I'm self-employed and would really appreciate it if my employees (me) told me if I was offending a client/customer. Seriously, an employee's loyalty is to the company first and to the boss second. If the boss is hurting the company, then it would be the obligation of the employee to point that out.
On the other hand, if the company culture was such that pointing that out would jeopardize the employee's job, that is a "whole 'nuther story". The manager's managers can't see this? Then they are not doing their jobs.
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If ignorance is bliss then why are the ignorant so angry? - Shannon Wheeler
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