Manual for Azerbaijan companies Rena Safaralieva

customers, consultants, suppliers, advertisement specialists, even family members and friends—defines 

the reputation of that person, and, what is more important, can affect the image of a company. Objectivity 

and fairness in dealings with others in the work environment are very important concerns. Violation of 

these principles in the work place leads to conflict of interests or collision of personal and business 

interests.  

 

There are several types of conflict of interests.  The most frequent types of these conflicts are: the 

possibility to derive personal gain from relationships with partners; abuse of personal relations in order to 

influence a decision making process; working for a competing firm; close personal and family relations 

with suppliers’ firms, relations with competitors, etc.  

 

Psychological surveys have found that, for the most part, conflicts of interest occur most frequently where 

one finds: 

 

•

 

a serious deficiency of managerial structures;

  

•

 

a lack of clear distribution of rights and obligations of personnel; 

•

 

a lack of stability and harmony in the work regime;  

•

 

material problems of personnel, and, consequently, a lack of work incentives;  

•

 

an erroneous assessment of employees’ performance;  

•

 

a psychological incompatibility among employees resulting from professional, personal, age and other 

differences;  

•

 

discord between different staff groups and consequent violations of accepted norms of behaviour 

 

Many codes of ethics of foreign companies have special provisions to prevent conflicts of interest. 

Employees are instructed how to behave in individual cases. Summarising provisions of such codes, we 

can distinguish several areas, which are most frequently responsible for conflicts of interest. 

 

 

1.  Regulation on gifts and souvenirs 

 

As a rule, companies prohibit accepting any gifts, except for:  

1)

 

items with a company’s logo presented in an official setting, for example, a watch, tie, shirt, etc.; 

2)

 

inexpensive articles presented by companies during promotional campaigns;  

3)

 

charity donations; 

4)

 

articles of a cost under a fixed amount.  

 

The World Bank establishes a limit of $100

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, and International Paper $25 as the maximum value of an 

acceptable gift.

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Should employees of firms and their family members not possess return gifts and souvenirs in the size of 

nominal cost of the gifts received, they should abstain from borrowing, advance payment or 

compensation to actual and potential customers of the firm. 

 

 

2. Close friendly or family relations with employees of goods or services supplying firms  

If employees or managers of a company have close personal or family relations with representatives of 

suppliers of goods and services, this can lead to a conflict of interest. For example, if an employee (chief 

executive, manager, department head) assigns tasks related to advertising to an advertisement firm of his 

or her friend, relative or classmate with personal gain in mind and not in the interests of the business, this 

contradicts ethical norms and principles of free competition. However, this does not mean that it is 

impermissible to have business relations with any firms where friends or family members are employed. 

If co-operation with this particular firm is reasonably justified and management has been notified of the 

existence of non-business relations and raises no objections, such practice is quite acceptable. The 

rationale here is that not every potential source of conflict of interest will grow into a conflict. This 

principle of conflicts of interest is still not applied in Azerbaijan today. Orders to companies where 

friends and relatives work are viewed as completely acceptable. People are guided by the principle that “it 

                                                 

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 World Bank Group. Living Our Values. Code of Professional Ethics, p.10  

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 Ethical Behaviour and Personal Integrity Are The Core of Our Culture, International Paper Publication, p. 11  

 

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is better to bring benefit to somebody you know than to an outsider”. On the other hand, this practice can 

be partly explained by the  suspicious and uncertain attitude of still fragile Azerbaijan  businesses towards 

business relations with unfamiliar firms.  

 

3. Working for a competing firm 

 

Every employee holding a position in a company has access to certain information that might be of great 

value for a competing firm. This is why working for a competing firm might become a source of conflict 

of interest. Of course, this rule is not universal. For example, if a programmer works as a night-shift guard 

at a restaurant, this combination  of jobs  ethically might be acceptable, as it will likely not lead to a 

conflict of interests. Generally, if the first job does not jeopardize the second job, this situation will be 

acceptable. In any case, an employee should notify his employer if he or she holds another job. 

 

 

The labor legislation of the Azerbaijan Republic regulates most of the above provisions, however, it can 

not foresee all nuances, set forth in codes of ethics, for example, work dress code.  

 

SELF-ASSESSMENT  QUESTIONS TO CHAPTER II.  

INTERNAL CORPORATE ETHICAL PROBLEMS  

 

The questions below are designed to assess  your understanding of the material.  

 

Internal corporate ethical problems 

 

♦

 

What are the main reasons behind internal corporate ethical problems? 

 

♦

 

What principles guide relationships between managers and staff members? 

 

Human resources  

♦

 

How do you understand the term “human resources management”?  

♦

 

What are the main problems of human resources management”?  

♦

 

Explain reasons of discrimination in the work place.  

Sexual harassment  

♦

 

What is sexual harassment

? 

♦

 

What peculiarities of sexual harassment in Azerbaijan would you emphasize? 

 

♦

 

Have you encountered any other unethical cases of personnel treatment in Azerbaijan companies

? 

Employment and task assignment  

♦

 

What ethical rules shall be followed at employment? 

 

♦

 

What rights are job applicants entitled to at employment? 

 

Employee performance evaluation

 

♦

 

Explain methods of employee performance evaluation.

  

♦

 

What are the strong points of these methods

?

 

 

♦

 

What methods of disciplinary punishment of employees can be applied? 

Rights of employees  

♦

 

What rights in the workplace are employees entitled to? 

♦

 

How would you qualify the situation with employees’ rights in our country? 

Confidentiality  

♦

 

How do you understand confidentiality in the workplace?  

♦

 

What are the rules for handling confidential information for staff members?  

♦

 

What potential negative consequences can incur from passing over information to a competing firm?  

Conflict of interest  

♦

 

What reasons may lead to emergence of conflict of interest?  

♦

 

What kind of situations in the workplace can be qualified as conflict of interest? 

♦

 

What kind of circumstances eliminate potential conflict of interest ? 

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