Case Study On Martha Stewart



1. Stewart repeatedly denied any wrongdoing, despite the conviction and failed appeal, yet she still says she did nothing wrong. Is this the right strategy?

Stewarts’ strategy may seem a bit unorthodox but, considering many factors that were brought to the table, it can be argued that it was the best at the time. For a long time, Martha Stewart had enjoyed a big share of praise from media, home owners and business partners. She was considered the epitome of successful women. Having built her multimillion dollar empire, there was needed to protect the reputation of the same.Her insistence on not testifying under oath was a tactical gesture that saw her not incriminating herself. There was need for Stewart to allow the brand go beyond the person.

Accepting the charges would have destroyed the brand beyond repair. Clients would have lost greater faith in the brand and the come-back of it would not have been easier. It was therefore a befitting strategy to deny any wrong doing. Insisting that all she did was to call back her broker, Stewart tried to put a point across that, in as much as a mistake might have been done, she was not to blame since all she did was carry out a business in good faith. Her ignorance of the regulations cannot be overlooked in matters of law. Ignorance can never be used as an excuse. Accepting the charges on the grounds of ignorance would have been tantamount to passing a sentence on herself as well as her company (Daft 421).

Stewart’s final decision to step aside as the chairman and CEO of MSLO was an act of ethical principle. It was the right thing to be done at the time considering that grave allegations had been labeled against her.
2. Did Stewart’s actions justify the subsequent sentence to her and those around her?

Stewarts actions justified, the subsequent sentence given the fact that many allegations were labeled on her. Her insistence on her innocence helped her reduce the charges. The company also survived due to the fact that she resigned as the CEO and chairman. There was need for the clients to have faith again in the company. The same would not have been achieved without change in management. Had she pleaded guilty of all the charges preferred on her, maybe she could have been handed sixteen years in jail. However, she was just given five months. This sounds like a reasonable punishment given the fact that according to her claims, she did not break the law knowingly. The allegations that she lied, were without basis. Though it was done to save herself from the turmoil, it still saved the company from plunging into further problems.
3. Compare other executives’ wrongdoings versus Stewart’s. Discuss why MSLO is or is not different from what happened at companies such as Enron and Tyco.

The MSLO incident as well as the Tyco international incident is just but the same. This is seen by the fact that the top most management all used their power to enrich themselves using bogus means. Dennis Kozlowski, the Tyco CEO, together with his partners looted more than $600 million dollars to pay for their lavish parties. It is an act of dishonest and abuse of responsibility on their part (Daft 419). Just like Stewart, they all had a responsibility to maintain high degree of honest as well as safe guard the interests of the share holders. In both cases stocks were sold in bogus means.

4. What do you think would have happened if Martha Stewart had cooperated with federal investigators?

My belief is that, Martha would have suffered a lot of setback. First I believe that the sentence that she would have been handed would have been greater than the one she received. Secondly, the company could have lost a bigger market share. Customers would have lost faith in the same and this would have affected the people around her greatly.

Work cited

Daft, Richard. Organization theory and design. New York: Cengage Learning, 2007.print.