Securities firms usually help organizational investors to produce better plans for money spread. It takes a lot of time to calculate possible changes which might happen later and what potential risks are caused by investment plans (Han et al., 2021). Consequently, these firms often benefit small and medium companies, and all departments can successfully integrate with this external supporter. Analysts in the financial sector also take into consideration financial positions and changes that may appear. To avoid conflict between them and securities firms, managers should divide responsibilities and make sure that these two branches have different tasks.
Due to the multitasking of managers and owners of any organization, the conflict of interest may increase. Conflict might arise when analysts and external helpers like securities firms are not given specific instructions that separate them from the same work. This problem usually occurs when managers receive a different solution to one issue from various departments. Cooperation can become impossible, and there might arise a conflict of interest and a future inability to solve the company’s financial problem (Finberg, 2017). These conflicts might cause issues in other business sectors, so it is important for chefs to introduce regulations that will help solve these problems in a short period of time.
Managers can separate both departments to avoid unpredictable conflicts and give them different work. Nevertheless, they could ask securities firms to work with the company’s financial analysts to make the final result more efficient and successful (Fasaei et al., 2018). Both plans may be beneficial and cause a problem, and it is crucial to understand potential threats while combining these types of financial branches. When owners of businesses separate analysts and securities firms and give them different tasks, more time could be spent finding the right solutions to diverse problems as fewer people are integrated with the work. This method could decrease the risk of interest conflict as there is no need to integrate with an external financial organization.
Some managers may consider not separating securities firms and analysts and increasing the possibility of a better financial outcome. Even though it is risky to mix internal and external departments and give them one task that should be resolved, the final result might positively influence the performance of the business (Bradshaw et al., 2018). The chance of failure increases, but when the work is well-organized, the consequence may bring a high percentage of benefit. Managers do not have to mix the departments in the middle of a problem solution as both might already have different strategies, and it may become complicated to start brainstorming from the bottom point. Consequently, if managers decide not to separate securities firms and business analysts, they have to instruct them at the same time and make sure that they will be able to cooperate. I believe that separating may not allow the performance of the company to increase at a high rate. Even though mixing two spheres increases the financial risk, the negative outcome might not happen by following specific organizational rules.
In conclusion, conflict of interest should be strictly monitored by managers as this aspect might ruin the financial part of an organization. By following specific instructions, the risk of mixing external and internal departments might be decreased, and the general performance of can be increased. Before making changes in the financial sphere, owners and managers can discuss possible cooperation with both spheres and determine whether the teamwork plan can bring effective changes.
References
Bradshaw, M. T., Ertimur, Y. and O’Brien, P. (2018). Financial analysts and their contribution to well-functioning capital markets.Foundations and Trends in Accounting, 11(3), 119-191.
Fasaei, H., Tempelaar, M. P., and Jansen, J. J. P. (2018). Firm reputation and investment decisions: The contingency role of securities analysts’ recommendations.Long Range Planning, 51(5), 680-692.
Fineberg, H. V. (2017). Conflict of interest. JAMA, 317(17), 1717-1718.
Han, H., Tang, J. J. (2021). Goodwill Impairment, securities analysts, and information transparency.European Accounting Review, 30(4), 767-799.