How to Deal with Organizational Conflict of Interest?

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Conflict of interest is a situation that arises when a person has competing interests or loyalties. This can be between the individual and an organization or between two different organizations. When a conflict of interest occurs, it can create an ethical dilemma for the individual involved. This article will explore the conflict of interest, how it works, and some real-life examples. We will also look at organizational and personal conflicts of interest and whether or not they are criminal offenses.

Before we dig deeper, let’s clarify a few terminologies.

Best Interest Meaning

When we say “best interest,” we are talking about the welfare of the person or organization involved. This could be in terms of financial interests or in terms of the well-being of the individual or organization. In most cases, it is in the best interest of the individual or organization to avoid any conflict of interest.

Person of interest meaning

A person of interest is someone who is involved in a conflict of interest. This could be because they have something to gain or lose from the situation or because they are in a position of power where they can influence the outcome. In some cases, a person of interest may not even be aware that they are involved in a conflict of interest.

What is a Conflict of Interest?

A conflict of interest occurs when a person has competing interests or loyalties. This can be between the individual and an organization or between two different organizations. A conflict of interest can create an ethical dilemma for the individual involved.

One example of a conflict of interest is when a person has to decide between their personal interests and the interests of the organization they work for. For example, imagine that you are a sales representative for a company. If you are also representing a competitor of your company, then you have a conflict of interest. This is because you may be tempted to promote the competitor’s products instead of your own company’s products.

Another example is when a person has a financial interest in a decision they are making as an employee of an organization. For instance, imagine that you are the CEO of a company and decide whether or not to fire someone. If you have invested money in the company, you may be less likely to fire the person because it would mean that you would lose money.

Types of Conflicts of Interest

There are two main types of conflict of interest: personal, organizational, and value conflict.

Personal conflict of interest

A personal conflict of interest happens when a person’s interests interfere with their professional or organizational duties. For example, if you are a doctor and own a pharmaceutical company, you may be tempted to prescribe your own drugs to patients, even if they are not the best option.

Organizational Conflict of Interest

A conflict of interest can also happen at an organizational level. This is when a company or organization has interests that compete with each other. For example, if you work for a bank that is trying to sell insurance, you may be tempted to sell the bank’s insurance products, even if they are not the best option for the customer.

Organizational conflict of interest can also happen when a company is trying to do two things that compete with each other. For example, if you work for a company that makes both electric cars and gas cars, you may be in a conflict of interest if you decide to start making more electric cars than gas cars.

Value Conflict

Value conflict can be defined as a disagreement about the worth of something. This could be anything from ideas and beliefs to tangible objects or money. When two people or groups cannot agree on the value of something, it can lead to conflict.

There are many different types of value conflicts, but some of the most common ones include:

Ideological value conflict: This type of conflict happens when people have different beliefs about the worth of something. For example, one person might believe that art is priceless, while another thinks it can be quantified in terms of money.

Moral value conflict: This type of conflict occurs when people have different beliefs about the morality of an action. For example, one person might believe that lying is always wrong, while another thinks it is sometimes necessary.

Religious value conflict: This type of conflict happens when people have different religious beliefs. For example, one person might think that abortion is morally wrong, while another thinks it is a woman’s right to choose.

Conflict of Interest Examples

Personal conflict of interest examples

Here are some examples of personal conflict:

  • Owning a business that could be affected by your decisions as a public official
  • Voting on legislation that could impact your personal finances
  • Having a family member who is employed by the organization you are doing business with

Organizational Conflict of Interest Examples

When organizational interests and personal interests compete, it’s called a conflict of interest. Here are some examples:

  • A board member voting on a contract that would benefit their company
  • A doctor prescribing a medication made by a company they have stock in
  • A lawyer representing a client with interests opposed to another client they represent

These conflicts can occur in any type of organization, from for-profit businesses to nonprofits.

Value conflict examples

One type of conflict of interest is a value conflict. This is when two individuals or organizations have different values or objectives. For example, a company that manufactures cigarettes may have a value conflict with a health organization trying to promote smoking cessation. Another example would be an environmental organization trying to protect endangered species.

Real-life conflict scenarios

When two people have different goals, it can often lead to conflict. This is especially true when organizational objectives clash with personal agendas. But what happens when that personal interest also happens to be a financial gain?

Conflicts of interest arise all the time in business. For example, imagine that you are the owner of a small business. You are considering hiring your niece to help out in the office, but you know that she is not the most qualified candidate. However, if you hire her, you will be able to pay her a lower salary than what other candidates would require. This would give your business an advantage over its competitors.

In this situation, you have a personal interest in hiring your niece (lowering costs) that is competing with the organizational goal of finding the most qualified candidate. This would be considered a conflict of interest.

Another example of a conflict of interest can occur when two people have different values. For instance, imagine that you are the owner of a company that makes environmentally friendly products. However, you are considering hiring a new CEO who has a history of polluting the environment. Even though this person may be the most qualified candidate, you would not want to hire them because their values clash with yours.

There are many different types of conflicts of interest, but they all share one thing in common: when personal interests interfere with organizational goals, it can create problems.

If you find yourself in a situation where you have a conflict of interest, you can do a few things.

How Do You Deal with an Organizational Conflict of Interest?

There are several things that you can do to deal with a conflict of interest:

  • Disclose your conflict of interest to all affected parties. This allows everyone involved to be aware of the situation and make decisions accordingly.
  • Remove yourself from any decision-making process affected by your conflict of interest. This will help ensure that you are not in a position to make decisions that may benefit you personally at the expense of others.
  • Recuse yourself from any proceedings related to the conflict of interest. This means that you will not participate in any way, even if it is to observe.
  • Put the interests of the organization or client first. Even if it means sacrificing your interests, always try to do what is best for the people or company you are working for.

Answers to Related Questions

Is an Organizational Conflict of Interest a Crime?

In certain instances, a conflict of interest can be a criminal act. If it is related to an organization, then there is a high chance that it is a crime.

For example, when an individual uses their power or influence to gain an advantage for themselves or someone else, this is known as bribery. Bribery is a crime in most jurisdictions and can result in severe penalties, such as jail time and fines.

Other types of crimes that may involve a conflict of interest include embezzlement, fraud, and insider trading.

How do you identify conflict of interest?

There are five ways to identify a conflict of interest:
1. A personal interest competing with organizational conflict
2. An individual is unable to make impartial decisions due to personal biases
3. The individual can financially gain from behaving in a particular way
4. A person is given preferential treatment because of their relationship with the organization
5. An individual is able to influence the organization in a way that could benefit themselves

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Conclusion

Conflicts of interest can arise in any organization, and it’s essential to have a process for dealing with them. It can be challenging to determine when a conflict of interest exists, but some key factors are to consider. The organization’s best interests should always be the top priority, and personal interests should never interfere with that goal.

If there is a conflict between organizational and personal interests, it’s essential to explore all options for resolving the issue. In some cases, a conflict of interest may be a crime, and it’s essential to consult with legal counsel if that’s the case. Ultimately, conflicts of interest should be avoided whenever possible, but when they do arise, they should be dealt with in a fair and transparent way.

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Kalpataru Biswas

Kalpataru Biswas is a writer with a focus on business and career-related subjects. He has been writing for various websites since 2018 and has more than ten years of experience in driving revenue through data-driven Sales & Marketing.

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