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Conflict of Interest: What It Is, Its Causes and Consequences

Yanli Zhang, Jeffrey Hsu, Ruben Xing and Wencang Zhou
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Yanli Zhang: Center for Enterprise Innovation and Development, Soochow University, China & Management Department, Montclair State University, Upper Montclair, NJ, USA
Jeffrey Hsu: Department of Information Systems and Decision Sciences, Fairleigh Dickinson University, Madison, NJ, USA
Ruben Xing: Information and Operations Department, Montclair State University, Upper Montclair, NJ, USA
Wencang Zhou: Management Department, Montclair State University, Upper Montclair, NJ, USA

International Journal of Knowledge-Based Organizations (IJKBO), 2015, vol. 5, issue 2, 1-18

Abstract: Given the persistent prevalence of conflict of interest in our society, the authors ask the question: What exactly is conflict of interest? Based on an extensive analysis of conflict of interest cases in the popular press, the authors come up with a typology of conflict of interest: personal conflict of interest versus organizational conflict of interest. Furthermore, the authors develop a model of the causes and reactions to conflict of interest. The authors identify four antecedents to conflict of interest which include delegation of authority, guanxi and guanxi practice, law and ethics code, and moral & values. At the same time, the authors find that the characteristics of conflict of interest, which include network strength, exchange value, and transparency will influence people's reactions to the conflict of interest and perception of impaired judgment and decision making.

Date: 2015
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