Conflict of Interest Report: Implications and Mitigation Strategies

This report examines the concept of conflict of interest in the workplace, defining it as a situation where an employee's personal interests clash with the organization's interests, potentially leading to unethical behavior. It explores how conflicts of interest can manifest, including nepotism and self-dealing, and highlights the importance of organizational policies to mitigate these risks. The report differentiates between conflicts of interest and criminal activities, emphasizing that not all such situations involve illegal behavior. It further outlines the duty of care, duty of obedience and duty of loyalty as key principles to manage and prevent conflicts of interest within an organization. The report underscores the significance of these principles to maintain ethical standards and protect organizational interests.

The conflict of interest occurs at the workplace when the personal interest of an employee does not
align with the organizational interest. In other words, the conflicts of interest occur due to the dual
relationships of an individual in the workplace. The organizational conflict of interest indicates the
situation when an institution fails to act impartially due to its relationship with other organizations.
The conflict of interest can be observed in the following cases—
• The interest of a public official contradicts with the professional position
• The same person is in the position of authority in two organizations and the interests between
these two organizations contradict with each other
• When the responsibilities of an individual contradict with each other
To mitigate the risk of conflict of interest, the organizations need to identify the root causes. The
conflict of interest can be caused due to the tendency of nepotism and self- dealing. The nepotism can
be described as the tendency of favouring some individuals over others (Kennedy & Houston, 2016). The
common example of nepotism in an organization is, showing preference to close friends and relatives
while hiring them. The self-dealing occurs when an authorized individual in an organization has some
contradictory interest outside the business. In such cases, the individual may focus on meeting own
interest rather than that of the organization leading to self-dealing.
The conflict of interest does not indicate the situation of criminal activity (Johnston, 2017). For instance,
an employee can hire a close relative for a position. It cannot necessarily be considered as the nepotism
unless the relative is given with favour such as higher salary. However, unless none of the parties is
violating the rules and regulations or the organizational policies, there is no criminal offence considered.
In the case of private organizations, the policies are incorporated to reduce the risk of nepotism and the
self-dealing. The private organizations can also focus on having a lawsuit, in the case; an incident of
conflict of interest is identified. The government organizations also, take legal help to prevent public
employees to get involved in a situation that can lead to a conflict of interest.
The conflict of interest can be managed by incorporating the following principles in the business policies
—
• Duty of care: Duty of care facilitates the employees to attend the meetings, asking questions
against the organizational policies, sharing independent views and attending the meetings with
adequate preparation.
• Duty of Obedience: The duty of obedience encourages the employees to achieve and protect
the organizational mission. The duty of obedience also encourages the employees to comply with the
laws and organizational policy.
• The duty of loyalty: The duty of loyalty encourages the staffs to disclose the conflicts of interest
with the management. The duty of loyalty also a encourages the staffs for adhering to the policy and
avoiding the use of the organizational assets for own benefit.

References:
Johnston, M. (2017). Conflict of interest (Vol. 1). LE Publishing.
Kennedy, D. W., & Houston, S. M. (2016). Conflict of interest.