Ethical Dilemma at Northlake

Frank, manager of corporate reporting at Amalgamated Forest Products, has threatened to go public with information regarding a falsified report on the effect of effluent controls on the discharge of wastewater from pulp and paper companies, which has angered his boss, Jim McIntosh and the company’s president, Jim Letourneau. Letourneau was to testify before a legislative subcommittee the following week and use the report, “Endangered Species: The Pulp and Paper Industry in the Upper Peninsula”, to give the industry’s perspective on proposed legislation.

The section of the report which contained the falsified financial information was prepared by Tina Pacquette, manager of financial analysis. Frank and Tina’s work relationship is strained and Frank has little belief in Tina’s ability to perform her job. The report was on Tina’s desk when Frank found it. It is stated in the report that Amalgamated would suffer severely financially if forced to build a lagoon to treat wastewater as impending legislation would require.

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The numbers used support this fact were highly overestimated with percentages that were nearly triple the percentages reported by Tina just one year ago.

Northlake, a small town with a population around 10,000, is the home of Amalgamated’s corporate offices. Three of the company’s main mills were located in some of the more isolated areas of the province. The company was experiencing financial difficulties because of the recession. The waste Amalgamated is dumping in the Wanawashee River is the same waste the competition had to clean up a few years ago and its remnants are still affecting the water supply of the aboriginal community located downstream from the mills.

Finding of Fact #1:Amalgamated is further damaging the local river. The same waste Northlake is dumping in the Wanawashee River is the same waste their competitor had to clean up years ago. The drinking water of the aboriginal community located downstream of the mills is still contaminated from the waste. The section of the report addressing the monetary impact of Amalgamated installing emission control equipment had been falsified. The numbers used in the report were over exaggerated in order to show that Amalgamated would suffer severely financially should this legislation be passed.

Recommendation #1:Amalgamated has three mills in the community. These three mills and the corporate offices provide jobs to many of the 10,000 people of Northlake. The company is a major contributor to the economy of the community. The recommendation is for Amalgamated to be ethical and show corporate responsibility. No amount of money can be given for human life. The aboriginal community is suffering from the effects of emission waste from the previous competitor and from Amalgamated as well. Amalgamated should forego its own financial gain and do what is ethically right to clean up their waste so that it does not affect the community.

The company has had the emissions problem for so long and it would only benefit them in the long run to do the right thing and stop the pollution now.

Finding of Fact #2:Frank is being bullied, more specifically, being mobbed, by his vice president and the president of the company.

When Jim McIntosh confronts Frank about publically disclosing the truth about the report, he is yelling and calling Frank stupid. He’s threatening Frank with all the things he could lose if he were to go forward with the truth.

His face is bright red and he is trembling with rage. When Frank is confronted by the president, Jean Letourneau, Mr. Letourneau speaks in a calm voice, but threatens Frank with losing his job which would affect his family.

Recommendation #2:Amalgamated Forest Products is one of five pulp and paper companies in the region and has taken the lead in developing the report which was to be presented by the company’s president, Jim Letourneau, to the legislative subcommittee the following week.  The proposed legislation would diminish Amalgamated’s profits.

Amalgamated was taken over last year and the head office in Chicago is putting a lot of pressure on the company to improve the bottom line. If there is a decline in profits, corporate would cut the new production line the company requested. Both Jim and Jean are under a lot of pressure to improve profits in order to get the equipment. It is recommended that Frank speak to Jim to let him know that it is unacceptable to speak to him in that manner. If that does not work, Frank should then go to the company’s human resource department and discuss it there. As for Mr. Letourneau, being that he is the president of the company, it may not be possible to resolve the issue. Frank may need to resign his position with the company. Mr. Letourneau has already alluded to the fact that Frank may lose his job if he doesn’t back down.

Finding of Fact #3: Frank’s motivation and desire to succeed has been supported by Amalgamated. During his 10 years of employment, Frank has gone from working in the yard to becoming the manager of corporate reporting. Through his employment, Frank is able to support his family and enjoy finer things.

He has to make the choice to continue to work for a company that is not ethical or jeopardizing his means to support his family by resigning.

Recommendation #3:Frank had been employed with Amalgamated Forest Products for 10 years. He is the second generation of his family to work for the company. Frank began working for Amalgamated immediately following high school as a yard man culling out damaged logs. Frank injured his leg on the job and was not able to continue to perform his job duties due to his limited physical capabilities.

Amalgamated found a less physically demanding job for Frank as an accounting clerk and after two years, his supervisor, Jim McIntosh, arranged for Frank to attend the local university to earn his Certified Management Accountants designation. After completing his certification with honors, Frank returned to Amalgamated and was promoted to a new position in corporate reporting and eventually was promoted to manager of corporate reporting. With his new position, Frank was able to take care of wife and three kids and purchase a boat.

Frank is now aware that the company that has supported him over the years is practicing unethical behavior. He was left out of the process of compiling the report which, as manager of corporate reporting, he should have rightfully been involved. The recommendation is for Frank to examine the factors of now working for a company he knows practices unethical behavior or resigning. He has to examine the goals he has set for himself and see if it is worth his staying on at Amalgamated.