Conflict of Interests - Term Paper Example

? Conflict of Interests Table of Contents 3 Introduction 4 What is conflict of interest? 4 Situations that constitute conflicts of interest 5 Dealing with conflict of interests 7 Conclusion 9 References 9 Abstract Conflict of interest is a common term today. Many people are usually confronted with conflict of interest in the course of leaving particularly when faced with ethical choices. However, conflict of interest is viewed as an unethical behavior that an individual should avoid. This is because its consequences have the potential of adversely affecting the corporate image of an organization or public office. In addition, conflict of interest is considered unethical in the sense that it leads to biased considerations and ways of doing business that may lead to a downfall of an organization. As a result, it is always considered imperative for any organization or public office to put in place measures aimed at mitigating or preventing altogether circumstances that might give room for conflict of interest. This is particularly done by instituting ethical code of conducts among other strategies as will be elaborated in the paper. Conflict of Interests Introduction Conflict of interest is a common word, widely used in the world today. Nevertheless, many still does not understand well its full significance. What is certain is that the term is not complex as some may think. This is because conflict of interest illustrates situations that a majority of us find themselves into particularly when we are confronted with ethical decisions regarding duties conferred upon us. However, what is acknowledged is that, conflict of interest is unethical and must be avoided by all means. This can be traced back to the biblical teachings, which says, “thou shall not serve two masters” (Gordon, 2005, p.16). The issue of conflict of interest is particularly critical to the government because the legality of the government heavily depends on the confidence level that the public have on the government officials. In this regard, Veilleux (2011) argues that the public usually expect the government officials to act impartially and fairly and in the best interest of the society. Organizations also face a major challenge in the day-to-day operation as a result of conflicts of interest that arise at various levels of the organization. What is noted is that conflict of interest knows no boundary in an organization as can be witnessed among top chief executives, board of directors, managers, as well as employees. This paper will explore ‘conflict of interest as a major ethical issue in the world today. What is conflict of interest? To begin with, conflict of interest arises when an individual, particularly an employee has multiple interests with the potential of clashing against each other. In the workplace, self-interest usually arises when an employee pursues other interests other than the professional or public interests which he or she is expected to pursue. Conflict of interest is usually considered unethical under the company’s code of conduct because it affects the general performance of an organization since it causes an individual to diverge from the interests of an organization to personal interest (Lewis, 1997). Situations that constitute conflicts of interest There are a number of situations that constitute conflict of interest in the workplace that is likely to jeopardize the effective running of an organization. One such is a situation where a male manager happens to date a female employee who is directly answerable to him or where a female manager dates a male employee who reports directly to her. In such a situation, a conflict of interest arises because the relationship between the employee and the manager affects the effective management of the company, as the manager will in most cases tend to appear lenient to the employee even if the employee whom he is in a relationship with happens to have made a problem. For instance, the employee who is in a relationship with the manager may absent himself or herself from work without permission from the relevant authority, but since he or she is in a relationship with the manager, no stun action can be taken against the employee as a result of a conflict of interest (Szeliga, 2005). The company ethical code of conduct prohibits such a relationship in the organization and should be avoided by all means since many companies in the world have failed as a result of such a conflict of interest. As a result, managers are advised to keep off falling into love affairs with their fellow employees to ensure impartiality in decision making so as to ensure that the organization is run effectively for the benefit of all the stakeholders (Thomas, 2012). Conflict of interest has also been witnessed among many managers who recruit or promote their close friends and relatives in the workplace. Despite the fact that it is illegal to do this, it is highly recommended that it should be done according to merit, which in some case cases has not been so. This is because some managers only consider their close friend and relatives for recruitment and promotions without talking into consideration their potential to handle the job for which they are being hired. This form of conflict of interest is of great danger to an organization because it can easily lead to the failure of a company. This is because the manager who has done so tends to conceal and defend their close friends and relatives even when they have done wrong in an organization with the aim of keeping the friendship and close ties intact (Lewis, 1997). Such conflicts of interest are considered unethical and should be avoided by managers in workplace if the integrity and the corporate image of an organization are to be maintained. As a result, in order to avoid such a conflict of interest from happening in an organization, it is advisable for the appointment or promotion in an organization to be done by an independent team with no interest at stake in the hiring or promotion in an organization. Carrying out recruitment and promotion in an organization by an independent person ensures that no conflict of interest arises whatsoever that may jeopardize the organizational performance (Veilleux, 2011). There have also been several reported cases of conflict of interest in the judicial system where some attorneys end up receiving fees from the litigants in a case where the litigants holds an opposing view from theirs. Acceptance of