, the broker’s assistant who handled the …show more content…
sale of the ImClone stock for Stewart, told Merrill Lynch lawyers that his boss, Peter Bacanovic, had pressured him to lie about a stop-loss order” (Martha Stewart: A Brand in Crisis, in Business Ethics, Case 5, Para. 12)
Question # 2
Did Stewart’s actions justify the subsequent sentence to her and those around her?
Answer: The Food and Drug Administration (FDA) refuses to review ImClone system’s cancer erbitrux. A day before this refusal took place; the stock was sold by Stewart. There has been sayings that inside protect information was leaked about FDA refusing to do the review. After FDA’s refusal became public news, stock of ImClone tumbled. “In 2003, Stewart was indicted in relation to her sale of the ImClone. She faced several criminal charges and civil lawsuits” (Martha Stewart: A Brand in Crisis, in Business Ethics, Case 5, and Para. 8). This damaged her reputation and she faced humiliation, with prison time. Martha never pleaded guilty, to accept a shorted prison time. Also, Martha did not accept the responsibility even after she was proven guilty. Even though some security charges were dropped, I think it does justify the subsequent sentence, because false information was provided to the investigators. It happens to all the big companies. Some where somehow money takes affect on one’s ethical behavior.
Question # 3
Compare other executives’ wrongdoings versus Stewart’s.
Discuss why Martha Stewart Living Omnimedia (MSLO) is or is not different from what happened at companies such as Enron and Tyco?
Answer: Martha Stewart’s case is different compared to the wrong doings of Enron and Tyco CEO’s. Her case does not involve MSLO in any way. She was charged for selling stock of ImClone. That did not have any type of impact on MSLO. Only negative impact MSLO had was, Martha was the center of that company. When her reputation was damaged it also effected MSLO reputation. That’s how MSLO took the hit. Martha Stewart did not cheat MSLO in anyway. After getting released from prison, Martha was able to turn MSLO around. She accomplished this through MSLO long term stock holders.
I enjoyed reading this about Martha Stewart. Not every one is as they seem. Money does make people do unethical things. Martha Stewart does not discuss any of this scandal with any one. But it a great learning
experience.
References:
1) Martha Stewart: A Brand in Crisis, in Business Ethics. Case 5. Retrieved from: http://csuglobal.blackboard.com/bbcswebdav/pid-391110-dt-content-rid-10554_2/courses/KEY_HUM300/case5.PDF 2) Professor Susan Fournier (2004). Martha Stewart and ImClone Scandal. Retrieved from: http://mba.tuck.dartmouth.edu/pdf/2004-1-0083.pdf 3) Stark, B (June 17). abc News. Is Scandal soling Martha Stewart image? Retrieved from:http://abcnews.go.com/Business/story?id=87099&page=1#.T8LQCdWiF1M
Module # 4 Critical Thinking
Martha Stewart: A Brand in Crisis, in Business Ethics
Case 5
Question # 1 Stewart repeatedly denied any wrongdoing, despite the conviction and fialed appeal, yet she still says she did nothing wrong. Is this the right strategy?
Answer: I think it is the right strategy to deny every allegation, if one does not believe they done anything wrong. In Martha Stewart case not once she accepted that she has done anything outside of the law. It’s good to learn from your mistake and never repeat those mistakes. She did not agree to any improper trading of the stocks of ImClone. There was a stop loss order in effect if a share fell below $60. This information was given out by Martha Stewart. The reason 3928 shares were sold, because a pre-arranged sell order was in place. “However, Stewart’s explanation that she unloaded her stock because of a pre-arranged sell order collapsed when Douglas Faneuil, the broker’s assistant who handled the …show more content…
sale of the ImClone stock for Stewart, told Merrill Lynch lawyers that his boss, Peter Bacanovic, had pressured him to lie about a stop-loss order” (Martha Stewart: A Brand in Crisis, in Business Ethics, Case 5, Para. 12)
Question # 2
Did Stewart’s actions justify the subsequent sentence to her and those around her?
Answer: The Food and Drug Administration (FDA) refuses to review ImClone system’s cancer erbitrux. A day before this refusal took place; the stock was sold by Stewart. There has been sayings that inside protect information was leaked about FDA refusing to do the review. After FDA’s refusal became public news, stock of ImClone tumbled. “In 2003, Stewart was indicted in relation to her sale of the ImClone. She faced several criminal charges and civil lawsuits” (Martha Stewart: A Brand in Crisis, in Business Ethics, Case 5, and Para. 8). This damaged her reputation and she faced humiliation, with prison time. Martha never pleaded guilty, to accept a shorted prison time. Also, Martha did not accept the responsibility even after she was proven guilty. Even though some security charges were dropped, I think it does justify the subsequent sentence, because false information was provided to the investigators. It happens to all the big companies. Some where somehow money takes affect on one’s ethical behavior.
Question # 3
Compare other executives’ wrongdoings versus Stewart’s.
Discuss why Martha Stewart Living Omnimedia (MSLO) is or is not different from what happened at companies such as Enron and Tyco?
Answer: Martha Stewart’s case is different compared to the wrong doings of Enron and Tyco CEO’s. Her case does not involve MSLO in any way. She was charged for selling stock of ImClone. That did not have any type of impact on MSLO. Only negative impact MSLO had was, Martha was the center of that company. When her reputation was damaged it also effected MSLO reputation. That’s how MSLO took the hit. Martha Stewart did not cheat MSLO in anyway. After getting released from prison, Martha was able to turn MSLO around. She accomplished this through MSLO long term stock holders.
I enjoyed reading this about Martha Stewart. Not every one is as they seem. Money does make people do unethical things. Martha Stewart does not discuss any of this scandal with any one. But it a great learning
experience.
References:
1) Martha Stewart: A Brand in Crisis, in Business Ethics. Case 5. Retrieved from: http://csuglobal.blackboard.com/bbcswebdav/pid-391110-dt-content-rid-10554_2/courses/KEY_HUM300/case5.PDF 2) Professor Susan Fournier (2004). Martha Stewart and ImClone Scandal. Retrieved from: http://mba.tuck.dartmouth.edu/pdf/2004-1-0083.pdf 3) Stark, B (June 17). abc News. Is Scandal soling Martha Stewart image? Retrieved from:http://abcnews.go.com/Business/story?id=87099&page=1#.T8LQCdWiF1M