I don't disagree with the importance attached to loyalty. It is after all the correlate of commitment to an institution which I advocate. Yet, if loyalty is blind, if loyalty is expressed in silence or in being a "yes man," the firm is likely to eventually fail and its loyal members to have compromised their integrity for naught. At times, therefore, you will be faced with a dilemma whether or not to blow the whistle on illegitimate policies and practices.
After examining a fast-track young manager facing just such a situation, we analyze various loyalty concepts and tactics for handling whistle blowing.
Bill and J.P/S Decisions at Southern Textile Company
Southern Textile Company is a medium-sized, locally-owned single plant company located in a pleasant Carolina town. It manufactures several kinds of fabrics mainly for men's clothing. Most are blends of wool or cotton and synthetics. Its largest line is a wool and Dacron fabric for men's suits. Southern Textile does not manufacture the suits and it does no consumer advertising. It promotes and sells to clothing manufacturers.
Scene I: President's office.
(Present are J.R the President; Bob, Vice President of Manufacturing; and Mike, Vice President of Marketing)
J.R: Gentlemen, we have two subjects to discuss today. First, the shortage of Dacron for our suit fabric manufacturing operation; and second, developing the next generation of executives. Bob, what's the story on Dacron?
Bob: Well, as you know, we sell fabric containing Dacron and wool to various clothing manufacturers. Dacron is widely accepted and in great demand. It seems like everyone wants it, but Du Pont who owns the trade name, doesn't seem able to keep up with production. We just can't get enough, so we checked with a foreign manufacturing concern and they can supply synthetic fiber similar to Dacron at a 30 percent lower price.
J.P.: Then, what's the problem?
Mike: We can't sell anything but Dacron and wool. If we use another name we just won't sell anything. And I don't have the advertising budget to develop public awareness of a new fiber. I think we better just sell the stuff as Dacron. We've got to meet our obligations to good customers or we'll lose them to someone else who will be selling them Lord knows what.
J.P.: But suppose this substitute is not as good as Dacron?
Bob: But it is; we've run every test. It meets them all. It's really just as good as Dacron.
J.P.: But won't Du Pont find out that we're selling this stuff as Dacron?
Bob: I really doubt that they'd notice. We're small potatoes to them. Besides, it's their fault that they underestimated demand and didn't get their plants built.
Mike: Plus I don't think it would be in Du Pont's interest to make a stink about this. Why should they encourage someone to promote a competitive product and brand name when they know we'll all go back to them just as soon as they have the capacity to meet our needs? I think we should sell it as Dacron and wool. Bob, you can keep making tests to see if its quality holds up. I'll keep our purchasing manager trying to get Dacron from Du Pont. This could be only a temporary policy in order to maintain employment and meet our responsibilities to our customers and stockholders. What do you think, J.R?
J.R: I'll think about it and let you know. Okay, let's talk about the second issue. All of us are close to sixty-five and tough as it is to think about, we've got to plan for replacements in the next five years. We've got to develop our younger men; find promising young fellows among our people and give extra attention to bringing them along. It's important that we identify some strong and loyal younger managers. Jim Kuhn in Personnel has told me about the Executive MBA program up at Eastern University. They really give a person training in top management policy making. It would take someone away from us a couple of days every two weeks and for a month in the summer for a couple of years, but John Chappel over at Stevens Textile has sent two of his people up there and he thinks very highly of the result. One of his graduates is only forty but is now executive vice president.
Mike: I think it sounds like a good idea . . . and the guy to send is Bill Murphy. He's just the man-a State graduate, young, but knowledgeable, and hard working. Married to old man Simpson's daughter so she understands what it takes to succeed here at Southern. Bill's the best choice.
J.P.: That's a good suggestion, Mike. I had thought of Bill also. Send him around next week and I'll talk to him.
Scene 2: A week later at President's office.
(Present are the President, J.P., and William Murphy)
J.P.: Bill, I've called you to discuss your career and Southern Textile's future. We all are aware that senior management is aging, and some are aching to spend more time trying to break ninety at Pinehurst. Since we hired few managers decades ago, I am concerned about training future replacements. We think you have the ability to move up in this firm. What do you think about Southern?
Bill: I like it very much here, sir. We have a good business and a nice group of people. Perhaps most important, we have a reputation for quality and integrity. It means a lot to me. My wife and I look forward to many years here.
J.P.: Fine, Bill. Because we think we can offer a lot. I want to move you into some jobs where you will get good, broad experience.
