Conflict of interest in business: when it can arise and how to prevent it

The average person spends most of his time at work. Carrying out various duties and solving many tasks, any employee may encounter a conflict of interest situation. Such moments arise not only in small businesses, but also in the public service. Most often, such misunderstandings occur when a person who is capable of obtaining personal gain intervenes in a conflict situation. Here, the ability to resolve the parties with the least financial and moral losses plays an important role. So what does the concept of “conflict of interest” mean, and how to solve this problem?

Conflict of interest

Distribution area

Conflicts of interest are a ubiquitous phenomenon. Similar situations can arise in any area of ​​life. Examples of conflicts of interest often occur between family members and classmates, among employees of the same organization, as well as in communities created by like-minded people. Moreover, their presence does not at all mean that people experience personal hostility towards each other. The most difficult areas in which conflicts of interest occur are the political and public sectors.

Types and structure ↑

The types of conflicts are very diverse and wide; their classification can be presented as follows.

1. Depending on the area in which conflicts arise:

• family (occur in the sphere of family relationships, between parents, children, various relatives);
• production (exist in teams and groups regarding work processes and discipline, between managers, subordinates, employees in general);
• social (manifested in the intense interaction of various social groups and entities: government, people, public organizations).

2. According to the sources of occurrence, conflicts manifest themselves as:

• business – arise in the structure of various institutions and organizations due to shortcomings in the structure and distribution of responsibilities;
• emotional - appear due to the individual psychological characteristics of each person, when people are incompatible in types of temperament or character, manifestations of the emotional-volitional sphere.

3. Depending on how exactly a person perceives conflicts at a subjective level, they can be:

• erroneous - there are no real reasons for confrontation, but the person subjectively perceives the situation as a conflict;
• potential – when the prerequisites for a conflict have already emerged, but the conflict itself has not yet arisen;
• true (real) - a “classical” conflict with open confrontation between its participants.

4. Based on the subjects who take part in the conflict, conflicts are divided into:

• intrapersonal (conflicts with oneself);
• interpersonal (between two individuals);
• intragroup (between spheres of influence in a particular group);
• intergroup (between different groups with conflicting positions and goals).

The structural elements of the conflict process look like this:

• parties (subjects, participants) of the conflict - all those who are directly or indirectly involved in conflict interaction;
• conditions of the conflict – acute and painful, quiet and sluggish;
• images of a conflict situation (the subject of the conflict) - the participants’ ideas about what exactly caused the confrontation;
• the results of a conflict situation - how the conflict ended, what its consequences are for each of the participants.

Definition of the concept

A similar phenomenon occurs in our lives quite often. It is simply impossible to hide a conflict of interest or quickly exhaust it. That is why a federal law appeared in Russia, which is called “On Combating Corruption.” This document interprets the concept of “conflict of interest” as a situation in which there is an indirect or direct personal interest of a municipal or government employee. At the same time, she is capable of influencing or is already influencing the performance of his official duties. As a rule, examples of conflicts of interest in the state and civil service relate to the receipt of material benefits by employees not only for themselves, but also for those third parties with whom there is a connection in the form of financial obligations.

In a 2009 report, Marilyn Field and Bernard Law pointed out that a conflict of interest is nothing more than a set of obligations that create risks that a secondary interest will directly influence professional actions or judgments regarding the primary interest. In other words, a similar phenomenon can occur in the case of existing personal benefit of a person who participates in the process of making a particular decision. This leads to damage to the interests of the company or society.

Let's look at some clear examples of conflicts of interest:

1. A pharmaceutical company awards a research grant to a doctor. In this case, the specialist begins to feel obligated to prescribe medications from this particular manufacturer to his patients, despite the availability of better alternatives. In this case, damage to public interests is caused.
2. A woman who is an employee of the company describes to the boss the merits of her nephew as a candidate for a vacant position. However, she does not mention her family ties with him.
3. The boss gives the employee the task of finding a supplier for the company. He offers in response an organization in which he himself is the owner of shares.
4. At the end of the year, the boss gives himself and his team impressive bonuses. Moreover, this is happening against the backdrop of the fact that the company’s owners are facing serious losses.

In most cases, such situations are not a violation of the law. This is why there are so many examples of conflicts of interest in any organization. But the existing problem will certainly call into question the employee’s reputation, reliability and honesty. In the future, this will negatively affect the work of the entire team.

Responsibility for elimination

As mentioned above, when determining who is responsible for eliminating conflict situations in the state civil service, it is enough to refer to federal legislation.

State and municipal employees, employees of state corporations, employees of organizations whose tasks are determined by federal authorities - all these entities are responsible for identifying and eliminating disagreements in service.

