When my interest does not fit with yours

Monday, 16 april 2018 | Redacción CEU

Every day we make decisions as employees, businessmen or managers, but also as part of a collective, members of a community, components of society and within the own family. Life is full of moments in which is necessary to choose one way or another. These dilemmas are not always easy to solve. On the labor path, it is more likely to find this type of complex crossroads, situations where professionals test the limits of the ethics and the moral. They are turning points that will test their values, principles and fundaments. What kind of solutions can be adopted from the business framework? How to ensure that decisions within an organization are not being made according to particular interests? How can the professionals that face conflicts act?  Who beats whom in this battle of interests?

 

The conflict of interest is one of the great dilemmas on which business ethics are based. In the business world, professionals face situations that measure their ethical commitment day-to-day. There are many examples. When the manager of a company must choose between a supplier that is also a shareholder or another that is more appropriate for the job. When the professional responsible for hiring the staff in the company is related to one of the candidates for the vacancy offered. When an employee should advise on the appropriate adoption of new technologies over which he/she has no specific training and that could result in hiring another professional. How to handle the conflict within the multitude of scenarios that could happen?

The “who is who” in the battle of interests

As the term itself suggests, the conflict of interest in the business framework occurs when, in the performance of an activity, the particular interests of one subject face those from another actor, whether it is a professional, a company, an institution or an organization, with who he/she maintains an obligation. The correct ability to make decisions in these scenarios will be influenced and affected by the possible economic, labor or personal benefits that may be reported. Consequently, the good judgment of the subject in question will be in doubt.

Conflict of interest is inevitable. Conjunctures of this type frequently occur in the course of any professional's work routine. Being usual circumstances in the business world, in some occasions,  no special attention is paid to its management. However, these neglected moments shape the “who is who” of both professionals and organizations. Its mismanagement can have serious consequences  like the company's bad reputation, the beginning of a path before the corruption way or, even, the transgression of the law. It also outlines important issues outside pragmatism, such as the integrity, morality or spirituality that define the hallmark of the company.

When my interest does not fit with yours

How to act facing the conflict of interest?

But not all conflicts of interest jeopardize the infringement of the professionals' ethical principles, because in a broad sense of the concept, even the self-interest on the salary that an employee wants to earn facing the one that the employer wants to pay, can be within this conception. It will be the business ethics and the values of the employees and employers that ensure the good management of these situations.

Companies must develop a regulation that includes this type of conflicts, designed to identify risks, to avoid them and when they are inevitable, to address them. However, since the conjunctions are as specific as their protagonists, and as diverse as their scenarios, this type of circumstances may not  always be included in the written rules. Another alternative when dealing with these problems is to designate an Ethical Committee or an Internal Audit Department within the organization itself; that is responsible for this type of situations when they arise and design action policies within the Management Boards, joined together to an ethical code.

Many times, the final responsibility about the decisions will be in the hands of the professionals. Because they are habitual but complex dilemmas, this type of circumstances will not always be detected by the competent organisms, those in charge, the bosses or the board members. In those cases, it will be the ethical values of the person that will guide their judgment. The work of the companies is therefore very important, and, particularly the one from the Human Resources departments, on the promotion of a culture of values and a code of ethics that are solid within them.

Faced with these conflicts, professionals can choose between different alternatives like delegating conflicting decision-making to a person free of conflict, abandoning the particular interest that interferes with the objective decision, communicating to a higher organism the situation so this one takes charge of the issue or increase the level of transparency to mitigate the imbalance situation. Although this last option is a key to identify these situations and promote objectivity and good behavior within companies, it will not always be enough to resolve the conflict by itself .

When the interest of one individual does not fit with the one from the other, the subject must not fall into the complete cession of this without a responsible judgment. For example, the interest of a company compared to the one of an employee can be obtaining an exacerbated economic benefit without measure, in a previous step to corruption, a lack of morality or in opposition to the legal norm. Acting according to the morality, the commitment to the common good and the law will guarantee that the professional comes free of conflicts and with a clear conscience. The good functioning of the organisms depends on the people that make them up in a large extent , that is why it is important for companies to take care of both the professionals who belong to them and their principles, fundaments and values.

At The CEU IAM Business School, we are aware of the importance of values and ethical commitment in the business world. For this reason, we have designed our Global MBA, with the aim of that those professionals who lead the business projects of tomorrow are also capable of doing so with a deep ethical sense of business.