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- Elon Musk, Investor & Entrepreneur
6 min read
By Lisa Teh

What is true about the management of conflict of interests?


Conflict of interest is a complicated subject. There are many ways that you can run into a conflict of interest at work, either through a personal reason or another work conflict. They are difficult to work around and present many problems. 

Since a conflict of interest is often so difficult to avoid, it is good to find ways to manage it while dealing with different conflicts. Most conflicts of interest deal with a person being loyal to dueling or competing companies. Though there are many other kinds as well that present unique managing problems.

It is also critical to be able to understand conflicts of interest that you may run into while managing others. Conflicts of interest aren’t limited to employees and others that you manage. It can also happen with managers and supervisors. Understanding how a conflict of interest can impact your ability to be an effective manager is crucial to avoid those problems.

Knowing the impact while dealing with a conflict of interest is also crucial. It does not just mean problems in the workplace for employees and managers. Depending on the issue at hand, some conflicts of interest can be illegal and need to be avoided.


To effectively manage to avoid or work around a potential conflict of interest issue, you will need to understand how conflicts present themselves. This way you can find ways to avoid potential conflicts of interest and plan for when they arise.

The most common kinds of conflicts of interest are typically easy to avoid. Nepotism is a common type of conflict of interest and can be avoided by not hiring family or friends. When someone that you have a past relationship with is hired, the best way to avoid a continued conflict of interest is to avoid making decisions about their performance or employment.

Other kinds of conflicts of interest are harder to avoid since only a limited number of people may be aware that it is going on. Managers may pay themselves or others close to them more than they should be paid. This can be avoided by having transparency in pay models and ensuring that everyone is paid similar amounts according to ability and job satisfaction.

Self-dealing is a conflict of interest that can be difficult to discover unless you’re close to the source of the issue. Though it can also be a company-wide problem. Self-dealing is when a company acts in its own best interest over the interest of its client after a financial transaction. It can be common in financial institutions.

A conflict of interest isn’t always easily defined. People who have family or friends in a competing industry need to take care that they can adequately separate their friends and family business interests from their business interests. Companies expect that your interests will be with the company you work for, not for the competition.

Even when a conflict of interest has a positive effect on your company, it should still be avoided. Companies that work with supply chains can often run into a conflict of interest as relationships develop with the supplier. This can get you great deals and avoid paying prices that the competition might have to pay, but it can cause problems when other companies discover it.  


A conflict of interest can have different kinds of impacts on the workplace. Even small impacts, like company morale, can have long-lasting effects. If your employees and coworkers don’t think that the work environment is fair, it can cause people to leave the company and stop others from working there as well.

Keeping company morale up is the best way to keep employees and coworkers at your company. If people know that their concerns and opinions will be considered, then they know that their input is valued. Even if it’s not implemented.

When people get hired because of nepotism or when certain people get favored when they shouldn’t be because of outside relationships, that causes people to think about how they fit into the company. If people work hard and don’t get properly acknowledged for it, that makes them feel unappreciated.

Unappreciated people leave their place of employment and find other places to work for. If word spreads about how employees are treated, that may cause your company to get fewer applicants and people working for you. Something as simple as hiring a family member or a close friend without considering how that relationship will work to avoid a conflict of interest can have devastating effects.

The effects of a conflict of interest can go beyond company morale. Depending on the business you work in, a conflict of interest can be illegal and get you fined or jail time. Many government jobs have rules against different conflicts of interest with steep penalties for breaking conflicts of interest protocols and procedures.

People with government jobs are often restricted from hiring or working with family members in certain capacities. They are also restricted from coordinating with certain private companies and educational institutions. This is to prevent the power that comes with government jobs from being abused. Family members of the employee may also have some restrictions to avoid a conflict of interest.

Knowing what the impacts are with conflicts of interest can help avoid running into a conflict of interest as a manager. Even something as simple as keeping up company morale can be affected by a conflict of interest. Conflicts of interest can also lead to fines and jail time, which everyone wants to avoid.


A conflict of interest is something that leads people to have conflicting interests in their job. It can stem from your personal or professional life. Being able to recognize a conflict of interest can help you and your company avoid having a potential conflict and work around them when they arise. Any conflict of interest can lead to devastating effects, including legal ramifications.              

About the author


Co-Founder of Lisnic 🌏 Founder of CODI Agency (Digital Marketing)📱
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