The entities mentioned above are directly responsible for coordinating such conflicts, since they lead to disruption of the work of government agencies. If the disagreement is not resolved, the corruption rate will increase, and the question of the competence and suitability of individuals for the position will arise.

If he talks about those who cause conflicts, then different types of responsibility are provided for them. An employee may be fired, suspended, or removed from office. Or they may get off with a warning if they independently take part in resolving the problem.

Signs and forms

The word "conflict" comes to us from Latin. Translated from this language, it means nothing more than “collision.” That is, a certain point comes when two or more members of a community or group begin to make claims on the same object. This leads to the intersection of the areas of interest of all those who are related to this situation.

Conflicts of interest are divided into personal and organizational. In the first case, the performance of official duties by a person comes into clear conflict with his own desires. Examples of conflicts of interest in the service sometimes concern, for example, a situation where, despite the fact that the task will not be completed on time, the employee wants to go home either at the end of the working day or earlier. After all, he has his own plans for the evening.

In the event of an organizational conflict, an entire private enterprise stands up to defend its benefits. In this case, the company takes into account only its own interests and tries to refuse or refuses to cooperate with the state, becoming unable to provide its services impartially. Responsibility for such a situation rests entirely with the manager, because such actions will certainly cause damage to the company as a whole. If damage is caused to structures supported by the state, then in this case the current legislation may come into force.

Similar situations arise in cases where the object of the conflict cannot be divided between the two parties laying claim to it. At the same time, no one wants to make concessions or seek compromises.

Examples

Examples can be found almost every day if you read regional media news about corruption.

Common examples of conflicts of interest include:

• conducting public procurement;
• competitions for vacant positions in state and municipal services;
• inspections of law firms;
• allocation of land plots and structures for development;
• privatization and alienation of property;
• interaction between enterprise management and legal entities.

A complete list of possible violations in this area cannot be found anywhere. It is impossible to predict all options. During the proceedings, the degree of responsibility, the presence of a controversial situation, and a thorough analysis of behavior are recorded.

Conflict resolution

Article number 11 of the federal law, which provides for combating corruption, identifies two subjects of settlement, as well as the prevention of conflicts of interest. One of them is a municipal (civil) employee. The second subject is the employer's representative.

In this regard, municipal and civil servants are vested, according to the law, with two main responsibilities. First of all, they need to take measures to help prevent any situations in which a negative phenomenon may occur. In addition, they must write a conflict of interest notice, an example of which is given below, to their immediate superior. Such a document should indicate not only the existing situation, but also the possibility of its occurrence. Moreover, a civil servant is obliged to take such a step already when he becomes aware of it.

To prevent a conflict of interest, this government representative should not maintain contacts with organizations whose activities are in an area that intersects with his official responsibilities. This does not apply to cases where he is obliged to perform such work.

As for notification of the likely occurrence of a conflict of interest in writing, the degree of personal benefit of an employee, according to current legislation, should be determined only by the official himself. His failure to take measures to resolve such a problem entails his dismissal.

What else you need to know about conflicts

All people periodically find themselves drawn into conflicts. When a person wants to achieve any heights, he often finds himself in conflict situations.

As a result, the goal he strived for turns out to be difficult to achieve. An interesting fact is that the individual begins to blame others for his own troubles, rather than himself.

In turn, others have the right to believe that the person himself is to blame for his own failures. Thus, one of the types of conflict discussed above may arise. It is worth considering that a person by nature may be a skeptic or simply have a negative attitude towards his environment.

If a person cannot learn to suppress conflicts with society, then he will often have to sort things out with his opponents. As stated above, it would be wrong to view any incident negatively. Sometimes conflicts can motivate a person to change for the better.

It is important to be able to anticipate possible conflict situations and be able to avoid unnecessary disputes or meaningless discussions. This largely depends on how much a person is able to communicate culturally, find a compromise, control himself and respect the interlocutor, no matter what he is

If you find yourself in a difficult situation, the main thing is to keep your emotions under control and adhere to generally accepted rules of etiquette. It goes without saying that this is very difficult, but this is the only way to emerge victorious from almost any conflict situation.

We hope that this article will help you avoid many potential conflicts, and if they arise, it will teach you how to get out of them in a constructive manner.

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Sample notification

How should a civil servant prevent the possibility of a personal problem arising in resolving a particular issue? To do this, he will need to write a notice of conflict of interest, an example of which can be filled out below.

The document must be drawn up in the name of the boss. The following is its title: “Notice of Conflict of Interest.” The text of the document indicates the last name, first name and patronymic of the civil servant, as well as his position. After this, a situation is described that provokes the possibility that a conflict of interest may arise. For example, it may concern the conclusion by an organization of contracts with a supplier company, headed by a close relative of the official. This is followed by the employee’s agreement or disagreement to be present during a meeting of the commission created to resolve this conflict of interest. At the bottom of the notification is the signature of the person who wrote it, as well as his full name and the date the document was compiled.