Bill: I'd like to move into positions of greater authority, sir, and be able to learn more.
J.P.: Good, Bill. We'd also like to send you up to Eastern University to their Executive MBA program. We'll pay your tuition and expenses and maintain your full salary while we reduce your duties here so you can keep up with your studies. You'll have an unrivaled opportunity to develop your ability for top management decision making.
Bill: It sounds like a terrific opportunity, sir.
J.P.: It is, Bill, and since the program will cost us about $60,000, making this offer reflects our confidence that you'll eventually be able to move into one of the senior jobs around here.
Bill: I'll have to talk to my wife about this, but I'm sure she will be as excited about the chance as I am. I look forward to going.
(Bill leaves)
J.P. (alone, to himself): Well, that's taken care of. Now, what do I do about that damned Dacron matter? If I don't move ahead, we're going to lose some customers for sure. And that means some people will be out of work around here.
Scene 3: Two years later at Eastern University.
(Present: Bill Murphy and Frank, a classmate)
Bill: Frank, I can't believe this program is ending already. At times when the work piled up, it seemed endless, but I guess time flies when you're suffering.
Frank: Well, I'm glad it's over! I guess I didn't take to the academics as easily as you. I thought some of the professors were hopelessly idealistic and naive. But you really impressed them. Your grades must rank at the top of the class.
Bill: I was really helped by my understanding company. They gave me the time and resources to do the work.
Frank: I've told my boss at B.I.G. Electronics about you, Bill. He says he'd like to meet you. I should have kept my big mouth shut. You'll probably get my job.
Bill: You're nuts. I'm happy with Southern Textile. I've got a great opportunity there and it's a fine company. My wife especially likes the fact that it's a stable business in a nice small city. No traveling and great opportunities for hiking and fishing with the kids. The pay is not earthshaking, but it should get better now.
Frank: Well, I'm glad to hear that. But my boss will be down here next month, and he made me promise to line up a meeting with you. I'd be indebted if you'd talk to him.
Bill: Okay, but it'll be a waste of time.
Scene 4: A week later at Eastern University.
(Present: Bill and Henry Riggs, President of B.I.G. Electronics Co.)
Henry: Bill, Frank has told me so much about you that I feel I know you already. I've been asking around and you've made quite an impression on the faculty and other students here.
Bill: Well, that's very nice of you to say, Mr. Riggs.
Henry: Call me Hank, Bill. I'll put my case right on the table. I can offer you a terrific opportunity in a dynamic company in one of the fastest growing industries in the world. We need drivers, go-getters who can keep up with our tremendous expanding market. We want you in our New York headquarters to help direct our multinational operations.
Bill: But, I'm happy at Southern Textile.
Henry: I know, Bill, but we offer growth, challenge, and innovation. Our potential profits are enormous-which means that we can offer some financial advantages. I know that money isn't your primary concern in all this, but I could probably double your present salary right away. And our top management salaries are probably four times what they are at your firm. It'll mean moving but also exciting travel and a chance to join the most innovative management team in America. You would be one of my right-hand men and I'd push your career hard. You can think about it for a couple of days of course, but I want to get this train moving.
Bill: Well . . . Okay, I'll consider it.
What is Bill Murphy's dilemma?
J.P., the President of Southern Textile Company, has made a laudable commitment to developing future executive strength internally by sending Bill Murphy to graduate school. But this admirable commitment to the "family" nature of the firm is also encouraging him to consider substituting an off-brand fiber for the trademarked Dacron without informing his textile customers. J.P. might initiate this deception on a "temporary" basis in the interest of "protecting" the firm's integrity and the security of its employees-and of course holding onto current customers and profits.
Rejecting the president's specious reasoning is easy: Substituting the fiber and selling it mislabeled is against the law. If discovered, it is likely that Du Pont would have to press charges so the illegal behavior would become public and Southern's customer reputation severely damaged with possible adverse consequences on employees and owners--perhaps even bankruptcy. We can't assess the probability of detection and punishment, but such damage should weigh heavily against illegal activity even if the chances were that Southern would not be caught.
More profoundly, such deceptive behavior constitutes lying to customers and stealing of Du Pont's property. The negative impact on morale and loyalty of such immoral behavior could damage Southern's internal climate. Even if only a small number of people were supposed to know, leaks would occur and knowledge of the decision would be known more widely. Indeed, Bill Murphy has already heard some rumors.
