“What am I supposed to do when I see a friend doing something wrong? Do I immediately condemn the person, remain silent and hope it changes, or just pull away?”—Kate
Your first concern is for the well-being of your friend. True friendship (what the Bible calls “love”, Prov. 17:17) has the best interest of the friend at heart. Your question reveals you care—allow that genuine care to shape your reaction.
Be sure the action you are seeing is actually wrong (i.e., hurtful, illegal, destructive, etc.) and not merely a disagreement between you. If it is a difference of opinion, then you will simply look for the opportunity to discuss it and resolve it (Rom. 12:18) or just let it be. If, on the other hand, it is damaging to your friend or against the law or if it is tearing down other people, then you must address the issue.
The Bible gives some guidance in this regard:
Don’t abandon your friend. You may not be able to rescue or “fix” him (indeed, you are not ultimately responsible for the decisions your friend makes), but you also don’t want to simply pull away without a word (see Prov. 18:24).
If possible, find the right time and place to address the issue with him. If the issue is bigger than you and he can work through alone, involve other wise, mature and responsible people (Matt. 18:15-17).
Be careful about being prideful or condescending. These attitudes are not helpful and belie the fact that none of is without sin! Sadness over wrongdoing, clinging to what is best, encouraging repentance and restitution—these are right and constructive responses (Rom. 12:9-21).
What you hope and pray for are ultimately restoration to a right relationship with God and a right relationship with others (Gal. 6:1-10). Don’t give up on doing what is right!