Conflict of interest is when someone puts their personal interests above those of the organization he/she works for. Or when a person uses their influence to get others to make decisions in favor of themselves without considering the project outcome. This means that one’s personal interests are more important than his/her professional obligations. The decision allows the individual to benefit personally regardless of the project’s outcome.
Conflicts of interest play an important part in a person’s professional and personal lives. If not dealt with promptly, it can cause serious damage to one’s reputation and career. It is crucial to be aware of what constitutes conflict of interest in order to manage it properly. Here are some examples
Hire your relative or friend rather than other candidates who are short-listed for the exact same job.
Share confidential information with a vendor who is a friend or relative.
Participating in vendor selection if your spouse or close relative is participating in the bidder conference.
Accepting high-end gifts from vendors. It is acceptable to give a gift to a client or customer on occasion. However, you should check your company policy before accepting any favors or gifts from them.
Praise your friend or relative to get the new contract.
Assist or guide a friend or relative in business who is your employer’s competitor on the market.
Accept the invitation to audit your wife’s company.
Favoriting supporters and using authority to give support, protection, or favors based on loyalty instead of ability is a form of flattery.
Work-related decisions made in favor of a family member or other close personal relationships, regardless of merit.
There is a risk of perceived or actual favoritism in merit selection, promotion and performance management, salary, bonus, and other decisions.
Example
Peter was her project manager for a network enhancement project. Peter was part of the selection committee for the project that was to be outsourced. John was the vendor Peter had previously worked with. John wanted to win the bid. Peter calls him one day after the RFP (Request For Proposal) was posted. He said that he had great news to share. His company had chosen 10 lucky clients to attend a conference that would be followed by a trip in Switzerland. Peter replied, “Thanks for considering us and selecting us. We both know that this isn’t a conference. It would be wrong for me to accept it.”
John tried to convince him by mentioning names of top companies that had agreed to attend this conference. Peter also asked about the conference’s other benefits and outcomes. Peter replied, “I appreciate your offer, thanks for selecting me, but I don’t want to thank you.” Your company is on the list for our new contract. I’m also part of the selection committee for RFP. Accepting your invitation to attend the conference would be a conflict in interest. We are not allowed to accept gifts from vendors because of the conference’s value.
Peter must have felt relaxed in the above example, as he could award a contract solely on the merits of vendors. This would have been a conflict if he had accepted John’s offer and then awarded him the contract. This is a violation of PMI guidelines. It also doesn’t look good for him personally. It is important to understand and find out if the organization has a policy on conflict of interest.
If your organization doesn’t have a policy on vendor favors and gifts, you can ask the concern department for a limit based on the situation. It is safer to decline a gift that you aren’t sure about than to accept it, and then lose your credibility and reputation due to an incorrect judgment.