Murphy's personal dilemma is actually a bit more complex than the president's. His decisions fall into two general issues: (1) Does he stay or leave? (2) Does he act or not act on his knowledge of the unidentified fiber substitute? And neither of these is a simple yes or no matter.
Before considering Bill's decisions, let's examine various criteria for assessing loyalty and then consider the question of whistle blowing.
Concepts of Loyalty
Loyalty is a popular but vague concept subject to both praise and scorn. Most managers highly value subordinates' loyalty. But what they mean by the term varies widely. Expectations for subordinate loyalty include: (1) stay here, (2) obey me, (3) work hard, (4) sacrifice, (5) be successful, whatever it takes, (6) protect me and don't let me look bad, and (7) tell me the truth. All of these concepts are partially valid and can contribute to organizational effectiveness. Unfortunately, all can also be distorted, to the detriment of the individual and the organization.
Loyalty as Staying: The classic notion of corporate loyalty implied the following series of actions. A company gave a would-be manager a job, for which he should feel grateful. As long as he put up with unilateral moves, time away from family and dictatorial bosses, he had a place-a strong attraction to depression era children. The firm, in turn, expected him to stand by it, almost right or wrong, against all outsiders.
Unfortunately, this version of loyalty rewarded unimaginative and risk-adverse employees as well as its more productive ones. In time, many firms became top or middle heavy with staff professionals and managerial employees of marginal contributions. And it was precisely these people who were targeted for pruning in the competitive-inspired downsizings of the 1980s. Unfortunately outstanding contributors were also caught in staff reductions with the result that many (perhaps most) employees today see corporate loyalty to them as essentially dead (a point doubly made by senior executives who desert in the face of an outside takeover). In turn, this reduces everyone's inclination to stay if things aren't working out. Those with the best credentials and most in demand, naturally, are most likely to leave.
Loyalty as Obedience: A superior may equate a subordinate's loyalty with doing what he or she is told. All managers have a right to expect obedience, but excessive emphasis on it enshrines the "yes man" stereotype as organizational principle. Understandably, a subordinate's willful disobedience could be construed as disloyalty, but equating loyalty and obedience assumes that authoritarian management is the only valid style, while it ignores the possibility that loyalty may sometimes reside in not doing what the boss has ordered because disaster could follow. Newton Minow, who was President Kennedy's Chairman of the Federal Communications Commission, is quoted as saying that in April 1962, after a story that was highly critical of Kennedy was broadcast on NBC's evening news, Kennedy called Minow. As Minow recalled the conversation:
J.F.K.: Did you see that goddamn thing on Huntley-Brinkley?
Minow: Yes.
J.F.K.: I thought they were supposed to be our friends. I want you to do something about that. Implied was that the FCC chairman might explore putting pressure on NBC by stalling license renewal or imposing stricter regulation. Minow said that he did not do anything, but called a Kennedy aide the next morning and asked him to tell the president that he was lucky to have an FCC chairman who "does not do what the president tells him to." Kennedy reportedly understood (after he cooled off) and later called Minow to thank him.
More common than the boss losing his temper and issuing a poorly thought-out directive is when high-level executives are too distant in time and space from the action to really know what is going on. The classic military example is the horrible casualties suffered in France by British Army forces in World War I when supreme commanders well behind the lines ordered repeated infantry attacks across hip-deep mud fields of which they knew nothing. Hundreds of thousands of men died because there was no legitimate way to disobey what were ludicrous orders. After the 1973 Yom Kippur War, the Israel Defense Forces changed its war doctrine to allow a field commander to disobey the orders of superior officers in the rear if it was clear that they had no grasp of the tactical situation.6
Loyalty as Effort: Young managers and professionals rightly are expected to work hard in their firm's interest. Superiors are skeptical of young employees who make minimal commitment to their work. Yet, when effort and hours worked are equated with loyalty, people tend to put in excessive hours without real contribution.
A young insurance manager complains: "Contribution tends to be judged in terms of time spent in the office, not things accomplished. If you want to get ahead, you come in on Saturdays regardless of whether it is necessary or not. The cafeteria and offices are sometimes filled with people who just feel they can't afford not to come in on Saturday."
Thus, behavior can become a game of "face time" to convince others of your loyalty, even when it contributes little to organizational performance. One of the central scenes in Abe Burrows's play and movie, "How to Succeed in Business Without Really Trying," portrays the young Machiavellian hero coming into his World Wide Wicket Corporation office early Saturday morning to decorate his desk with empty coffee cups and cigarette butts so that he would appear to have worked all night when the president came in to pick up his golf clubs.
