Martha Stewart: A Brand in Crisis

1. Stewart repeatedly denied every wrongdoing, despite the conviction and failed appeal, yet she still says she did nothing wrong. Is this the aright strategy? Yes, admit your mistakes, learn from them and move on hardly dont continue to make them over and over again. Stewart demoed that she engaged in any improper trading when she sold her shares of ImClone stock (Ferrell, Fraedrich, & Ferrell, 2007, page 345). Stewart claimed she had previously issued a stop-loss order to sell her 3928 shares she also called her friend Sam Waksal, but could not deliberate him.However, Stewarts explanation that she unloaded her stock be begin of a pre-arranged sell order collapsed when Douglas Faneuil, the brokers assistant who handled the sale of the ImClone stock for Stewart, told Merrill Lynch lawyers that his boss, Peter Bacanovic, had pressured him to equivocation about a stop-loss order. 2. Did Stewarts actions justify the subsequent sentence to her and those around her? Despite her reputa tion and business successes, Stewart was indicted in 2003 on criminal charges and impudenced several(prenominal) 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 before the Food and Drug Administration (FDA) refused to come off ImClone Systems cancer 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), making 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 house 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 executives 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 confidence in corporate fair play (Ferrell, Fraedrich, & Ferrell, 2007, page 328). Now companies must defend legitimate but complicated financing arrangements, even legitimate financing tools tainted by association with Enron. Executives in these positions have a duty to protect the investors and shareholders of the company. Consumers put their leave 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 suspicion a mong consumers about big brands in an already shaky economy thats trying its best to rebound. The overall impact of the corporate financial scandals are going to cause consumers to question the ethics and the corporate behavior of many corporations, said Lynne Doll, president of Rogers & Associates, a crisis communications firm in Los Angeles. (Hein & Cassidy, 2002). The investigation of Ms. Stewarts trading of ImClone stock continues. simply at issue is perhaps less the outcome of the investigation than the more mystical question of what this does to the brand-a subject on which brand experts are more pessimistic than marketers. An important element of the brand is authenticity, said Don Pettit, president-CEO of brand identity firm Sterling Group. A lot of Marthas credibility is built on her integrity and authority, and thats exactly whats being called into question.