Managing Client Conflicts - Assignment Example

Managing Client Conflicts Managing Client Conflicts Q1 The Situation in the Case Study The case elaborates the limitations that professionals have concerning their service delivery and their relationships with clients. As such, there is a dilemma associated with conflicts of clients for which the author categories into two. The two conflicts shape and define the types of relationships that exist between professional and their clients. For instance, they are responsible for client’s choice of experts, and the contrary (Nanda 2002, p. 3). The professionals have a hard time relating with the customers considering that some situations require them to stay loyal to some customers. The situations arise when professionals attempt to assume multiple roles, which involve different customers. They face the problem of deciding the type of information to give their clients because of the competitive nature of business environments. There are situations that require their loyalty while others demand confidentiality from the same professionals. Such circumstances imply that the professionals’ choice of clients will depend on the nature of the industry they deal in. For instance, competitive client interrelationships need strategic services from professionals, which imply that the conflict norms are narrow. In such situations, the professionals have a limitation on the type of services they will give to their customers. On the contrary, complementary clients result in a broad and lenient nature of conflict norms because they demand generic services from their professionals. Therefore, the situation in the case is a dilemma concerning what types of customers a professional should serve. A survey (Figure 1) conducted in the U.S., for instance, revealed a high number of claims in the risk management industry that involve credit-related claims against Directors and Officers (Horovitz 2010). Most of the cases involved breach of fiduciary liability by directors and officers. Figure 1 Q2 Issues at Stake from the Case Study There are two critical concerns dilemma of professional service delivery. The first one is confidentiality, which the case states that it has a strong claim on professionals. As such, the professionals have to assure their customers that they will not reveal critical information to other parties. For instance, professionals should not give information from one client to another in the event that the involved parties are competitors of each other. In such cases, most customers will prefer professionals who do not reveal their information to competitors (Nanda 2002, p. 3). However, there are situations when experts give best services to their clients because of their loyalty to them. A professional practicing confidentiality to one customer may end up revealing the information to another client on loyalty grounds. A situation like this results in the conflict of client fiduciary duty, which implies that some client conflict is responsible for the sizes of some industries. Industries with the largest choice of conflict norms have a significant pool of customers while those that have a narrow conflict of rules have fewer customers. As such, an expert practicing on loyalty grounds to one customer may end up losing confidentiality to another client. Such indicators mean that most experts would rather choose industries that allow them a reasonable level of flexibility concerning the types of services they should offer their customers (Nanda 2002, p. 4). Q3 Questions Concerning the Case The case is a demonstration of the dilemma related to how professionals should deal with their clients. It presents at least in each of the situations that the case outlines, there is an associated challenge that faces the professional. Therefore, what is the best alternative that professionals acting in the narrow conflict norm adapt to serve multiple customers? Should such experts give in to the pressure that their case reflects and restrict their service delivery to a limited section of potential customers (Greene, 2013). There are three major questions. The first question relates to where a professional defines responsibility to a client. In the Australian legal system, the relationship between solicitor and clients is recognized as that based on trust. In a fiduciary relationship, the client trusts the professional and places his or her confidence and good faith on the professional. The fiduciary relationship put, upon the professional, several legal duties and the actions must be in the client’s best interest. A professional, therefore, has a fiduciary duty to the client where he or she must observe the following. First, act honestly and in a manner that is fair and ensures the client’s utmost interest. The second is where the professional must act with skills and diligence in a manner that is reasonable with promptness and showing courtesy. Third, the professional should maintain the client’s confidential information. Fourth, is a case when the professional should effectively communicate with the clients. Five, where there is need to follow lawful instructions from the client. What are the key aspects of a fiduciary duty of the professional to a client? There are different aspects of fiduciary duty that professionals have to a client. First, is disclosure? The professional should