Institution of affiliation
Confliction of Interests in an Organization
Conflict of interests in an organization occurs when stakeholders have the ability to derive financial or non-financial benefits based on their decisions. In a business setup, stakeholders include the management, shareholders, employees, customers, and the local community. Conflict of interests can be minimized through the policies on checks and balances so as to minimize the exposure of stakeholders to positions that may make them prioritizing themselves over the organization.
A good example of stakeholders that usually conflict are employees and shareholders. The conflict between these two parties normally occurs due to the differences in their interests in the organization. Employees’ motivation in the organization are mainly due to the salaries and other forms of income that they earn. On the other hand, shareholders’ interests are interested in the organization so as to earn dividends. The impasse arises because shareholders prefer costs minimization strategies, including a reduction in salaries, to increase profits. On the contrary, employees prefer policies that have attractive salary packages (Jordan & Troth, 2002).
Despite the conflicts of interests, stakeholders need each other; employees need jobs while shareholders need workers who can run their business (Jordan & Troth, 2002). In light of this, taking a firm position will hurt both sides in the long run and hence a reasonable compromise is required (Lipsky, 2005). Some of the compromises that the stakeholders can make include tempering their demands with fairness depending on the financial position of a company and its performance in the industry (Velasquez, 2002). Therefore, this approach ensures that the company continues with its operations and the management is able to address the concerns of the employees.
To sum up, stakeholders in a business normally advance their own interests. However, fairness and compromising are essential for ensuring that an organization does not go under. Since all stakeholders need each other, they should all be willing to compromise to ensure the organization remains successful. Moreover, the organization can implement essential checks and balances to minimize the level conflicts of interests within it.
Jordan, P. J., & Troth, A. C. (2002). Emotional intelligence and conflict resolution: Implications for human resource development. Advances in Developing Human Resources, 4(1).62-79.
Lipsky, D. (2003). Emerging systems for managing workplace conflict: Lessons from American corporations for managers and dispute resolution professionals. San Francisco, CA: Jossey- Bass.
Velasquez, M. (2002). Business ethics: Concepts and cases (Vol. 111). Upper Saddle River, NJ: Prentice Hall.