Let's consider typical situations and examples of conflicts of interest in the Russian civil service.

Relationships with relatives

There are examples and situations of conflict of interest in the public service in the event of an official’s personal benefit. Thus, an employee can be directly involved in resolving personnel issues regarding his relatives. In addition to close people, we can also consider other persons in respect of whom the civil servant is likely to receive benefits. Let's look at examples of conflicts of interest in municipal service:

• An employee of a government agency is part of a competition commission that considers candidates for a vacant position in his institution. One of the contenders is his relative.
• The duties of a civil servant include the implementation of certain managerial functions or issues of making personnel decisions concerning relatives or other persons close to him.
• In such cases, it is mandatory to write a notice about the likelihood of a conflict of interest. In this regard, the employer's representative must remove such an employee from those duties that involve his interaction with close people.

Conflict of interest in public service

A sign of a real conflict of interest appears in a situation where a person works in the personnel department of a state-owned enterprise and recruits his relatives or the relatives of someone working at this enterprise for the purpose of obtaining financial benefits.

Other examples:

• A civil servant is an intermediary in the provision of services or performance of work between companies in which his close relatives work. At the same time, in relation to the company that sells these services, separate functions of public administration are used.
• A civil servant provides paid services to the state organization in which he serves.
• A civil servant participates in a tender for the purchase of goods from a company whose director is a close relative.
• A civil servant participates, using the functions of public administration, in performing work for banking structures in which he has savings.

In life, no one is immune from participation, direct or indirect, in a conflict of interest. The most important points remain an objective assessment of your actions and knowledge of the legislation of the Russian Federation.

Performing other work subject to payment

An example of a conflict of interest in the public service is a situation when an official, as well as his relatives or other persons close to him, are going to perform or are already performing work for the organization where this employee works, under the terms of a paid civil law or other contract.

In this case, a notice of conflict of interest must also be drawn up. But at the same time, the employer’s representative does not have the right to indicate the impossibility of performing other work by this official.

An example of a conflict of interest in the public service is a situation where an employee, together with his relatives or other persons with whom beneficial interaction is carried out, performs work in a subsidiary, parent or other similar company in relation to which these employees perform managerial functions.

And in this case, a notification must be drawn up to the employer’s representative. In it, the civil servant must indicate the connections that take place between interacting organizations. The employer's representative, in accordance with the law, is recommended to remove the employee from fulfilling his duties in making management decisions in relation to the affiliated company.

An example of a conflict of interest in the civil service can be seen in a slightly different situation. It concerns the performance of work, the customer of which is the body in which the person holds a position. The employer's representative in this case must indicate the emergence of a conflict of interest. If a person does not take any measures to correct the problem, then he should be removed from the position he is replacing.

General resolution procedure

To understand the principle by which government agencies act when resolving disagreements, it is enough to refer to the provisions of the current law.

To resolve the conflict, remember that:

• the official is obliged to take measures to eliminate the problem, this is not his right, and it is unacceptable for the employee to ignore the conflict;
• the employer must be notified in the prescribed manner that conflicts of interest have arisen, which is also considered as an obligation and not his right;
• removing an employee from work or even from a position for a period of time by issuing an order. In addition, a person can independently make a challenge, which is also confirmed by relevant documents signed by the employer.

In addition, it is enough for a person to report a dispute and independently take measures to eliminate it. Thus, the procedure provides for the removal of a person from a specific job, regardless of his wishes.

An example of self-resolution: an official owns securities that belong to a corporation managed by a government agency. The employee informs the employer about this, while independently carrying out actions to sell the papers. Here it was not even necessary to remove a person from office.

Ownership of certain securities

Let's consider other cases of conflict of interest. Examples in the service of state or municipal bodies may relate to the ownership by an employee and/or his relatives of securities belonging to this organization. This must also be notified in writing. In this case, the securities must be transferred to trust management. In addition, the issue of their alienation may be considered.

Examples of conflicts of interest may also relate to situations where a civil servant has deposits in banks or other credit institutions in relation to which he exercises managerial functions. In this case, you will also need to write a notice of personal interest addressed to your immediate superior. Until the necessary measures are taken, the employee must be suspended from performing those official duties that relate to working with banks and credit organizations.

Cases involving property and courts

The situation may develop in such a way that the civil servant himself is in one way or another managerially connected with an institution to which he or his relatives have property obligations.

In this situation, management usually makes a verdict to remove the employee from performing his duties in relation to the desired organization. This will continue as long as he bears property responsibilities.

