Business Ethics

Business Ethics

Introduction

We will be studying the case of Martha Stewart and the scandal of insider trading which she encountered. We will address regarding the business ethics and how it has become increasingly important for companies. The debate on business ethics have become centre of attention after the exposure of serious ethical scandals like the unethical practices like the case in question and many others. Despite working within the legal framework, these businesses made personal gains from the pocket of general public by breaching the ethical boundaries and. This insider trading issue is also a comparable practice in which the persons make use of non-public information for their personal profits. Law are in place for the penalizing action on these trading but still there are methods in which insiders can create similar profits by utilizing the alternative of “open market repurchases” which is permitted by law. In our reporting we will be studying the case of Martha Stewart and her sentencing on insider trader charges. More significantly we will be observing at the role of her personality and perception in the scandal. We will review the accomplishments of the brand name of Martha Stewart; assess the strength of relationship of the brand with the personality of Martha Stewart, and will guess the achievement option of the business without Martha Stewart. We will be also assessing the impact of Martha Stewart prosecution on the business environment.

Discussion

Overview

Martha Stewart was prosecuted for insider trading for selling four thousand shares of ImClone a biopharmaceutical company as the very next day the shares of that corporation fell under normal level. The establishment took become aware of as similar selling was done by the executives of the company ImClone. Although Martha was not tried in court for crime of securities, she was found responsible for obstruction of justice and lying to examiners. She was sent to jail for five months, same phase in house arrest and was put on observation for two years.

The moral issue arose when in spite of being a public figure she opted not to make a public statement in regarding this subject and she continues to hold her innocence on this subject till date. This scandal condensed her net worth by one worth and reduced the share price of her Martha Stewart Living Omnimedia by more than seventy percent. Even though her public image was contaminated, she kept much of her brand name loyalist by accepting the jail term.

Purpose of report

We will be looking for the following answers in the conquest of making this report from the given case:

What role has Martha Stewart's image played in the insider trading scandal?

Will Martha Stewart Living Omnimedia survive if Martha Stewart were to leave the company? In order to survive, what changes will need to be made at the company?

How has Martha Stewart's conviction impacted the business environment today?

Martha Stewart's Image and the Scandal

Martha Stewart was termed as the homemaking queen before the issue. She had been awarded by much appreciation for her ...