disclose to the client information regarding the charges before start of the contract. The professional should send regular updates and bills to the client for services offered. Bills should set out the work performed and related charges. The second aspect is confidentiality. The professional must ensure that all information shared through conversations, correspondences and all forms of documentations remain confidential and only revealed with the consent of all parties, in limited situations. The third aspect is conflict of interest. The professional should not embrace his interest or that of an associate that conflict with that of the client. Fourth aspect relates to following instructions as provided by the client. All decisions by thee professional should be based on the client’s operations. The fifth factor relates to clear communication. The client should have regular updates of the progress well communicated, preferably through writing. The professional has an obligation to state to the client the most appropriate course that the project should adopt. When does a professional cease being a fiduciary? A professional ceases being a fiduciary upon a breach of understanding with the client. The second circumstance that would promote the breach of understanding is the misuse of position by the professional. The fiduciary duty also ceases upon non-competence and disclosure. Answering the question could provide a better understanding of the dilemma that the case outline. For this example, the answers to such questions lie in the research that uses the questions as the objective of their study. One such study relates the questions to a conflict of interest between the professionalism of any aspect with what the customers want. The study considers the answer in a complicated balance between the prevalent situations and the professional requirements. Even the proposal that study gives could still have some answered questions because it will involve conflicting interests. There is still no better way that experts will serve all their customers or better still, a cross-section of them without conflicting between confidentiality and loyalty. Q4: The problems that need solutions There is the need that researchers find workable solutions to how the client professional conflicts related to the conflict of duty could be solved. A petition is efficient in solving the case. In determining the breach of fiduciary duty, the court must ascertain key concepts of the case. First, the court must prove that in the actual circumstance, the client can reasonably prove that the professional should have acted in the relationship’s interest and provided in the key aspects of fiduciary law. The curt must ascertain breach of the professional’s fiduciary liabilities. Further, there is need for the court to ascertain loss incurred by the client because of claims of “knowing assistance” by the professional. That would involve an assessment of the profits or gains made by the principal due to the breach of fiduciary duty as claimed in the case. In essence, proving liability for breach of fiduciary duty demands the court to ascertain five key elements. First, it required proof of the existence of a fiduciary relationship. Second, it demands certainty that the professional (defendant) is liable for misconduct. Misconduct by the professional should include self-dealing of the fulfilment of personal interest. There must be proof of injury to the plaintiff (client). The court must prove that the conduct of the professional’s (defendant) caused direct damages to the client (plaintiff). If the court proves a breach of fiduciary duty, the plaintiff may receive compensation for damages, either actual or punitive. The review outlines validity of courts’ ruling in the cases concerning client conflict dilemma are important in ascertaining breach of fiduciary duty (Chelliah, 2010). The problem is because of the fact that the court is a representative of one of the players in the client professional setup. Are there chances that the courts could still have provided a ruling in their favor? As it stands, there is a need that a standard code of ethics will incorporate the aspects of confidentiality and loyalty to suit all practice. Such a move will enable all experts to be multi-discipline actors. It, therefore, implies that multi-discipline remains a matter limited to a few sections of one economy. Q 6: The Underlying Principles of an Investment Analyst An investment analyst acts in the informational industry, which means that they search for information on the entire market and transform the information for analysis by other players. The experience gained by practitioners from their research benefits many people who visit them for services concerning investment. Such events mean that practitioners of such kind act within a broader conflict norms than others (Clum, 2014). For this case, the information that they gain from the researches related to other firms could give them an opportunity to enhance their skills. The flexibility of their conflict norms also means that they act within a broad industry that has a number of firms that work independently. For this case, the services of the investment analyst benefit any interested parties because the information gained out of interacting with them is does not create unhealthy competition. An investment