Lorman Lumber Company

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Lorman Lumber Company
Case Study 2

Lorman Lumber Company is a publicly traded company located in rural Oregon in the town of Yamica on the Mohegan River. The Lorman Lumber Company is a producer of lumber products including plywood, wood studs and wood chips. Chemicals used in the production process include petroleum based creosote and pentachlorophenol (PCP) solutions that are applied to the wood to prevent moisture loss. The sawmill plant is somewhat outdated but is reasonably efficient and profitable. The company has a record of reporting good profits and paying generous performance based bonuses to executives. Ben Watson is an executive with the company and raises his family in the community and is faced with an interesting
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The IMA Also states that individuals must perform professional duties in accordance with relevant laws, regulations, and technical standards. Once again Ben has accomplished this goal. He has recommended additional studies into public health and ecological effects. Finally to disclose delays or deficiencies in information, timeliness, processing, or internal controls in conformance with organization policy and/or applicable law is that last rule that Ben has conformed to. Recognizing that technical information was absent from an internal report was that first step in evaluating his company’s current situation.
Net Present Value

Some recommendations would include reconsidering pay for performance for company executives. Typically these type of incentives can foster a climate of unethical practices as employees tend to look out for their best financial interests. Another possibility would be forming a committee of surrounding businesses located on the river to combine efforts to decrease pollution. Since there was no one company that was directly responsible for the known chemicals that were found to have contaminated the river all companies should be aware of the possible effects and consequences of their actions. A third option is to research Yamica’s municipal water intake for possible improvements. Could new filters prevent the problem? Finally a

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