Week 3 – Case Study # 1
Synopsis:The case begins with Jim McIntoch the vice president of finance of Amalgamated Forest Products having a conversation with Frank the manager of corporate reporting. Jim is upset with Frank and is confronting him about the decision he’s made about going public about a financial analysis report that Amalgamated Forest Products will present to the legislation. Frank is stating that the report is falsifying information about the how much the operating cost would be if the company would need to establish pollution control of the discharge of wastewater.
Jim is extremely upset and basically threatens him about ruining his career as well as the company if he were to go public with this. Franks response to him begins apologetic about his decision but explains to him that both of them know the report is incorrect and has no real founding facts. Jean Letourmeau the company president is scheduled to testify to the findings of the report in front of the legislative subcommittee in the following week.
The report which was titled “Endangered Species: The Pulp and Paper Industry in the Upper Peninsula” had a specific area in which the five pulp and paper companies in the region helped develop the report, however Amalgamated Forest Products took the lead on creating this report. The company had three major mills in the areas in which the government had proposed the pollutions controls to be done in. It also had faced financial issues due to the recession. The section that documented the financial analysis was done by Tina Pacquette, manager of financial analysis. Frank really didn’t think highly of Tina work performance. Jim tells Frank to wait in his office while he leaves to get Jean because he wants to talk to him as well. Frank waits in Jim’s office and thinks about his career at Amalgamated Forest Products and how he has moved up within the company as well as how it paid for his education. Jean walks into the room to discuss the issues Frank has with the report. Frank tried to justify why he wants to go public and points out how Tina is increasing the operating cost by 30 percent. He also points out the fact the company has disposed of waste water in Northlake. He also stresses to him that it’s his obligation to do the right thing and how falsifying documents could mean jail time. Jean interrupts him in a calm voice and explains to Frank they have to make certain adjustment to be able to explain how the proposed legislation would have serious financial implications on the company. He also points out to Frank that he should not have been involved or concerned with the report as he was not involved in the process of compiling the information. He also mentions to him that he feels Frank is a great asset to the company and he was up for a controller’s position and they don’t want to let him go from the company. He than advises Frank to take time off and spend it with his family on his brand new sailboat. Finding of Fact #1:Ethical intensity is being shown by how strong Frank feels about how wrong it is for what Amalgamated Forest Products is doing in falsifying documents. Also the disposing of wastewater into the Wanawashee River for years in which their competition has been doing clean up and people in that community are still drinking the polluted water. Recommendation #1: In this case we see that Amalgamated Forest Products has a lot to lose if Frank were to go public with the information he knows about the financial analysis compiled. We see three of their major mills are located in the region where the government is proposing the pollution control of the wastewater. The corporate offices are also located at Northlake. Knowing all this information, Frank still feels it’s unethical to present the financial report to the committee. He points out the section in the report overstates the operating cost by 30 percent when in reality the...