Stewart's arrest and her subsequent sentencing can be related to consensus theory. Berle's theory of public consensus focuses on conditions within a civil society, where the consensus of the public forms a continuous although informal check on the powers of decision making held by managers (Moore and Reberioux, 2010, p. 1113). In other words, managers and other powerful entities within corporations are subject to the public eye, which should serve as a deterrent for corporate crime. In a more formal way, this public consensus is legalized within guidelines and rules implemented by entities such as the SEC and other government agencies governing business ethics.

In the light of the above, one might therefore state that Martha Stewart's arrest for insider trading is the result of legal and public consensus regarding her guilt. She was found guilty according to the consensus between the public and the SEC regarding what should be allowed to managers in terms of trading practices. Ms. Stewart disregarded this rule and was arrested as a result.

On the other hand, her arrest has also resulted in more specific conflict between the public and Ms. Stewart herself as well as her company (Leone, 2004), with extreme damage to her reputation, and many job losses within her company. Hence, the arrest itself was the result of consensus, while it created considerable conflict between herself and her public.

Ms. Stewart, however, made a concerted attempt to regain the public consensus in her favor by apologizing profusely for her actions and expressing extreme regret at the results of her actions for her company and those reliant on its health for their livelihood (PBS NewsHour, 2004). Interestingly, the public responded in kind, submitting many pleas for leniency when sentencing her. This in turn led to the judge conceding and imposing...

This can then be said to be the result of public consensus that is in conflict with punishments normally imposed upon criminals of the same kind.
Other mitigating factors included that Martha Stewart has not previously committed any crime. In a legal sense, the judge could therefore achieve consensus with Martha Stewart and her public, resulting in the lesser sentence.

The case therefore includes elements of both conflict and consensus, where consensus is achieved to override the conflict situation. In this way, Martha Stewart was sentence according to the consensus achieved between the judge and the public, although this consensus was unusual in terms of the SEC and legal rulings for similar cases in the past.

In conclusion, the case demonstrates the flexible nature of public consensus. While Ms. Stewart's crime was indeed incontestable, the mitigating factors involved included a generally positive public attitude towards Ms. Stewart for previous charitable work and social involvement and previously crime free management of her business. Although the conflict created by the crime created severe damage to her reputation, the subsequent years demonstrate that she has recovered both her esteem and position in the eyes of her admirers.

References

Leone, M. (2004, Jun. 4). Martha Stewart Arrested. Retrieved from: http://www.cfo.com/article.cfm/3009528

Moore, M.T. And Reberioux, a. (2010). Corporate Power in the Public Eye: Reassessing the Implications of Berle's Public Consensus Theory. Seattle University Law Review, Vol. 33. No. 4. Retrieved from: http://digitalcommons.law.seattleu.edu

PBS NewsHour. (2004, Jul 16). Martha Stewart Sentenced. Retrieved from: http://www.pbs.org/newshour/bb/business/july-dec04/stewart_7-16.html