analyst produces reports as the one illustrated in diagram 3 below detailing the intended results. However, there is a need to consider that the same experts are faced with a vertical conflict as it concerns their delivery of services to their clients. The mentioned case applies to sell-sided investment observers because they observe the market trends, make recommendations, and submit them to other firms for improvement of their marketability. The professional ceases to act in their traditional informational role and serves as an advisor for improving their clients. For this case, the sell-sided investment analyst works in the informational role but the client requires them to give advisory services of concerning the queried services. The latter state constitutes vertical conflicts, which is a common problem with most informational professionals as explained by Zupek (2008). As such, the experts in this scenario act in accordance with a number of principles. The first is that they must ensure that they preserve the confidentiality of their client’s information (Olson & Riepe, 2009). They also ensure that they utilize their professional qualifications effectively as a part of their ethical requisitions. They also need to be reasonable and fair in their service delivery and prevent the disclosure of conflicts of interest. Q7: Criteria for Use in the Selection of an Option The criteria of the best alternatives for the problems in the case study will depend on the categorization of the problems such that they will reveal the conflict openly. For instance, the first category will relate to the situation where one party shall be acting for more than one other parties. In such a case, there is the hidden conflict related to the informational and advisory experts (Myatt, 2012; Pfeffer, 2014). This category of the situations should outline the rules of engagement between the clients and their professionals. In this case, there it is necessary that the group identify the personal interest of the concerned parties as well as their public duty. There is a consideration that the best practice for managing the case should that defines the conflicting duties of the affected groups. The criterion will also entail other types of conflicts such as professionals acting for one client against another one. Each of the mentioned problems is identifiable by use of a conflict checking system and determined based on intensity (Gerzon, 2014). In each of the described issues, the best approach entails an observation of the rules of professional conduct. A typical decision-making process is illustrated in diagram 4 below. Diagram 4 For this case, concerned stakeholders should consider that the best practice should involve confidentiality over loyalty. However, other fields of practice such as law require the practitioners to be firm on both aspects (Glen, 2002). For instance, they should be obliged to give full disclosure, proceed to act with undivided loyalty as well as maintain the issues of their clients in confidence. Should any situation arise, that may cause the affected parties to fail in their observation of their duty, which shall result in a breach of duty and subsequent conflict of management. Bibliography Chelliah, J. 2010, "The Psychodynamics of the Client-Consultant Relationship,” International Journal of Business and Information, vol. 5, no. 2, pp. 135-150. Clum, L. (2014, December 24). 6 Tips for Dealing with Client Conflict. Work Awesome. Retrieved April 15, 2015 from http://workawesome.com/goals/client-conflict/ Gerzon, M. (2014, June 26). To Resolve a Conflict, First Decide: Is It Hot or Cold? Harvard Business Review. Retrieved April 15, 2015 from https://hbr.org/2014/06/to-resolve-a-conflict-first-decide-is-it-hot-or-cold?cm_sp=Topics-_-Links-_-Read%20These%20First Glen, P. 2002, "Healing client relationships: Common pitfalls", Consulting to Management, vol. 13, no. 1, pp. 4-7. Greene, J. (2013, May 27). How To Resolve Conflict Like A Pro. Forbes. Retrieved April 15, 2015 from http://www.forbes.com/sites/chicceo/2013/05/27/how-to-resolve-conflict-like-a-pro/ Myatt, M. (2012, February 22). 5 Keys of Dealing with Workplace Conflict. Forbes. Retrieved April 15, 2015 from http://www.forbes.com/sites/mikemyatt/2012/02/22/5-keys-to-dealing-with-workplace-conflict/ Nanda, A. (2002). The essence of professionalism: Managing conflict of interest. Division of Research, Harvard Business School. Horovitz, B. (2010). Taking A Wide Angle View Of D&O Exposures. Insight Americans. Retrieved April 15, 2015 from http://xlgroup.com/insurance/insurance-resources/insurance-articles/taking-a-wide-angle-view-of-do-exposures Olson, B, & Riepe, M 2009, Improving the Adviser-Client Relationship, Part 1, Journal Of Financial Planning, 22, 12, pp. 28-37. Pfeffer, J. (2014, May 29). Win at Workplace Conflict. Harvard Business Review. Retrieved April 15, 2015 from https://hbr.org/2014/05/win-at-workplace-conflict/ PWC. (2008). A guide to directors’ duties and responsibilities for non-listed public companies and proprietary companies in Australia. Retrieved April 15, 2015 from http://etraining.communitydoor.org.au/pluginfile.php/608/course/section/95/GuideDirectors_Apr08.pdf Zupek, R. (2008, January 8). Six tips to managing workplace conflict. CNN. Retrieved April 15, 2015 from http://www.cnn.com/2008/LIVING/worklife/01/02/cb.work.conflict/ Read More