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
There are several types of conflict of interests. The most frequent types of these conflicts are: the
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
a serious deficiency of managerial structures;
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:
items with a company’s logo presented in an official setting, for example, a watch, tie, shirt, etc.;
inexpensive articles presented by companies during promotional campaigns;
articles of a cost under a fixed amount.
The World Bank establishes a limit of $100
, and International Paper $25 as the maximum value of an
Should employees of firms and their family members not possess return gifts and souvenirs in the size of
compensation to actual and potential customers of the firm.
2. Close friendly or family relations with employees of goods or services supplying firms
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
World Bank Group. Living Our Values. Code of Professional Ethics, p.10
Ethical Behaviour and Personal Integrity Are The Core of Our Culture, International Paper Publication, p. 11
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.
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.
What principles guide relationships between managers and staff members?
What peculiarities of sexual harassment in Azerbaijan would you emphasize?
Employment and task assignment
What ethical rules shall be followed at employment?
What are the strong points of these methods