"I felt a little uneasiness when I was doing it, but I believed Col. North must have had a good reason, and I did what I was told." -- Fawn Hall, former secretary of White House aide Oliver L. North, on their cooperative effort at altering, shredding and smuggling documents involved in the FBI investigation of the Iran-contra affair.

Congressional testimony on the Iran-contra affair ended last week focused on one image: Fawn Hall, loyal employe.

"I don't use the word cover-up," she said on her second day of testimony. "I would use the word 'protect.' "

While this dedication has been praised by some businessmen and businesswomen as a quality vital to any operation, others are just as adamant in their belief that she should have said no when North's demands bordered on the illegal.

But either of these positions, by itself, is too simplistic, according to public policy experts and social scientists. Whether to go along with someone you respect -- even love -- or break that primeval bond for a far less personal, if higher good, "is a real dilemma, even in the best of circumstances," says the Rev. Gerald Kavanaugh, a professor of business ethics at the University of Detroit.

Complicating such decisions in this case, says Georgetown University visiting psychologist Michael Pallak, is that Hall and other loyal individuals -- including Robert Owen, a conservative activist who concluded his testimony by reading a eulogistic poem to North -- appear to have been making choices based on what psychologists call "groupthink," rather than on their own standards.

Groupthink begins with several people working together toward a common goal, Pallak says. As pressure on them increases -- in this case a Congress unwilling to further finance the Nicaraguan contras -- they "draw the wagons around them and begin to define their own reality."

"When people are in {such} ambiguous situations, they look to someone to help them define their lives," says Pallak. "They become dependent on the person who seems to have all the answers."

Members of such a group begin to identify so closely with the leader that "when the leader gives the order, the one who is led feels as if he himself has given the order," says Peter Homans, professor of psychology at the University of Chicago. Hall, for example, testified that in the destruction of original National Security Council documents, "I don't know if he told me to destroy them or if I just destroyed them on my own initiative."

This close identification with a leader is particularly true in Washington circles where "people move so fast," says Pallak. "How you think of yourself gets bound up in the subordinate-superior relationship."

Other views on loyalty and its limits:

The military-like atmosphere which pervaded the contra operation should not have condoned blind obedience, says David Evans, a retired Marine officer who knows North. A military officer's oath is to uphold the U.S. Constitution, Evans says, and when an officer is asked to do something that goes against the Constitution, "we are all taught as junior officers that we are commissioned to say no, not yes. That is why we have ethics codes in service academies."

There are gradations of wrongness. Ruth Ludeman, who works for the Fairfax County-based American Secretarial Association, recalls a boss once asking her to lie and tell his callers he wasn't in the office. She agreed, but felt uneasy.

Sylvia Cash, a secretary for a Washington law firm, once had a boss who asked her to type personal letters on company stationery. She told his superior, and her boss eventually left the company. "Your first loyalty should be to whoever is paying your check, not to your boss," says Cash.

Ludeman and Cash say secretaries woke up to the dangers of loyalty in the publicity over Rose Mary Woods, President Nixon's secretary who may have caused an erasure of a portion of the White House tapes. Professional Secretaries International, which with 42,000 members is the nation's largest secretarial organization, adopted a code of ethics after Watergate that outlines degrees of conflict and steps to take in the event one is asked to do something wrong.

Loyalty is understood differently depending on one's stage of moral development. In the lower stages, "you take care of the other guy because you want him to take care of you," says Anne Colby, director of Radcliffe College's Henry Murray Center for social and behavioral sciences.

At the next level, one is loyal because "we're in this together." At higher levels, Colby says, one considers what is legal, then, what is ethical: "What would any just society ask of someone as far as his obligations go?"

Both Hall and Owen testified to having deliberated along moral lines, but it is unclear how far those considerations went.

"I wasn't solely a fanatic about Col. North," said Hall. " ... I can form my own opinions and morals." Three weeks earlier, Owen had told the congressional committee: "Before I began with the Nicaraguan democratic resistance, I visited a close friend ... He asked me three questions: Would my actions be moral? Would they be in the best interest of my country? and would they be legal? I answered yes ... "

Questions of loyalty are easier to answer when both the end and the means are clear. But in North's case, the end he was pursuing -- whether a simple allegiance to his president, or something more substantive, is unclear, according to Jody Palmour, author of a just-published book, On Moral Character.

The consequences of saying no can be severe. Billie Garde, a Wisconsin attorney who has been watching the contra hearings on television, knows that all too well.

While working for the Census Bureau in eastern Oklahoma in 1980, she was asked by her boss to hire members of the local Democratic party for a bureau project, and to falsify their test results if necessary. He told her his instructions came from his supervisors, she said, and for a while, she did as she was told.

She eventually confronted him with what she thought was wrong and, getting no result, told her story to a local newspaper. Her boss then persuaded a local judge to transfer custody of her two little girls to her ex-husband, and it took her a year to win them back.

Though her supervisor eventually was convicted of several criminal charges, she says she is not sure whether she would take the same action today as she did then. "The price wasn't worth it," she says. "I don't accept what {Hall} did," she adds, "but I understand it."