Sensation and the Sensory Organs (Vision and Audition)
With the help of our senses we are able to make sense of the world we live in. The study of sensation or senses is crucial from the point of view of psychology as because of it consciousness is possible. Let us understand the role played by different sense organs in the process of sensation. […]
Leadership-Member Exchange (LMX) Theory
Informal observation of leadership behavior suggests that leader’s action is not the same towards all subordinates. The importance of potential differences in this respect is brought into sharp focus by Graen’s leader-member exchange model, also known as the vertical dyad linkage theory. The theory views leadership as consisting of a number of dyadic relationships linking […]
Fiedlers Contingency Model
Fred E. Fiedler’s contingency theory of leadership effectiveness was based on studies of a wide range of group effectiveness, and concentrated on the relationship between leadership and organizational performance. This is one of the earliest situation-contingent leadership theories given by Fiedler. According to him, if an organization attempts to achieve group effectiveness through leadership, then […]
Effect of Communication Barriers in Business Communication
An organization is an individual’s first home as one spends the maximum time here only. No organization runs for charity, it is really important that the organization achieve its goals. How does an organization become successful? How will an organization achieve its goals?. The employees are the assets for any organization and the profitability of […]
Departments as Fundamental Units of Administrative Organizations
The line agency in its traditional form exists as departments. Departments are the fundamental unit of administrative organizations and carries out all the functions. There are different shortcoming and problems associated with this structure as well but before we dwell into that, we shall make an attempt to understand the basic principles on which the […]
In recent months, we have seen a spate of scandals involving top corporate houses and sportspersons about how they have been implicated in conflict of interest issues. These scandals have dented the reputations of many corporate houses, media houses, and sports management companies. At heart of the issue is whether employees in corporates, mediapersons, and sportspersons can continue be employed in their current occupations and at the same time be involved with a competing venture that presents conflicts of interest to both parties.
The point here is that conflict of interest arises when an individual in a particular employment has links with another venture that is in the same line of business or has interests that intersect and overlap with the interests of the former. For instance, if you are employed in a technology company and at the same time spend your spare time developing technological applications that you intend to sell in the market, then your current employment and the spare time venture are conflicting with each other as both of them are targeting the same audience.
Further, if you are a corporate honcho and your spouse or your children are employed in sectors that have the same line of business as your company, you must either declare this upfront so that there are no controversies or ensure that your vocation and your spouses’ vocation do not overlap.
Organizations and individuals must handle conflict of interest in a professional manner. Often, the practice in corporates is to ask employees to declare any potential conflicts their or their family members’ employment and business interests’ conflict with each other.
Further, most multinationals ask their employees to abide by the guidelines on what ought to be done in cases of conflict of interest. This usually takes the form of issuing strict rules about what constitutes conflict of interest and what constitutes appropriate behavior in such cases.
Further, conflicts of interest also arise when employees in a particular company invest in stocks and equities of competitors as well as their own companies. In this aspect, conflict of interest also overlaps with insider trading guidelines that are issued by all companies. The key aspect here is that conflict of interests must be dealt with severely if the employees are found to be violating them as they have legal and reputational ramifications. For instance, the law prohibits individuals from having interests in competing entities while being employed with a particular company. Apart from this, there are strict injunctions on governmental employees having private employment as well as politicians holding offices of profit. These laws have been passed to ensure that probity and uprightness in public life is maintained and the rules adhered to.
The reputational aspect is another facet of the conflict of interest issue. For instance, if an employee is found to be violating the conflict of interest guidelines, the ensuing scandals do a lot of damage to the companies hurting their brand image and reputation.
Further, companies lose out to their competitors when it is found that employees have interests that are not strictly in line with the interests of their own. Hence, many companies in recent years have been acting swiftly and strictly against conflict of interest issues. The issue becomes serious when employees use their knowledge of the company’s operations to further their private interests, which means that in effect, they are resorting to violation of the ethical and value based aspects of the professional employment.
Finally, conflicts of interest are unavoidable many times because of the rather complex and interconnected nature of modern business and society. Hence, corporates ought to take expert legal opinion in drafting rules and regulations in determining what constitutes conflict of interest and what can be acceptable behavior.
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