Normative Ethics: Utilitarianism and Deontology
One of the most publicized corporate scandals that shocked America was that of Martha Stewart and ImClone. The case was a very specific one first of all because it was initially related to the insider trading, a phenomenon which undermines the trust of investors to the entire system and secondly the main player of the said scandal was Martha Stewart, a recognized American TV star.
The scandal got its publicity because of the inadequate behavior of M-m Stewart during the investigation. The legal aspect of the case is quiet clear, Stewart was accused in insider trading, a phenomenon which undermines the basis of the free market as well as the trust of investors. The ethical aspect of the Stewart’s case is much more complicated than the legal one.
On June 5, 2003 Martha Stewart and her former broker were indicted by federal prosecutors on charges of obstruction of justice and securities fraud. The SEC accused Stewart in selling the shares after receiving insider information from Bacanovic, who at that time worked as a Merrill Lynch broker for both Stewart and ImClone founder Samuel Waksal.
According to the criminal indictment, Bacanovic told Stewart on the eve of the FDA announcement that Waksal was selling his shares, prompting Stewart to do likewise. The stock fell sharply on the market following public disclosure of the FDA decision. Had Stewart sold her shares one day later than she did, she would have lost some $40,000. Martha Stewart was initially accused in the insider trading.
It is very difficult to understand what pushed Stewart owning hundreds of millions in Martha Stewart Omnimedia to get involved into scandal with ImClone. Her decision to risk her reputation and freedom cost roughly 4,000 shares times 60 = 240,000 dollars. This amount is insignificantly small to risk the reputation and the name of the company.
One of the main moral and ethic issues of Stewart – ImClone case was its connection with the new anti-cancer medicine. ImClone was marketing the medicine vitally important for millions of people suffering from the cancer worldwide. While lying to the court Stewart risked the further development of the new medicine.
Martha Stewart actually is a well promoted brand; she “amassed insane wealth by demonstrating how to host the perfect dinner party and properly prepare roast duck.” (Kelly Boggs, 2003}. The case of Stewart indicated certain shortages of the moral ideals of the entire society.
On one hand there was a person who broke the American law, gave the false statements to court and tried to avoid the legal prosecution but on the other hand there was the great popularity of such a personality in mass media. What is more this popularity was growing even during the short term incarceration of Stewart.
Stewart is a brand; she reflects the personality ethics vs. corporate ethics. When the management of Enron trades the corporate information illegally, they are just the management of Enron, villains committing illegal actions and destroying the American economy but when Stewart lies to justice she is a nice woman which comes every now and then to each American house to teach housewives how to roast ducks and roasting the duck is more important than to keep to the moral principles while making some vague operations at a stock exchange. What is more, these operations and accordingly lie connected with them does not relate to duck roasting and are beyond the interests of the average Americans. The latter is more important for the American housewives and Stewart realized it perfectly well while telling lie to justice.
We are all human beings and our needs are arranged according to certain hierarchy and the need of high morality is coming after our physical needs are satisfied. That means the ethic principles of Stewart contradict to the “consuming properties” of brand named Stewart. If Americans assume that Stewart is not ethic then they will have to get rid of the comfortable show of roasting the ducks by the attractive woman. At least they will have to keep in mind that the duck is being roasted by a woman who does not respect the basis of the society, justice; i.e. she does not want to share the moral principles with the rest of American population. The duck will not be delicious in this case. Stewart realized perfectly well that for Americans as well as for other people the show of a nice woman teaching how to accommodate the guests is more important than the interests of the shareholders who loose money because of her illegal operations with the shares.
As for those who need urgently medicine to rescue their lives, they will blame the system which prosecuted a kind woman who taught not only how to accommodate the guests but also tried to promote the medicine which was supposed to rescue them and it was a system which made the barriers for Stewart to promote the medicine. The purpose justifies the means and the Stewart’s prosecution is not worth rescuing millions of people suffering with cancer. M-m Stewart realized that perfectly well also while telling lie to the state.
The case of Martha Stewart raised the debates in press on the morality of celebrities in general. The main question of such debates was if the recognized people should be more or less accountable for their misdeeds. “”If her name were Martha Smith, this never would have come to trial,” asserted one talking head on MSNBC in the wake of the verdict, implying that Martha has been unfairly targeted because of her celebrity. No, T.H., she has been fairly and appropriately targeted because of her celebrity” (ProEthics, 2004).
The ethical standards of celebrities should be higher because the justice while failing to prosecute celebrities creates the dangerous precedent undermining the roots of the legal system. People who are recognized as “celebrities” know this and the ethical behavior is a part of their social responsibility.
The latter is very important because celebrities shape the ethic standards of the entire society and their conduct normally directs such standards towards good or bad. Being an idol or an icon brings not only privilege but the responsibility as well.
The society has been forming the public attitude towards the rich for a long period of time. According to the stereotype of a rich person, he overvalues the fortune over the ethic principles. If the poor man lies to justice there will not be any speculations on the morality of his behavior; when the rich are cheating the justice it gives some ground for speculations on some “level of morality”. That means there is really double standard of morality or ethics for poor and rich. What was behind the misconduct of Stewart? She found it possible to lie to justice for the sake of becoming richer.
The responsibility is a driving force of the entire social development. It is a driving force of all business processes. All the stock exchange battles are the battles over the responsibility, i.e. power to control some processes. Martha Stewart owns huge fortune in her Martha Stewart Living Omnimedia but she got involved into insider trading and gave false statements to government to concentrate more control.
The ethical issue of the Stewart’s case is easy to understand. There were hopes and expectations of millions of people suffering from cancer, trust of investors, national legislation, on one hand and amount of roughly 240,000 (4,000 shares times 60) USD which she would get if her operation were successful on the other one. This is big money but incomparable with the content of the opposite pan of scales.
In fact, if you put aside the fact that she had committed a crime, you could be forgiven for thinking she had simply executed a brilliant marketing plan, replete with all of the ingredients necessary to drive consumers to action and generate iron-clad brand loyalty (Mark W. Anderson, 2005). The only one thing which Martha Stewart failed to presuppose from the very beginning was that the marketing tools employed by her could have been applied to roasted-duck-TV-show but not to the legal system of the USA.
There is one positive aspect in the Stewart’s case for the ethics; people realized that the Justice differs from TV or Hollywood show fans; she is blind with the ribbon on her eyes and can not appreciate nice TV parties hosted by Stewart.
· Kelly Boggs, Martha Stewart & the Personality Ethic, 2003, available at http://www.lifeway.com/lwc/mainpage/0,1701,M%3D150019,00.html, retrieved 7.05.2006
· ProEthics Ltd., Money, Greed and Prosecutorial Discretion: The Ethics of Martha, 2004, available at http://www.ethicsscoreboard.com/index.html, retrieved 7.05.2006
· Mark W. Anderson, Stewart should be breaking rocks, not sales records, 2005, available at http://www.thesentimentalist.com/archives/000181.html, retrieved 7.05.2006