Conflict of Interest in Business Ethics

Oluwafemi Olafusi Written by Oluwafemi Olafusi · 1 min read >

At the Lagos Business School MBA, I had my first class on business ethics two days ago. As I thought about how ethics contribute to a world where people are cared for because of their value and dignity, I also looked at it from an individual perspective, specifically for managers. I asked what the fundamental motivation is for someone to be truly ethical in a business environment.

In business and real situations, disinterested and selfless concern for the well-being of others is what is believed to be ethical. However more often than not, personal interest and external motivation always determine how far managers can go. Managers often face the problem of how to balance ethical demands and economic realities or personal interests when in a work environment. All human action or inactions is ultimately motivated by self-interest. Once there is a hint of self-interest, ethical motivation cannot be presumed.

 An organization is truly ethical if has removed all forms of external interest for employees. The external interest is the traditional managerial tools such as authority, power, incentives, and leadership. When business managers rely on these motivational tools, it can be argued that it is a form of coercion and unethical. Organizations must ensure that workers’ work tasks are compatible with their own personal “projects” to operate ethically and eliminate the need for external incentives or interest.

An organization’s intentions may be good, but eventually, self-interest will show its ugly head. The majority of people’s motivations are a perplexing blend of self-interest, altruism, and other factors. However, a managerial act cannot be ethical unless it in no way promotes the manager’s self-interest, choosing not to address this intricacy. This type of sterile analysis of intricate human motivation leads to the implausible conclusion that managers only act morally when it is costing them.

Some business attempt to develop incentives to promote ethical behaviour on the part of their employees. How can a manager’s behaviour be deemed ethical if the workplace culture she works in rewards her for doing good? Moral behaviour isn’t ethical if it’s influenced by “external stimuli” like senior executives who “model appropriate behaviour” or “supply others with incentives meant to induce proper behaviour.” The clear message is that a manager can only be fully effective in a poor company.

To address conflict of interest and business ethics for employees, two steps are to be taken. The first one, a business should invent ways to accomplish what is morally just and socially responsible without employees jeopardizing their careers and company. Second, the business should accept that there is a conflict of interest between ethics and interest.  As a result, the business should collaborate with managers in designing new corporate structures, incentive programs, and decision-making processes that are more accommodating of the entire employee, while also recognizing his or her altruistic and self-interested motivations.



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