Unfortunately, the face-time ethic still applies in too many corporate cultures. A Fortune article quotes a consultant who was talking with the managing partner of a Big Eight accounting firm. He commented on a junior associate who seemed to him to be on the firm's fast track:
I said, "That fellow looks like partner material."
"Nope," the senior partner replied. "He'll never make it. He leaves at 5:30 and doesn't come in on Saturdays. At this firm, you're expected to work till 7:30 every night. Half days on Saturdays."
"But how necessary is all that extra time?" I asked.
"It's not that," the partner said. "It's the discipline."
One result of such expectations is the average executive's work week during 1979 to 1985 increased from 53 to 56 hours per week--and vacation days taken declined from 16 days per year to 14.
A prominent management consultant has suggested that employers and employees need to come to a new kind of understanding whereby "each can trust the other, recognizing that each side has appropriate self-interest." Thus, the employee manager says in effect, "I will give the organization intensity of effort, providing the organization in return is fair to me-in particular, that it doesn't con me about opportunity when there no longer is opportunity."
Loyalty as Sacrifice: The test of ultimate effort is to require significant sacrifice as a test of faithfulness-hence, its centrality in most religious traditions. In family and tribal maturation rituals, such sacrifice has taken the form of self-denial or mutilation. It is less dramatic in business, of course, but "being the good soldier" without complaint, or even "taking a dive" for the boss is not unknown. As Gordon Gekko, the fictional villainous tycoon in the film "Wall Street" in effect puts it to his young protégé: You are either with me or against me, either willing to sacrifice your integrity with illegal insider activity or you are disloyal and not worthy of the goodies I can dispense.
Such extreme examples are not confined to the cinema. Three years ago, one of my neighbors was courted by a firm to become its vice president of marketing. Part of the deal included granting him the right to bring three associates from his past company (one of the three being his sister). After six months in the new firm, the chairman required him to show his commitment by dismissing all three. Since the vice president didn't want to be seen as a job hopper, he didn't immediately resign, but complied-which certainly soured his feeling for the company. But then, the chairman hired as one of the replacements reporting to the vice president, the (somewhat ne'er-do-well) son of the firm's executive vice president. Having no say in hiring a subordinate manager is particularly grating for almost everyone and in this case provoked my neighbor's immediate resignation.
What prompted the chairman to give such a counterproductive demand? During the original negotiation, he was probably so anxious to hire my neighbor that he promised anything. Either he was deceitful in hiding his intention to force the three out, or he only later concluded to test the loyalty of his new executive.
Sacrifice as loyalty usually involves less extreme demands than Gekko's or my neighbor's former employer; usually it is to put the company ahead of family expectations or personal recreation. This may take the form of working late regularly or during crises, postponing or canceling vacations, and accepting corporate transfers without complaint. In growth periods particularly, the so-called "IBM" syndrome ("I've been moved") is a near universal among managers on the fast track. (During its period of most rapid expansion, upwardly mobile managers at General Electric on the average moved every eighteen to twenty-four months.) Refusing a promotion requiring a move has probably been the most detrimental career decision because of its being seen as an act of disloyalty.
The growth in dual-career marriages and a supposedly stronger desire to balance vocational and personal life may be reducing the willingness of young managers to sacrifice for the firm. And 1980s retrenchment has led to reduced promotion and transfer rates. Nonetheless, sacrifice as a test of career seriousness and corporate loyalty is by no means extinct.
Loyalty as Success: Superiors can see loyalty as synonymous with successful performance whatever it takes. (And don't bother them if it entails shady activities they shouldn't know about, thus preserving "plausible deniability.") Honest effort is a reasonable expectation, but this version of loyalty adds a moral criterion to competence judgment. Mot all young managers who miss deadlines are disloyal; the task may simply be impossible within legal or ethical limits. A superior who judges people and performance from such a loyalty perspective will discourage honest communication and encourage illicit managerial practice to achieve the success he or she demands. Hitler and Stalin at various times both suffered from making decisions based on unrealistically optimistic information from field commanders. Knowing that their paranoic leaders judged all failure (and even just unpleasant communications) as a mark of disloyalty to be punished, local officers would at best refrain from sending any messages and at worst would issue wildly optimistic reports. Thus, based on messages he received for three days, Stalin seemed to think that the Soviet Army was rebelling Nazi forces after their 1941 invasion. In fact, the Russians were in full flight, but everyone was afraid to communicate the truth. The current Soviet leader Mikhail Gorbachev is still dealing with the administrative deficiencies of a system that has treated failure as disloyalty.
