Ethics and Social Responsibility
February 26, 2013
Ethics and Social Responsibility Companies, such as Enron and WorldCom brought new awareness of the terms ethics and social responsibility. Thus, corporations are including ethics as part of the company’s strategic planning objectives (Cato Institute, 2013). This writing will assess the role of ethics and social responsibility in developing a corporate strategic plan. Further, the considerations of stakeholder needs, and agendas while developing said plan will also be addressed. In addition, an assessment of the Martha Stewart and ImClone scandal, along with preventative measures against similar future scandals is also provided.
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A civil case filed by the Securities and Exchange Commission (SEC), which protects investors, maintain fair, orderly, and efficient markets, and facilitate capital formation, charged her with insider trading (SEC, 2013). In 2001 Stewart sold nearly 4,000 shares of ImClone Systems stock. ImClone Systems, is a research company committed to the advancement of oncology care for cancer patients (ImClone Systems, 2013). The SEC states findings that Stewart sold the shares after receiving a tip from Bacanovic, who worked for Merrill Lynch. Stewart is the long-time friend of ImClone founder Samuel Waksal, who pled guilty to criminal charges of securities fraud regarding the same incident (Kay, 2003). Both Stewart and Waksal sold their stock the day before the announcement that ImClone’s new drug Erbitux, would not be reviewed for regulatory filings by the Food and Drug Administration (FDA). The stocks plummeted after the announcement but Stewart and Waksal had already sold said shares. Stewart committed securities fraud, as ImClone shares helped keep up the share values of Stewart’s Omnimedia Company. Stewarts’s ultimate prison sentence came about because of conspiracy with Bacanovic to cover up their actions; claiming prior plans to sell the stocks when it hits $60 a share and that the sale had nothing to do with Waksal. Further, both Stewart and