The civil servant must complete all duties that relate to a specific organization

When it comes, for example, to creditors, in addition to the standard notification procedure, it is imperative to achieve the complete removal of a civil servant from his duties to a credit organization. The same applies to organizations that themselves bear property responsibilities to civil servants.

Let's look at another hypothetical example.

The son of the magistrate V. was held accountable for paying alimony to his son from his first marriage, while the trial was supposed to take place in the magistrate's court district where V. works. In this case, he sent a written notification to his superiors about the current situation and was suspended from any duties related to this proceeding. This course of action is the only correct one and excludes any biased decisions in this case.

Conflicts of interest may also arise in cases related to legal proceedings.

Receiving services and gifts

It is also possible that a civil servant or his relatives receive various benefits. These could be discounts and loans, free services, payment of travel expenses, entertainment, etc.

Such gifts, if they are provided by organizations or individuals in relation to which the civil servant currently exercises or previously exercised managerial functions, are subject to a growing conflict of interest. To avoid such a situation, it is recommended to simply not accept these benefits. If the employer’s representative becomes aware of the receipt of gifts by a civil servant, he must assess the connection of what was received with the performance of the official duties assigned to the employee, and, if necessary, take disciplinary action.

Types of conflicts by area of ​​manifestation

Political conflicts are clashes based on the struggle for power and the distribution of power.

EXAMPLE: An example of a political conflict would be a confrontation between two or more political parties.

Social conflict is a contradiction in the system of human relationships. These contradictions are characterized by the strengthening of the interests of opposing subjects, as well as the tendencies of individuals and social groups. Social conflicts include both purely social and social-labor and labor conflicts.

EXAMPLE: Examples of social conflicts are pickets, strikes, rallies, wars.

Economic conflicts – this group of conflicts includes those conflicts based on contradictions in the sphere of economic interests of individuals and social groups.

EXAMPLE: An economic conflict can be called a struggle over the distribution of property, sphere of economic influence, social benefits or resources.

Organizational conflicts - they can be considered as a consequence of hierarchical relations and the regulation of human activity, as well as the use of the principle of distribution of relations between people.

EXAMPLE: A striking example of an organizational conflict is the use of job descriptions, assigning certain responsibilities and rights to an employee, the introduction of nominal management structures, the presence of certain provisions for the assessment and remuneration of employees, as well as their bonuses, etc.

Next, we should consider the types of conflicts in terms of the direction of impact and the severity of the conflict confrontation.

The sphere of education

In addition to public service, examples of conflicts of interest can be given in school. This applies to situations where a teacher, in parallel with his work activities, provides paid services.

The legislator seeks to combat such a situation when a teacher teaches a student who is studying at the school that is the place of work of this teacher. As a result of such actions, a conflict of interests arises in education. Examples of the provision of such paid services can be found everywhere. At the same time, some teachers artificially create situations in which the children’s parents or their legal representatives are forced to agree to the provision of tutoring imposed on them. Sometimes colleagues “supply” such students to each other. At the same time, they use the principle “you - to me, and I - to you.”

It is worth understanding that the law does not prohibit the provision of paid educational services. They can be provided by the school on a contractual basis. In this case, the teacher who conducts a regular lesson with the child, according to the curriculum, may well provide paid services. That is, this can be done legally only by being a representative of the contractor when concluding contractual obligations.

In what cases do the services provided by a teacher violate the norms of current legislation? This happens when the following conditions are met:

• the service provided by the teacher is informal and paid;
• the student is studying in the educational organization where the tutor works;
• the provision of a paid service becomes the cause of a conflict of interest for the teacher.

If all the above conditions are met, additional training does not comply with legal requirements and is prohibited. This also applies to those cases when the teacher does not teach a particular student. Indeed, in this case it is impossible to prove the absence of collusion among teaching staff.

A conflict of interest in the field of education is the contradiction that arises between professional responsibilities and a person’s personal benefit. After all, upon arriving at school, a teacher is faced with the possibility of acquiring material or intangible benefits. This is the reason for his failure to fulfill his professional duties or their improper performance.

Types of state issues

Nepotism is the provision of special privileges to those persons with whom the employer is related. Here the services provided do not follow the level of professionalism, which brings certain harm. Examples of nepotism are found in the Catholic Church and in bureaucratic circles.

Crownism is a type of favoritism caused by the provision of managerial advantages to friends, intimate partners and colleagues who do not understand the activities of the organization. The problem arises in the social and business contact between the appointor and the beneficiary (accepting the position). The latter is required to have direct loyalty and absolute support to the patron. Chronicleism is widespread in political circles and requires thorough verification.

Lobbying is the activity of a private individual, which implies some influence on the state and local governments for the sake of personal interests

It is important that such a person is not listed in the structure where he intends to bring his pressure. Lobbying can be on legal grounds - petitions, financing - and unauthorized (direct bribe)