Loyalty as Protection: Most superiors expect subordinates to protect them and the organization from ridicule. Subordinates who follow their superior's instructions to the exact letter are disloyal if they do not exercise common sense to fill in obvious gaps-particularly if the subordinates are specialists with more expertise in their areas than their manager. In return for subordinate concern such as Newton Minow expressed to President Kennedy, the superior implicitly promises to promote the subordinate's progress.
This loyalty concept sometimes includes an injunction to subordinates never to disagree with the superior in public, especially when the boss's boss or outsiders are present. This expectation is fair, but it can become dangerously distorted when a sharp distinction is made between "us" to whom loyalty is due and "them" to whom it is not. Group effort to conceal their mistakes reflects this view of loyalty. Thus, leaking of truth to outsiders is one of the most heinous anti-organization crimes because it threatens the hierarchy's security. Insecure executives especially fear that some subordinates will try to make them look bad in order to get their positions. Sometimes this motivation is attributed to a young manager even when it doesn't exist.
An especially destructive version of equating loyalty with protection is the expectation that loyal members will believe any top management lie no matter how preposterous. Fascist and Communist dictatorships have been particularly prone to escalating lies to cover up past failures and crimes, so the ultimate loyalty test becomes your willingness to at least accept the lie and better, repeat it to others. Unfortunately, this corruption can also infect democratic government and private enterprise.
Former Secretary of Defense Robert McNamara argued that he had a right and obligation to disagree with President Lyndon Johnson about the Vietnam War, but only in private." And if he was unsuccessful in convincing his boss to change his policy (as he apparently was), his obligation was to resign and forever withhold public criticism. In this view, even if one retains a private sense of integrity, loyalty demands sacrifice of one's public reputation.
Executives have a right to expect loyalty from you against competitors and detractors, but not loyalty against the law, against common morality, or against society itself. As a former IBM executive put it:
Managers must warn employees that a disservice to customers, and especially to innocent bystanders, cannot be a service to the company. Finally, and most important of all, managers must stress that excuses of company loyalty will not be accepted for acts that place its good name in jeopardy.
Loyalty as Good Citizenship: A positive form of sacrifice is to view loyalty as being a "good soldier," that is, behavior that goes beyond the letter of the law, or going beyond the book in using one's common sense to do what is appropriate even if your boss neglects to give you specific orders. In the military, one form of retaliation to a disliked superior is to do exactly but only what he tells you to do. So if he neglects to tell you to turn off the jeep's engine and remove the keys, you might just leave it running until it is out of gas or stolen. Such impertinence might cost you something, but in a more serious situation the superior would probably bear the brunt of blame.
Four elements characterize being a good citizen: (1) the time and effort consumed in going beyond your assigned duties might lessen your performance on your official task; (2) your specific assistance is spontaneous rather than planned; (3) it is unlikely that your immediate action would be recognized by the organization's formal reward system; and (4) your action contributes to the performance of the group or organization.
Why do such a thing? The strongest predictor of such behavior appears to be commitment growing out of job satisfaction. Employees who feel good about themselves and their jobs are more likely to perform acts of citizenship. Although specific acts are not usually rewarded, superiors tend to evaluate good citizens more highly. A kind of halo effect makes average performers appear more valuable to the firm.
Loyalty as Honesty: Where loyalty is seen as honesty, truth is valued over harmony. Superiors expect subordinates to warn them of impending failure before the control system detects it. Openness and trust in vertical communications is particularly critical in firms with serious commitment to ethical standards.15 Young managers may feel threatened by this standard because it tells them to report their own mistakes. As we've seen, their experience may warn against such exposure. A Turkish proverb advises, "He who delivers bad news should have one foot in the stirrup."
Most people prefer not to report impending failure in the hope that it will go away or that no news will be interpreted as good news. To the former chief executive officer of ITT, Harold Geneen, this omission of bad news was a serious managerial crime. In effect he warned, "Don't let me be surprised by unpleasant news; not to report failure before it produces adverse results is worse than the failure itself."
