CH 3. Ethics and Social Responsibility

ETHICS are one's moral principles and values that are needed to guide them when making important personal or professional decisions that can negatively alter their lives or the lives around them legally or traumatically.
Morals are vested foundations instilled into one's mind from their culture and up bringing. This is a compass within constantly reminding us to conduct ourselves with respect, maturity, integrity, class. Morals, Principles, and Values allow us to function positively in society along with the rest of the population and within the structures of the law. 

COMPANIES, Organizations, and Businesses develop " Code of Conduct" or " Code of Ethics" guidelines in order to protect the business from certain situations that can have negative or unlawful occurrence. There are sever implications that can ruin a companies reputation and business if they are convicted of a major illegal scandal. There are many companies that were caught engaging in unethical behavior such as ENRON in October 2001 whose CEO and Executives were caught hiding billions of dollars of debt through loopholes and false audit reports. The company that once sold their shares for $90 ultimately went bankrupt and their $63.4 billion dollar assets were dismantled and many of the executives were convicted and sent to prison. The stocks and shares plummeted to and all time low of $1 in the end. The Corporate Social Responsibility at ENRON was ignored, not only did the CEO's lie and steal to cover the billion dollar debt loss, 7500 employees were let go with no medical benefits and only $4500 dollars.    

Convicted of Obstruction of Justice in March 2004 

 IN March 2004,  Martha Stewart convicted of obstructing justice and lying to the government as a result of  insider trading and was sentence to 5 months in a minimum security prison. She received insider information regarding a stock that she invested in name ImClone. She immediately sold the stock before it plummeted and was unable to give legal authorities a reason why. This completely put the Martha Stewart company and brand in jeopardy. Once she was convicted she was released from her board of directors position, and the company's stock plummeted by 70%. Since Martha Stewart personal image is the foundation of her brand, the TV Show rating declined significantly among other losses were her endorsements deals with major department stores.

SINCE getting out of prison Martha Stewart has had to adopt a more  Post conventional Morality Marketing Standard of ethics which is a level where people are less concerned about how others might see them and more concerned about how they see themselves and judge themselves in the long run. Ethical Decision Making are many times difficult and confusing to make, although some decisions are legal and will create substantial profit for the company, is it morally and ethically the best decision for the company and it's employees.  If the company considers Number of People to be Affected  the more they can recognize a problem as unethical and avoid a crisis situation.