Martha Stewart: A Brand in Crisis

1. Stewart repeatedly denied both wrongdoing, despite the conviction and failed appeal, yet she still says she did nothing wrong. Is this the right system? Yes, admit your mistakes, learn from them and move on yet dont continue to make them over and over again. Stewart demoed that she engaged in every improper trading when she sold her shares of ImClone furrow (Ferrell, Fraedrich, & Ferrell, 2007, pageboy 345). Stewart claimed she had previously issued a s return-loss order to administer her 3928 shares she also called her friend Sam Waksal, but could not reach him.However, Stewarts explanation that she unloaded her stock because of a pre-arranged sell order ruind when Douglas Faneuil, the brokers assistant who handled the sale of the ImClone stock for Stewart, told Merrill kill lawyers that his boss, Peter Bacanovic, had pressured him to lie about a stop-loss order. 2. Did Stewarts actions unspoiltify the succeeding sentence to her and those around her? Despite her reputat ion and business successes, Stewart was indicted in 2003 on criminal charges and exampled several civil lawsuits to her sale of the ImClone stock (Ferrell, Fraedrich, & Ferrell, 2007, page 344).Stewart sold the stock on December 27, 2001, one day onwards the Food and Drug Administration (FDA) refused to review ImClone Systems crabmeat drug Erbitux the companys stock tumbled following the FDAs announcement. On June 4, 2003, a federal grand jury indicted Stewart on charges of securities fraud, conspiracy (together with Bacanovic), make false statements, and obstruction of justice (Ferrell, Fraedrich, & Ferrell, 2007, page 346).At her trial, the indictments for securities fraud were dropped, but the other indictments were prosecuted (Ferrell, Fraedrich, & Ferrell, 2007, page 347). Stewart faced humiliation and some prison time but examples have to be set when running a company. You just cant do what you please because you own it and not face the consequences. 3. Compare other exec utives wrongdoings versus Stewarts. Discuss why MSLO is or is not different from what happened at companies such as Enron and Tyco.Enrons demise caused tens of billions of dollars of investor losses, triggered a collapse of electricity-trading markets, and ushered in an era of accounting scandals that precipitated a global loss of assurance in corporate integrity (Ferrell, Fraedrich, & Ferrell, 2007, page 328). Now companies must support legitimate but complicated funding arrangements, even legitimate financing tools tainted by association with Enron. Executives in these positions have a responsibility to protect the investors and shareholders of the company. Consumers put their trust in them for results and their ethical standards should be top priority.Enormous evidence of book-cooking and scandals involving WorldCom, Enron, Andersen Consulting and now Xerox, combined with Martha Stewarts embroglio over dumping ImClone stock last year, have caused growing skepticism among con sumers about big brands in an already shaky economy thats trying its best to rebound. The overall carry on of the corporate financial scandals are going to cause consumers to question the morals and the corporate behavior of many corporations, said Lynne Doll, president of Rogers & Associates, a crisis communication theory firm in Los Angeles. (Hein & Cassidy, 2002). The investigation of Ms. Stewarts trading of ImClone stock continues. But at issue is perhaps less the outcome of the investigation than the more inexplicable question of what this does to the brand-a subject on which brand experts are more negative than marketers. An important element of the brand is authenticity, said Don Pettit, president-CEO of brand individuality firm Sterling Group. A lot of Marthas credibility is built on her integrity and authority, and thats exactly whats being called into question.