One of the most distasteful inversions of a subordinate's obligation to his or her superior of communicating truth occurred in the U.S. Housing Department under Samuel R. Pierce during the Reagan administration. Secretary Pierce instructed his executive assistant Deborah Gore Dean to shelter him from bad news. By memo he "instructed" her "to omit any 'negative' news articles from those related to the department that she prepared for his perusal every morning." The subsequent financial scandals of which former Secretary Pierce claims he had no knowledge testify to the folly of an executive cutting himself off from bad news. Nothing is so destructive to long-term performance-and little else so distorts a boss's concept of loyalty than to impel a subordinate to not communicate the truth upward.
The Dilemma: You may not always know what version of loyalty is expected by your organization. You may even discover that your boss entertains several contradictory views, expecting strict obedience but becoming angry if this leads to poor performance, or interpreting mistakes as disloyalty but still expecting advance warning of impending failure. Loyalty expectations may violate your personal values when no excuse for failure is acceptable and the hierarchy must be protected at all costs. Under such unhappy circumstances, the only viable solution may well be departure.
More creative subordinates, however, find ways to precipitate a superior's reexamination of what is really intended so that loyalty is perceived primarily as effective contribution to objectives. Consider an incident that Simon Ramo, the founder of an enormously successful defense electronics firm, tells about how General Bernard Schriever, the first director of the ICBM program, handled his boss Harold Talbott, the Secretary of the Air Force at the time.
At one point early in the program, a rocket-engine contractor who had lost out in the competition succeeded in gaining Talbott's support to reopen the decision and elbow his way into the project. Talbott came to Los Angeles for the purpose of changing the contractors which the Project Office has chosen.
We were absolutely certain that the contractor Talbott was pushing, who had been properly evaluated against competition, was of marginal competence. It was critical to Schriever and me not to tolerate pressure to include unacceptable contractors who had used political influence to gain what management wouldn't give them.
Each of us was reluctant to challenge the Secretary and we sat there speechless at first, each gauging the effect of bucking a high-level presidential appointee. Schriever was an outstanding young general whose career might be ruined if he chose not to cooperate with the Secretary of the Air Force.
It was General Schriever, the one with the most to lose, who beat (me) to the draw in replying. He told the Secretary that complying with the directive would impair the program and coolly explained why...
Talbott glowered and then lost his temper. He was a handsome, well-built man, elegant in attire and seemingly always poised, so it was scary to see him come apart, get red in the face, and with an ugly expression yell at Schriever: "Before this meeting is over, General, there's going to be one more colonel in the Air Force!" He had given Schriever an order, he ended his tirade by saying, and expected to be obeyed.
"I can't accept the directive, Mr. Secretary," General Schriever said calmly, quietly, but with a very clear enunciation, "because I have a prior and overriding order. On being handed this assignment, I was directed to run this program so as to obtain an operational ICBM capability in the shortest possible time." His manner displayed no challenge or disrespect. He added, after a pause, that perhaps Talbott might wish to put in writing an order specifically naming his choice of contractor to replace the one already selected, and at the same time lower the priority of General Schriever's assignment.
The redness left Talbott's face and he turned pale. He made no comment and began to stare at the table, vigorously tapping a pencil on it and trying to pull himself together. He undoubtedly was thinking that if he put his directive in writing, he might have to cite more of his reasons for it than he would like...
In a few moments, his face returned to normal. With the fewest of words, he said to leave the contractor decision as it was and left.... (Later) he went about singing the praises of the ICBM program's management team.
Whistle Blowing
Disclosing an employer's illegal or unethical activities to insiders or outsiders is the most common definition of whistle blowing. Some would extend the concept to an employee's refusal to perform such an activity even if he or she doesn't report it to anyone.
The Risk in Whistle Blowing: Blowing the whistle is not a step to be taken without thought. The consequences can be severe for the employee and his or her family because so many managers and colleagues view such behavior as disloyal, usually expressed in earthier terms like "ratting" and "finking." James Roche, a former chairman of General Motors, once said:
Some critics are now busy eroding support of free enterprise-the loyalty of the management team, with its unifying value of cooperative work. Some of the enemies of business now encourage an employee to be disloyal to the enterprise. They want to create suspicion and disharmony, and pry into the proprietary interests of the business. However this is labeled-whistle blowing, industrial espionage or professional responsibility-it is another tactic for spreading disunity and creating conflict.
Roche's blunt comments were made during the height of the anti-business climate of the early 1970s and today's business leaders would probably be more temperate in their words. Nonetheless, most managers still harbor deep skepticism about whistle blowers. Deeply disturbing are the lengths some corporations have gone to discredit a whistle-blowing employee through blatantly false accusations, unfair dismissals, and industry blackballs. Employee economic hardship, family stress, divorce, and even suicide have been all too frequent.
