Things you should know about Conflict of Interest on business

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Things you should know about Conflict of Interest on business

Things you should know about Conflict of Interest on business

Conflict of Interest ory Conflict of interest in business is an over-general experience in the business world, and problems that must be considered by the owners and managers to deal with and act for the best interests of the company.

The general definition of the Conflict of Interest in the business world is when an employee places its own interests above the interests of the organization. Then do things that endanger operations, profits, or even organizational trade secrets.

This creates potential trust issues between individuals and businesses, especially if individuals lead to potential legal actions or create poor atmosphere at work that can paralyze the spirit of employees. The conflict of interest in this business must be avoided so that the business becomes good and stable.

Examples of Conflict of Interest on Business

The following are examples of conflicts of interest that occur in business or companies

  • An employee has loyalty that is contrary to the operation or business mission. Like working for a part-time business competitor or freelance.
  • Someone cannot be trusted to make business decisions that are impartial because of personal relationships, such as a manager who is dating colleagues and on the other hand must consider progress on the performance of similar qualified employees.
  • An employee who is looking for personal benefits rather than business performance, such as when an employee receives a prize in return to choose an offer.

The most common solution when conflicts of interest in the business is to make the employee not involving employees on each event where conflicts can affect decision making or can also dismate employees.

In severe cases, it might be a policy for management to consult a lawyer who is experienced in business law to ensure that the rights of employees are not violated and the company opens up to legal action.

Impact of Conflict of Interest on Business

The impact caused when the Conflict of Interest in the workplace is the destruction of the employee’s reputation, the poor work relationship with coworkers and the last is potentially losing work due to dismissal of superiors.

The smother in the business impact of the Conflict of Interest is potentially no one believes in your business, besides that your business will be bad and income will decline. Indeed, at first you benefit when you attach it from your business destination. But the impact is also much worse than you thought before.

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Not to mention, there is a possibility that the atmosphere at work becomes bad due to employees suspecting each other. A businessman must make an employee handbook that clearly describes the code of behavior and gives punishment because it acts in a contradictory manner.

Conflict of Interest expressed can erode the trust that the company might have. Trust in the ability of employees to carry out their role tasks with the company. Things can cause suspicion of employee relations with clients or other outsiders. There may also be reluctance to share important information with employees. However, the conflict of interest can vary so that it involves a crime.

Category Conflict of Interest in Business

1. Conflict of family interests

Conflict of family interests is common when family members receive special treatment only based on their relationship with other people in a business. The general term for this practice is nepotism. For example, maybe the son of the owner who receives special treatment when it is made candidates to lead the company than employees who are more feasible or a salary increase that is not based on performance.

2. Conflict of Asmara Interest

Conflict of interest because the romance of someone in certain companies will result in fatal things for the company. It could be because the sense of liking with the employee, the salary can be raised or given special treatment. Even though the performance of the employee is not very good. The owner of the company must be selective in this interest, if left will make the company’s image bad.


3. Conflict of financial interests

Financial conflict arises when an employee (or even a director) benefits from payment of money. Receive prizes with the implied intent to influence employee decisions or actions or even provide services with discounts that benefit the employee.

This financial interest is common because an employee does not have enough salary for his life so he began to commit fraud against the company. For this reason, the company must know the condition of the employee so that this conflict does not occur.

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4. Hidden conflicts of interest

Trade secrets are usually valuable commodities that provide business advantages to competition. The secrets and ways owned by companies in developing this business must be maintained. But there are employees who deliberately share this confidential information with other companies.

Well, the behavior of an employee can cause irreparable damage to an organization or company. It can be said that this employee does not have good ethics because it has harmed the company.


Every business, no matter the industry or place of operation or the items they produce or the services they provide are susceptible to Conflict of Interest which causes problems. Unfortunately, this is a human nature that can occur even with the most trusted and reliable employees.

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