Organizational Conflict of Interest

Association of Construction & Development
December 9, 2013 — 2,619 views  

Whenever a person, because of his/her relationship or activities with another, fails to be impartial, is unable to act objectively in performing his work, or has an unfair advantage over others is said to have an organizational conflict of interest (OCI). This has become a major issue in almost all organizations and is coming in the way of the smooth functioning of these companies. OCI mostly occurs when company acquisitions and reorganizations are happening. These problems, if not solved quickly, can snowball into a serious issue and will affect the growth as well as the reputation of the organization. The incidents of OCI occur most commonly in politics. For example, certain ministers who have the ownership of many companies also hold key portfolios in the government and bring in laws and regulations that may in some way benefit their companies.

Elements of Conflict of Interest

To rein in the problem of conflict of interest many organizations have brought into effect  certain policies which has now become widespread in many other areas. There are three basic elements of conflict of interest that these policies intends to tackle:

  • Primary Interest
  • Secondary(Private) Interest
  • Conflict itself

The primary interest varies from profession to profession; For example, for an architect working on a government project, his primary interest would be to address the needs of the project and how it is being carried out and deliver it to the client on time. The secondary interest for him would be to gain some financial benefits by providing his services outside of the government project, like for designing a house for an individual. If he/she doesn't compromise on his effort and time to his duty towards the government and still is able to work on both his interests without getting influenced ,he/she is fairly successful in tackling the problem of conflict of interest. The conflict does not necessarily compromise on the primary interests, but it creates a situation where there exists a risk of the primary interest getting neglected.

How to Manage the Challenges of Organizational Conflict of Interest

To ensure that the problem of conflict of interest doesn't go out of hand certain steps need to be taken:

  • Create responses and strategies: It should be clearly communicated to the employees and management about what is expected of them and help them to distinguish between the responsibilities of the organization and individuals.
  • Determine the areas of risk: The likely areas of danger must be identified at the earliest to limit the damage done when a conflict arises.
  • Communication with all stakeholders: To maintain transparency it is indeed necessary to have good communication with all your stakeholders so that the perception of a conflict not being managed properly doesn't arise.
  • Educate the staff and managers: It is important that all the employees know what to do when they come face-to-face with a situation of conflict of interest.
  • Enforce the policy: All the policies once adopted must be enforced strictly without fail.
  • Review the policy: The policies adopted must be constantly reviewed in regular intervals.

It is in the best interests of all to stay away from any kind of conflict of interest to grow and to maintain a clean image in the corporate world.

Association of Construction & Development