The strength of organizational rejection reflects the unhappy fact that some whistle blowing stems from employee manipulation of the firm to cover up the complainer's incompetent or dishonest behavior, or even to seek revenge on a disliked superior. Although not common, such cynical whistle blowing occurs with sufficient frequency to exacerbate management response to more valid initiatives.
So one should think carefully about one's motivation and about the credibility of one's tale before acting. The whistle blower must balance a variety of loyalties, obligations, and values: (1) an employee's obligation to the firm, (2) obligations to colleagues, (3) ethical obligations to one's profession, (4) responsibility to customers and the general public, (5) family vulnerability, and (6) sense of personal integrity.
Increase in Whistle Blowing: Most Americans believe in theory that whistle blowing is legitimate and most of us have a desire to do the right thing when we observe unethical or illegal behavior at work. Nonetheless, several organizational factors may block us from acting:
- Strong role models such as senior officers who are involved in un-ethical (even if unrelated) behavior. One fears that such people would not be sympathetic to your disclosures.
- Strict adherence to a chain of command principle. Firms that stress top-down authoritarian decision making and discourage upward open-door communications do succeed in holding the lid on internal complaints.
- A great number of hierarchical levels. Distance and invisibility tend to discourage internal dissenters from acting on their complaints.
- Rigid division of work. Sharply defined, separated, and narrowly specialized position assignments hinder awareness of and disclosure of unsatisfactory situations.
- Ambiguous organizational priorities. Where top leadership is not visibly active in articulating organizational missions and values, even loyal subordinates have difficulty in judging whether local behavior is desired or not desired.
Whistle blowing for what the individual perceives as positive reasons does seem to be increasing for reasons that reflect well on American society: the civil rights movement, the consumer movement, environmental protectionism, and greater sensitivity to the impact of private actions on public rights. And perhaps the courage required to blow a whistle is now a bit less. Economic expansion and relatively full employment, particularly among professional and technical employees, make it is less difficult to find another position.
Protection for Whistle Blowers: Greater willingness to go public with complaints also reflects an expansion of legal protection for such employees. Most federal laws in the last twenty years have contained specific provisions protecting whistle blowers, but the application is usually only to the specific issues in that law such as racial, gender, or age discrimination, mine safety, or water pollution, clean air, and so on. The typical phrase is, "An employer may not discriminate against any employee because such person has opposed any practice made unlawful by the (Age Discrimination in Employment Act) or has made a charge, testified, assisted or participated in any manner in an investigation, proceeding or litigation under the ADEA."
This federal protection is of limited usefulness to most employees in private industry, however, and Congress will undoubtedly be considering broader measures. In the meantime, some states have passed legislation protecting whistle blowers. The Conscientious Employee Protection Act of New Jersey, for example, prohibits retaliation against employees who disclose illegal corporate activity or testify about such matters. Nonetheless, the predominant legal precedent in this country has been "employment at will," a common law principle that permitted an employer to fire an employee "for good cause, for no cause, or even for a morally wrong cause." Although under pressure in some states, this is still the traditional attitude of most jurists and legislators toward dismissal (especially of managerial staff).
Firms also need protection from self-serving employees and false accusations. In particular, whistle-blower protection laws should not be used to promote employee disagreement with company policies that are sanctioned by society-for example, to oppose activities such as legally accepted animal experimentation or to manufacture nuclear weapons for the Defense Department. Protesting such corporate activity may be desirable in a democratic society, but essentially as an off-the-job activity, not as resource consuming, time demanding, and internally disruptive whistle blowing. Therefore, legislation in this area must be carefully drawn to minimize court clogging and organizational inefficiencies from trivial and malevolent appeals.
As with most matters of human relationships, governmental legislation is never sufficient. No law can protect a whistle blower from the heartache of being rejected by former friends. Some corporations and a few independent assistance groups have tried to deal with the dilemma by offering psychological support and sometimes anonymity to whistle blowers. Within corporations, the introduction of ombudsmen is probably the most common response. A senior executive operating outside the formal chain of command is permanently available at the end of a hot line to deal with employee complaints on a confidential basis. The Corporate Ombudsman Association founded in 1982 has enrolled numerous Fortune 500 companies.
