Matha Stewart Lost Reputation Essay

9491 Words Jan 30th, 2013 38 Pages
International Journal of Humanities and Social Science

Vol. 1 No. 15 [Special Issue – October 2011]

A Corporate Hero with Scandal: Lessons Learned from Martha Stewart’s Insider Trading Crisis
Shuhui Sophy Cheng Assistant Professor Department of Communication Arts Chaoyang University of Technology 168 Jifeng E. Rd. Wufeng District Taichung 41349, Taiwan Abstract
Martha Stewart places her name on her products. She becomes the face of her company and the voice of her brand. When her personal misconduct occurred, she made her company vulnerable and risky as well. This casestudy examines how Martha Stewart managed her corporate communication when her public image and reputation were tarnished on trial for alleged insider trading
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26). As such, there is a growing body of literature on organizational learning in the wake of corporate crisis (Mitroff, 2002; Shrivastava, 1998). The Stewart case, in particular, drew the attention of media for years. The crisis of Martha Stewart’s insider trading raised the issue about the Martha Stewart’s multiplatform franchise; that is, the media world and homemaking business are intricately interwoven with her persona. Stewart’s empire has an impressive business synergy as shown by her TV programs that promote her magazines, her website which sells her products, and her products which are a link to her TV programs. She is the face, voice and personality behind the brand and, thus, the two – Stewart and the brand – are inseparable. After Stewart’s personal misconduct, the interlocking nature of her business proved to be vulnerable and risky. Moreover, Stewart’s crisis had both legal and public relations components (Jerome, Moffitt, & Knudsen, 2007). Allegations of insider trading against Martha Stewart led to her imprisonment. Her strategic plan in response to the insider trading accusations and the media attention surrounding this crisis left Stewart trying to take action to restore her image. In a sense, it is important to understand how Stewart herself and her company managed their corporate communication when her public image and reputation were tarnished under the investigation of the insider trading

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