Career Advice Dec 27 2011

The Risks of Violating the Chain of Command

By kelly eggers

In May of 2008, four members of Lehman Brothers' senior-level management received a letter from a 14-year company veteran, Matthew Lee, who at the time was a senior vice president.

"I have become aware of certain conduct and practices," he wrote, "that I feel compelled to bring to your attention." Referencing excerpts from the firm's code of conduct, Lee cited several business and financial reporting practices which he believed to be "possibly… unethical or unlawful."

Lee was relieved of his duties with the firm in late June that year.

His story is exemplary of the whistleblower-like firings and resignations that have graced headlines since the days of Enron. Consider Michael Roseman, the former chief risk officer of now-bankrupt MF Global, who reportedly told then-Chief Executive Jon Corzine that the firm's bets on European bonds were too risky. Roseman was told he'd be replaced in January 2011, months before the firm declared bankruptcy due to its exposure to European sovereign debt.

These examples, while extreme, represent a larger scale problem that exists across workplaces: When you disagree with management's practices or the business's decisions, can you voice your dissent without killing your career? Business disagreements arise all the time: from unfair vacation policies and promotions to struggles with pay practices and unethical behavior.

It's unclear whether or not dissenters come out on top when they do speak up. At Lehman and MF Global, the employee lost their job and, inevitably, business connections and recommendations. It took front-page articles for the professional reputations of other dismissed big-bank veterans to be repaired. Had they not complained and simply quit, they may not have been labeled troublemakers. Each did find new work and, perhaps most importantly, avoided being implicated in subsequent legal actions.

Indicating your disapproval of someone's management style or the way your company is making decisions is a sensitive subject, said Dr. Jeffrey Kassing of Arizona State University. "It's no wonder you wind up putting your career at risk." Thus, the vast majority of people put up with a tense situation and remain silent.

A 2003 survey from New York University found that 85% of employees interviewed kept quiet when concerned with workplace policies or practices. Respondents reported being told to "shut up" and "grin and bear it" to avoid being labeled "troublemakers" or "tattletales." Others said they were concerned about preserving their relationships with superiors, that speaking up would be futile, or that the company would retaliate against them in some way. Most just want to avoid being the bearer of bad news.

"People who are younger and earlier in their careers are more susceptible to these pressures," said Jordan A. Thomas, chair of the whistleblowing practice at New York-based law firm Labaton Sucharow. "Sometimes they're influenced by arguments that things have 'always been done that way,' or that they're 'done like that everywhere.'"

In 2005, Kassing produced research showing the sequence of issue-reporting strategies most upward dissenters follow. Most approach problems proactively at first: They present a reasonable solution to their managers, or provide them with irrefutable facts to build their cases. If those approaches don't remedy the problem, they repeat the complaint to their supervisor, circumvent them if there's still no change and, in a rare number of cases, threaten to resign.

The success of such tactics depends on how serious the problem really is, the quality of the supervisor-subordinate relationship and how concerned the dissenter is with saving face, said Kassing, who has conducted more than a decade's worth of research on upward dissent in organizations and authored the book Dissent in Organizations.

Reporting issues to the boss can be a slippery slope. You should consider multiple angles to decide which path to take: silence, speaking up, or exiting altogether.

Defining "Real Issues"

The decision to engage in a business disagreement is rarely black and white. When the problem is an unethical, immoral or illegal business practice, the choice should be clear, experts said. "The longer you know of something and do not report it, the more you become complicit with the behavior," said Donald Palmer, a professor of management at the University of California at Davis who specializes in the role of power and politics in corporate decision making and is the author of the upcoming book, Normal Organizational Wrongdoing.

Confronting your supervisor over irritants or annoyances, however, can be destructive, Kassing said, because it appears that you're doing so for your own personal gain. "People can frame a problem and talk about it in ways that make the issue seem more principled, " Kassing said, "but you can't just go in and add window dressing to make something look principled when it's not."

For more weighty issues -- like the risky trades that were being taken at MF Global -- you have to weigh the career impact of addressing the problem against the impact if the issue itself explodes. "The risk officer looks at the trades, but there's always the chance that it could be wildly successful," said Palmer. "It's risky from a career standpoint to do the things that will make you famous when you're right."

The Relationship With Your Boss

People who feel they have control over their circumstances, are comfortable arguing, or have a good relationship with their boss are more likely to address business concerns with their superiors than people who have high career goals or lack trust in their boss. However, in the 2003 study from NYU, researchers found that 25% of employees don't feel comfortable approaching their direct boss when they see a problem.

Making the decision to go above your boss can be the most uncomfortable one to make. "Unequivocally, you're going to put your relationship with your supervisor at risk," Kassing said, which is why circumvention is often a last-ditch attempt before resignation. "People need to clearly balance the importance of the issue to them against the effect that it's having on the superior-subordinate relationship." In at least half these instances, the relationship with the direct supervisor suffered.

"In these circumstances, people have probably already breached the subject with their boss more than once, and it's clear to them that the boss won't do anything about it," Kassing said. When an issue goes unaddressed by the boss, it can take on a more principled appearance: "Not only do they have the original issue, now they aren't being heard." Circumvention will also happen when the boss is the culprit, he says.

Your Own Integrity

Above all, you must consider whether keeping your job is worth staying in a situation you fundamentally disagree with. "If you get a no, that's a response," said Kassing, "but if you're getting no response, and nothing is happening, your claim seems to have been ignored and it's putting the company at risk and jobs in jeopardy, that's something more pronounced."

Before you take a stance, make sure you understand the power dynamics of your organization. "Information gets distorted as it goes up the chain of command," Kassing explained. The 2003 research from NYU noted that subordinates themselves tend to distort the information they convey to their superiors more favorably, as a means of cushioning the blow and saving face.

Overall, you need to decide if the severity of the situation and its impact on your job satisfaction is worth sticking around at the company. "If the personal matter goes unresolved to the degree that it becomes difficult for the individual to stay, he or she should wait it out while looking and ideally find other options," said Kassing. "Jumping ship, so to speak, at the slightest disagreement, probably is not a good precedent to set and likely could do long-term damage to one's professional reputation."

Write to Kelly Eggers



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