The "Whistleblower Assistance Fund" was founded in 1985 to help support those who have become "psychologically or economically devastated" because they challenged abuses at work. Another organization, the Project on Military Procurement, deals with what it calls "closet patriots"-people employed in the military or by defense contractors who see flagrant abuses and come forward as an act of conscience. Fearful of losing their jobs if they go public, employees are promised anonymity by the project which investigates and makes its conclusions available to the public.
What Bill Murphy Might Do
Assessing the difficulty of Murphy's situation depends on our assumptions about the Southern Textile Company's decision concerning substituting an unlabeled foreign fiber for Dacron.
If Murphy does not Know of the President's Decision: If the president had decided not to use or sell the foreign substitute fiber as Dacron, or if Bill knew nothing about the firm's duplicity, his decision whether or not to return to Southern would depend solely on his own judgment of self-interest and loyalty. Self-interest in this case would have to include family concerns because they have been so central to his life. He would have to compare opportunities for self-growth, economic benefits, and quality of life. What career path would provide greater challenge to grow now and in the future? Southern is more predictable and secure, but would he become bored? Blog. Electronics sounds exciting, but would he really be able to handle the pace that is implied? And would Henry Riggs be as reliable a mentor as J.P.?
The dollar income now and in the future would appear substantially greater at B.l.G., but that must be weighed against the higher cost of living (and probably higher expectations and aspirations) of living in New York City or its expensive suburbs. Riggs says he could "double" Murphy's present salary, but this would not be 100 percent greater than the salary Murphy might receive shortly after his return to Southern. And I doubt that B.l.G.'s salary would allow him to duplicate the quality of housing he presently enjoys.
In assessing quality of life, beauty is clearly in the eye of the be-holder because measurement is so subjective. Listening to his words about life in the small-city South and its opportunities for time with his children, hiking and fishing, suggests that Bill and his wife would feel more at home in staying with Southern. Nonetheless, others find it stultifying when job and social life are so integrated that personal privacy becomes difficult. Working in the big city facilitates divorcing one's personal life from the job and allows a more diverse cultural mix-even as leisure time is reduced.
Bill Murphy has no legal obligation to stay with Southern. The courts long ago threw out contracts obligating employees to stay with employers as compensation for their investment in the employee's training. Such a requirement would be involuntary servitude. Bill, however, may have a loyalty issue depending on his vision of loyalty. He appears to have four choices: (1) simply return to Southern with faith in the firm's salary and position assignment; (2) attempt to bargain with Southern for an acceptable salary increase and/or clarity about immediate and future promotions (being willing to leave if response is not adequate); (3) accept B.I.G.'s offer (perhaps with some effort to clarify immediate duties and future potential); and (4) expand his search by exploring other opportunities.
Clearly, Southern Textile has invested in his future and demonstrated a commitment to developing him as an individual. They did not test him against the labor market in deciding to make that investment. Nonetheless, the firm's motivation rests on its own economic interest and it would be likely to pursue that interest even if, for some unforeseen reason, to do so would mean getting rid of Murphy.
I have put Murphy's dilemma before many of my executive program, graduate, and undergraduate students: 60 percent say they would basically stay and 40 percent say they would accept B.I.G.'s or another offer. Approximately, a quarter of those leaving (10 percent of all students) say they would try to get their new employer to reimburse Southern for the expense of the Executive MBA program. It appears that a majority of the respondents would interpret loyalty in this case to include making some sacrifice of greater income and opportunity in return for the benefits of returning to Southern Textile.
If Murphy Knows of Mislabeled Substitute: Bill's decision to stay or leave is probably easier because Southern's reputation for integrity has loomed large in his evaluation of the firm. Leaving now would undoubtedly provoke much less anxiety and guilt than if the illicit substitute had not been used. Nonetheless, he still has several choices: (1) leave without saying anything inside or outside the firm; (2) attempt to bargain with Southern that he would stay if this illegal activity stops (and not say anything outside the firm); (3) blow the whistle externally, either publicly or anonymously, through communication to customers or legal authorities.
The vast majority of my managerial and student respondents, under this condition of knowledge about the mislabeled fiber, indicate that they would quietly fold their tents and leave, without giving anyone inside or outside of Southern the reason for their departure. This appears to be the simplest path to balance loyalty and personal integrity. Reticence to report the illegal activity to anyone is rationalized on grounds similar to the firm's management-that the fiber is almost as good as Dacron, that manufacturers and consumers are not really being hurt, and that Du Pont will soon be able to reclaim the market. What is not stated of course is their desire to avoid the hassle of being a whistle blower.