the fees amount to a conflict of interest because it prevents the attorney from defending his or her client effectively leading to a loss of a case that could potentially have been won if conflict of interest could not have ensued (Lewis, 1997). Conflict of interest has also been widely experienced among several executives and boards of directors in awarding of tenders and contracts for a company. In this regard, some boards of directors tend to favor their companies or companies of their close associates in awarding of tenders and contracts. Apart from the fact that that the act of awarding a tender or contract to a close associate or to a company owned by one of the boards of directors being a corruption, the act also constitute a conflict of interest. This is because since the directors have an interest in the company that has been awarded a tender or contract, it becomes very hard for the managers and directors to question any improper dealings of the company in case of any problem. Such conducts have saw many companies fail or contracts awarded being done shoddily by the contracted companies. However, the bad thing is that the contractors awarded contracts in most cases get away with the substandard works because they get protection from the managers and directors in the company with an interest in the company (Horn, 2007). Dealing with conflict of interests It is acknowledged that conflicts of interest may happen in one way or the other in an organization. Nevertheless, proper management can minimize the possibility of conflict of interest in an organization. This can be achieved in many different ways. Firstly, an organization can easily minimize conflict of interest in an organization by establishing and communicating well its codes of ethics to the managers and employees in an organization. The codes of ethics should include among other things the guiding principles on how the employees and the managers should conduct themselves in the course of employment. Doing this will certainly enable the employees and managers understand what is expected of them as far as refraining from conflict of interest is concerned (Thomas, 2012). Secondly, as earlier stated, most managers and boards of directors find themselves in a conflict of interest in awarding of contracts. However, this can easily be minimized by ensuring that the tendering process is done competitively in public and ensuring that no tenders and contracts are awarded to a company associated with one of the managers or boards of directors of the company. Making such, a move would ultimately ensure that the contract is awarded to an independent contractor whom the company can work with effectively without compromise based on conflict of interest (Papson, Doyle, and Ginsberg, 2011). Thirdly, conflicts of interest that can arise from hiring and promotion of employees in an organization can be avoided by ensuring that hiring is done by an independent consulting firm with no any vested interest in any of the candidates to be hired for a position. However, in case the hiring is done internally by the human resource department, this should be done in the absence of a member of the interviewee with a close relationship with any of the candidates. Doing this certainly ensures that the best candidate is hired for a job which is good for the organization (Bryant, 2013). Fourthly, it is imperative to note that not all conflicts of interest can be prevented. Nevertheless, research has indicated that the use of a recusal can help managers and employees plus the directors of a company from abstaining from engaging in conflict of interest activities. This strategy has widely been used in preventing a board member from engaging in hiring of an employee whom he or she has a personal relationship with (Bryant, 2013). Finally, conflicts of interests can easily be avoided in an organization by ensuring that a thorough investigation as to the ownership of a business is conducted before engaging in business with the company. This can be done using vendor and supplier verification data services to identify the owners. Doing this certainly prevents the organization from dealing with a company from whom one of the mangers or directors have vested interest that competes with those of the organization (Papson, Doyle, and Ginsberg, 2011). Conclusion Conflict of interest has become a common term widely use d at various spectrum. However, conflict of interest is considered unethical under the employment or company codes of conduct. In this regard, it is advisable that managers, directors, and employees should refrain from participating in activities that amount to a conflict of interest. This is because it results in favoritism or the party or business for which there is a vested interest. This, in turn adversely affects the management of an organization, thereby resulting in organizational failure. In addition, Conflict of interest results into biased decisions that only favor one side and should be avoided by all means. Among the strategies that can be used to prevent conflict of interest is by ensuring that there is an ethical code of conduct in place that describes the guiding principles of the organization. Having the ethical code of conduct in place will help bar those with the motive of participating in activities that amount into a conflict of interest. References Bryant, B.J. (2013). How to Avoid Conflict of Interest in the Workplace. Retrieved from: http://www.ehow.com/how_5556695_avoid-conflict-interest-workplace.html. Gordon, D. (2005). Organizational conflicts of interest: A growing integrity challenge. Public Contract Law Journal, 35(1), 25–42. Horn, W.T. (2007). Conflict of Interests. New York, NY: Lulu.com. Lewis, T. (1997). Conflict of Interest. Sarasota, FL: Pineapple Press Inc. Papson, T. C., Doyle, A. L., & Ginsberg, D. J. (2011). The proposed ‘organizational conflicts of interest’ rule: New opportunities to avoid or mitigate conflicts. Westlaw Journal, 25(5), 1–8. Szeliga, K. R. (2005). Conflict and intrigue in government contracts: A guide to identifying and mitigating organizational conflicts of interest. Public Contract Law Journal, 35(4), 639– 674. Thomas, M.A. (2012). Identifying Organizational Conflict of Interest: The Information Gap. A Publication of the Defense Acquisition University. Vol. 19 No. 3: 265–282. Veilleux, D.J. (2011). Recent cases involving ethics and conflicts of interest at the Merit Systems Protection Board. U.S. Office of Government Ethics. PP. 1-14. Read More