Harpooning the Goldman Goose (contd.)

Unless you’ve just emerged from an isolation chamber, you’ve probably encountered the New York Times op-ed by disillusioned former Goldman Sachs employee Greg Smith. That’s the one in which he notes “how callously people talk about ripping their clients off” at the firm.

Many people have praised Smith for his courage. As for us, we noted earlier this week that Peter Drucker insisted on the importance of integrity for an organization’s survival.

Still, while anyone would agree (at least officially) that integrity is important for success, not everyone would agree that Smith’s public disavowal of Goldman was the right thing to do. For instance, former George W. Bush speechwriter David Frum tweeted, “Nice of NYT to give Mr. Smith such a prominent ad for his new financial firm.” In Forbes, meanwhile, several business leaders and career counselors expressed disapproval of Smith’s op-ed, including one who said it “raises questions about this fellow’s integrity and loyalty.”

And what would Drucker have thought?

He would, without question, have commended Smith for looking hard at himself and assessing his own values. “To be effective in an organization, a person’s values must be compatible with the organization’s values,” Drucker wrote. “They do not need to be the same, but they must be close enough to coexist. Otherwise, the person will not only be frustrated but also will not produce results.”

But Drucker, as we’ve noted before, was wary of whistleblowing. He believed that people should follow an ethics of “interdependence,” under which obligations between employer and employee are mutual, not one-sided.

“In the context of the ethics of interdependence, whistle-blowing is ethically quite ambiguous,” Drucker wrote in The Changing World of the Executive. “To be sure, there are misdeeds of the superior or of the employing organizations which so grossly violate propriety and laws that the subordinate (or the friend, or the child, or even the wife) cannot remain silent. … [But] whistle-blowing, after all, is simply another word for informing.”

And Drucker took an unambiguously dim view of informants.  “Perhaps it is not quite irrelevant that only the societies in Western history that encouraged informers were bloody and infamous tyrannies—Tiberius and Nero in Rome, the Inquisition in the Spain of Philip II, the French Terror and Stalin,” he wrote. “For under whistle-blowing, under the regime of the informer, no mutual trust, no interdependencies and no ethics are possible.”

What do you think: Should Greg Smith be praised or condemned for speaking out against his longtime employer?