Internal Fallout in Martha Stewart Omnimedia

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Executive summary

The recent conviction of Martha Stewart adversely affected MSO with respect to employee morale, leadership credibility and internal communication structure. Despite her being released and coming back to the company, these problems have not yet been solved. In bid to solve issued to do with employee morale, the management need to ensure that it involves all its staffs when making decision on matters affecting the company. Getting their views before making any decision will make them realize that they are acknowledged. Leadership credibility will be improved by encouraging all leaders to nurture sharpness in their leadership, ensure that there is harmony when managing the people as well as showing passion in all their undertakings. Internal communication will be improved by coming up with a viable communication structure. This is by establishing a communication policy that gives a clear guideline on how communication will be carried out within the various departments and in the entire organization.

History of the company

Martha Stewart Omnimedia (MSO) was established in 1976 as a catering business by Martha Stewart. Her skills in catering led to the business becoming vibrant and by late 1970s; she had already taken control of catering business and also started providing The New York Times with articles that gave tips on catering. Her experience in writing led to her publishing numerous articles and books on catering. 1987 saw Stewart being hired by Kmart to facilitate in development of home products. The company used her name she had started becoming popular among the people. Using her name on its products would help increase their sales. Her popularity when working with Time Inc. made her come up with an intention of establishing a subsidiary company that was to be under her stewardship. This company dealt with Stewart’s magazine (Martha Stewart Living magazine), a television program and books (Constance pp. 2-5). In 1996, Martha realized that the new company was doing well and she opted to change her relationship with Time Inc. She wished to be accorded to largest share of the company and to be allowed to venture in other operations within the company.

It is after Martha obtained the biggest share of the company that the name Martha Stewart Living Omnimedia came into being. Stewart success in the company saw it increase its revenue to $177.2 million in 1998. The good name of the company also saw most of the investors wishing to be part of the company. Its initial public offer saw the company make $132 million in 1999. Since then, the company has worked in collaboration with other companies as a way of expanding its market share. These include Bernhardt Furniture Company and Japan’s Seiyu. Unfortunately, the rapid growth of the company was brought to a halt in 2001. This is after Stewart sold ImClone shares. She and others in the management were convicted for the crime leading to her ceasing to manage the organization (Constance pp. 6-7). This drastically affected the organization with respect to leadership credibility; internal communication as well as employee morale went down. It is with this respect that this report aims at coming up with strategies to help the company solve these problems.

Recommendation on improving employee relation

Employee relation within an organization plays a significant role in attaining organizational growth. A good employee relation facilitates in their motivation thus being committed to organizational activities. In bid to improve employee morale, Martha Stewart needs to ensure that it involves all its staffs in making decisions affecting the company. This will help employee learn their value in the organization. In addition, they will realize that there are appreciated within the organization.

Action Plan

Martha Stewart can not be able to incorporate its staffs without coming up with a viable action plan to facilitate this. Rather than coming up with a management structure that is run from top down, Martha Stewart need to establish a model that encourages employee empowerment. The company ought to come up with a model that allows for all employees to make decisions on matters affecting their areas of specialization. The company will have to come up with a program where all staffs are encouraged to participate in decision making. It is imperative for the organization to develop forms or questionnaires to be used in collecting views from all its employees. On receiving employees’ contributions, the management will have to sit down, evaluate all of them, select the most viable and inform the staffs about their final decision (Lindel para. 2). This is to avoid chances of some staffs perceiving not to be recognized in the organization due to their opinions not being implemented. Appreciating staffs contribution within the organization will go a long way in improving their morale. As a result, MSO need to come up with strategies for acknowledging their participation within the organization. This will be by coming up with attractive modes of rewarding them whenever they achieve any organizational goal.

Recommendation on improving leadership credibility

The success of any organization depends on credible leaders. A credible leader exudes confidence in what he or she is doing thus making his or her subordinates rally behind him. To show credulity in leadership, one ought to identify and exchange shared principles and visions in a way that no member of the group will find to have been undermined. There are various actions that all leaders need to take in bid to ensure that they have improved leadership credibility in MSO. These include ensuring that there is harmony, sharpness and showing passion in all they undertake (Bucero 1).


For leaders to exude credibility in managing their operations, they ought to start by identifying their needs, project goals, principles and visions and show their commitment to the project. The leader need to evaluate him or herself on different areas, identify his or her interests, visions and then organize them in a manner that he will be able to disseminate them to his or her team with limited opposition.


For a team to effective achieve its objectives, it has to run all its activities in unity. The team needs to have agreed on their mission and vision so as to work as a team. For a leader to be credible, he or she has to learn how to go by the views shared by the majority. One needs to learn to understand and respect the principles and desires of his team (Bucero pp. 2-3). Always seek the views of team members before implementing any project. This will make team members believe that one has their best interest at heart. Before embarking on a project, the leader need to ensure that he or she brings together all his team members and come up with an agreement on the values to follow.


To show passion in what is being done one has to first understand the reasons why things are being done in that manner as well as the aspirations of the project. The leaders need to understand the importance of every project initiated within MSO. This is in bid to seriously undertake to follow the set principles towards realization of the project. This is the only way that they will be able to exude passion in their work thus making their team members believe in them. Always ensure in improving the capabilities of team members. This is to motivate them thus making them work with passion. As a leader, one ought to ensure that he encourages his or her team to press-on despite the hardships (Bucero pp. 4-5). Showing optimism in any project goes a long way in realizing this. As a result, every leader should ensure that he or she exhibits optimism in every project he or she initiates in the organization.

Recommendations on enhancing internal communication

Internal communication within an organization plays a significant role in ensuring that there is uniformity with respect to operations. It also facilitates in improving organizational efficiency. MSO ought to come up with an internal communication policy that will facilitate in improving its internal communication. To ensure that there is effective communication within the company, there are numerous actions that the management ought to embark on.

Action plan

The management needs to establish an internal communication policy within the company. The policy should clearly outline the channels of communication and how communication will be conducted within the organization. It should advocate for transparent and honest communication. The management also needs to ensure that it has come up with procedures to be used when reporting matters within the organization. It should come up with clear procedures to be used by different managers, when employees are reporting to managers as well as when employees are reporting to their fellow employees. It is also advisable that the company establish numerous bulletin boards within the institution where some notices can be pinned on for employees and other managers to access them. Managers should ensure that all bulletin boards are regularly updated while at the same time they are divided into different sections based on the departments found within MSO.

This is for every staff to easily access information affecting his or her department. The company should embark on holding regular internal meetings (International Labor Organization 2). This is to brief staffs and managers on production targets and identify problems staffs are experiencing when carrying out their duties in the organization. Organizing for regular meeting between employees and the management team will give employees the courage to share their problems effectively. This will eliminate any fear they have in relating with their managers.

Works Cited

Bucero, Alfonso. “The project leader’s credibility! How to improve this critical project management success factor!” PM World Today, 10.3 (2008): 1-5.

Constance, Hays. “Company Says Stewart’s Woes Are Taking Toll,” New York Times, 2002: 2-7.

International Labor Organization. ‘Internal communication.” 2008. Web.

Lindel, James. “Three ways to improve employee morale in the health care industry”. 2010. Web.

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