How can conflicts of interest arise in business?

Conflicts of interest in business arise primarily when personal interests interfere with responsibilities. This situation occurs when an individual's personal motivations or benefits could lead to biased decisions that do not align with the best interests of the organization. For instance, an employee might face a situation where they have a financial stake in a company that competes with their employer. In this case, the employee's decisions may be influenced by their personal financial interests rather than the duty they owe to their employer, creating a conflict of interest.

The essence of a conflict of interest lies in the potential for personal gain to compromise impartiality and professional responsibilities. Therefore, recognizing and managing these conflicts is crucial for maintaining integrity and ethical standards in any business operation.