ED 238:Human and Organization Conflict: The Discovery of
Conflict of Interest
Introduction
Conflict is a natural part of any human system, including organizations. One of the most critical
and often underestimated forms of organizational conflict is the conflict of interest (COI) — a
situation where a person’s personal interests might compromise their judgment, decisions, or
actions within an organization.
This report explores how human and organizational conflicts emerge when a conflict of interest
is discovered, the types and implications of such conflicts, and how they can be managed or
resolved.
1. Understanding Conflict of Interest
A conflict of interest arises when an individual in a position of trust (such as an employee,
manager, or board member) has competing personal or financial interests that could interfere
with their professional duties.
Types of Conflict of Interest:
Actual conflict: A real and current conflict between personal and professional interests.
Perceived conflict: When it appears to others that a conflict may exist, even if there isn’t
one.
Potential conflict: A situation where a conflict could arise in the future.
2. Human and Organizational Reactions to COI
When a conflict of interest is discovered, it often results in tension between:
Individual values vs. organizational ethics
Loyalty to the organization vs. personal gain
Short-term benefit vs. long-term trust and reputation
Reactions from Individuals:
Denial or minimization of the conflict
Justification of their actions
Fear of job loss or reputational harm
Organizational Response:
Internal investigations
HR or legal interventions
Implementation of disciplinary actions
Damage control for public relations and internal morale
3. Case Examples of COI
A procurement officer awards a contract to a company owned by their relative.
A researcher fails to disclose that they are receiving funding from a company whose
product they are evaluating.
A board member votes on a policy that benefits a business in which they have a financial
stake.
These examples show how COI can compromise transparency, trust, and accountability,
leading to broader human and organizational conflict.
4. Impacts of Conflict of Interest
On Individuals:
Legal consequences
Loss of credibility and trust
Career setbacks
On Organizations:
Reputational damage
Loss of stakeholder trust
Legal liabilities
Decline in employee morale
5. Preventing and Managing Conflict of Interest
Prevention Strategies:
Clear COI policies and codes of ethics
Training and awareness programs
Disclosure requirements for employees and stakeholders
Conflict Resolution Steps:
1. Identify and disclose the conflict
2. Remove or isolate the individual from decision-making
3. Conduct an impartial investigation
4. Take appropriate disciplinary or corrective action
5. Review and revise policies if needed
6. Reflection: The Human Side of COI
Discovering a COI often creates ethical dilemmas and emotional strain for all parties involved.
Individuals may feel conflicted between loyalty and integrity. Organizations must balance
fairness and accountability. This highlights the importance of a strong ethical culture and open
communication.
Conclusion
Conflict of interest is not just a technical or legal issue — it's a human and organizational
conflict that tests the values and integrity of individuals and institutions alike. The discovery of a
COI can be disruptive, but with clear policies, ethical leadership, and open dialogue,
organizations can navigate these situations responsibly and protect their long-term credibility.
How to manage and discover conflicts of interest
Effectively managing conflicts of interest requires a multi-faceted approach
centered on transparency and clear policy.
1. Create a clear policy: Organizations should define what constitutes a
conflict of interest and outline the process for disclosure and review.
2. Require disclosure: A formal process for employees to disclose
potential conflicts is essential. This can include regular, mandatory
disclosure statements for key personnel.
3. Encourage a "speak-up" culture: A psychologically safe workplace
empowers employees to report concerns without fear of retaliation,
allowing potential conflicts to be addressed before they escalate.
4. Implement mitigation strategies: Once a conflict is identified, the
organization must act. Strategies include recusing the conflicted
person from a decision, restructuring responsibilities, or severing the
relationship that causes the conflict.
5. Conduct regular training: Employees, especially those in high-risk
roles like procurement or management, should receive regular ethics
training to help them identify and handle conflicts.
Human and Organization Conflict: The
Discovery of Conflict of Interest
A conflict of interest (COI) in an organizational context arises when an
individual's personal interests—whether financial, professional, or
social—clash with their duties to the organization
The potential for bias compromises objectivity and can lead to
decisions that harm the organization for an individual's personal gain.
