Strategic Management D3 - Essay Example

The New Recipe case study showed how the firm reacted to the effects of Martha Steward Wall Street scandal and restructured its operations afterwards to change the firm’s public image and operating procedures. The firm expanded its outbound logistics setup by adding other major retailers other than K-Mart to solidity its distribution network. The company’s operations were reorganized as far as its human management function. Martha Steward leadership role was reduced, she stepped down as CEO of the company and took a more passive role within the organization Along with a new management team the company implemented a corporate strategy that divided its business into four divisions: publishing, broadcasting, merchandising and internet.

An internal audit an advisory activity designed to add value and improve an organization’s operations (Vt, 2008). Among the key areas included in the internal audit are risk management, control and corporate governance. At Martha Steward Living Omnimedia the company had to access the risk associated with the brand image of the company which required actions to achieve collateral damage. The company suffered heavy financial losses for a couple of years after Martha’s conviction. Between 2002 and 2006 the firm was not profitable, with 2005 being the worst year due to a $76 million corporate loss.

The results had a detrimental effect in the value of the company’s stock value. Corporate governance structure of a company specifies the distribution of rights and responsibilities among the different participants such as the board, management and shareholders (Encycogov, 2008). The corporate governance of the company changed to separate the power and interest of the founder from the company’s objectives. Prior to Martha’s conviction the fact that she played such an instrumental role in the entire operations