Discuss this statement in detail within the context of the Malaysian environment.

‘Conflicts of professional interest frequently arises in the working environment of an

engineer’. Discuss the statement and propose the appropriate solutions for overcoming

the problems.

Executive summary

Conflicts of professional interest frequently arises in the work environment of an

engineer is one of the situation happened in Malaysian environment. There are a few factors

who cause the situation happened. The main parties that will involve in the conflict of interest

are the developers, contractors and consultant engineers. In order to overcome the problems,

the conflict have to be figured out and overcome the problems with optimal solution. The

conflict should be decrease as to help the company growth better.

seems to be very synonym with construction projects and giving the impressions of

problems includes in increasing project cost, project delays, reduce productivity, lost of profit

or damage in business relationships. The main goal of this paper is to overview the factors of

conflict in construction industry. The study highlighted three (3) types of conflict factors which

are conflict factors due to behavioral problems, contractual problems and technical problems.

conflicts among the parties. It seems that conflict and disputes are inevitable to the

construction industry especially when most of construction projects are facing with so many

uncertainties. However, Factors of conflict due to behavioural factors includes reluctant to

check for constructability, clarity and completeness and poor communication among project

team. Meanwhile the factors of conflict which is due to contractual problems are such as late

giving of possession, delay interim payment from client and unclear of contractual terms.

Whereas, contractor fails to proceed in a competent manner and late instructions from architect

1
or engineer are the factors of conflict which arise due to technical problems. This paper was

hoped to be guidance for conflict management in future construction projects.

Conflicts of interest arise in every type of business and we all deal with them every day.

For example, when you ask a restaurant owner to recommend something from the menu, you

know you are giving him a chance to push the slow-selling highest-priced dish to benefit the

restaurant at your expense. If the owner does this, you probably will dine elsewhere in the

future. Knowing this, a smart owner will not steer you wrong. Of course, you can avoid the

conflict altogether by not asking for the owner’s advice. The drawback is that you will miss

the advice of the person who has the most information about the restaurant.

Sometimes, people cannot even agree on the definition of a conflict of interest. Most

definitions focus on at least two ingredients: 1.) a firm’s actual or potential financial interest in

the outcome; and 2.) the actual or potential effect on the ability of that person or firm to render

impartial advice. For example, those smartees at Harvard University define conflicts of interest

affecting procurement by the University as follows: “[A]n individual is considered to have a

conflict of interest when the individual, or any of his Family or Associates (i) has an existing

or potential financial or other interest which impairs or might appear to impair the individual’s

independence of judgment in the discharge of responsibilities to the University, or (ii) may

receive a material, financial or other benefit from knowledge of information confidential to the

University.” (On the World Wide Web at

The Federal Government has a similar definition, but it also wants to avoid giving one

firm an undue competitive advantage over competing firms. Federal Acquisition Regulation

(“FAR”) 9.501, concerning conflicts affecting an organization, has the following definition:

“Organizational conflict of interest” means that because of other activities or relationships with

other persons, a person is unable or potentially unable to render impartial assistance or advice

2
to the Government, or the person’s objectivity in performing the contract work is or might be

otherwise impaired, or a person has an unfair competitive advantage.” (See

As these examples show, most of us recognize that a financial interest in the outcome

can affect the judgment of a person or firm, and it is well to have a policy to deal with this type

of situation.

Introduction
Conflict always happen on our surrounding, especially in the world which is full of

sophistication and complexity. We face many kinds of conflicts in daily life which involves

our family, friends and colleagues in learning or working environment or even the boss.

Everyone has his/her opinion and interest on a certain issue or thing. When one is disagree with

another person’s point of view and interest, conflict will occur. In Malaysia’s working

environment, to work as an engineer in the related field, these conflicts can’t be avoided.

However, the conflict of professional interest is a current issue in the career of an engineer. If

this type of working environment does not improve or changed, it will bring negative effects

to the employer, employees who are working in the company and also the company’s own

reputation.

A true profession is an occupation which requires skills and knowledge in a specified

field that was for the benefit of the society. A professional able to demonstrate their knowledge

and skills which they done by training and it was used to provide service which is unique and

it was used to serve the community. A professional was a person who can distinguish others

from all the occupational groups by showing their expertise in the particular area of which

utilizes the knowledge and skill which he already had.

3
 The knowledge and skills which an engineer has was a result of training, researching

and experience. Through these processes, an engineer was able to develop more critical

knowledge and professional ideas. What they learnt was tested, examined and evaluated before

they are qualified as a professional engineer. Through disciplined academic training and

experience, they will obtain a certain level of knowledge in their area of practice. It required

certain level of standards, also with rules and regulations to ensure that the person can be called

as a professional engineer.

In most countries there are increasing expectations from ordinary citizens, business

leaders and civil society that governments should deliver higher standards of integrity in

the civil service, public institutions, public services, government-controlled corporations,

and government itself. In this context, conflict of interest in its various forms should

become a significant consideration in the day to day work of those who occupy any

position of trust. This Toolkit is intended to help to make those expectations a practical

reality.

Conflicts of interest in the public sector are particularly important because, if they are not

recognised and controlled appropriately, they can undermine the fundamental integrity of

officials, decisions, agencies, and governments. “Integrity” is used in the public sector to

refer to the proper use of funds, resources, assets, and powers, for the official purposes

for which they are intended to be used. In this sense the opposite of “integrity” is

“corruption”, or “abuse”.

Conflict of interest is both a straightforward and a complex matter: in principle easy to

define – in the public sector a conflict of interest arises “when a public official has private-

capacity interests which could improperly influence the performance of their official duties

and responsibilities.”* Establishing effective policy frameworks to control conflicts can be a

complex task. To resolve a specific conflict, it is necessary to establish relevant facts, apply

4
the relevant law and policy, and distinguish between “actual”, “apparent”, “real”, and

“potential” conflict situations. This requires technical skill and an understanding of the many

issues which are usually involved

A “conflict of interest” therefore involves a conflict between officials’ personal

interests (what they could gain, not necessarily financially) and their duty as a civil

servant and is to be avoided as far as is reasonably possible. In general, the appearance

of a conflict of interest is also to be avoided, to minimise the risk to the organisation’s

reputation (and officials’ personal reputation) for integrity. As perceived conflicts of

interest could be similarly harmful to the trust in public decision making, managers should

also consider perception when they decide on specific cases.

There are costs attached to such avoidance, and costs in preventing, assessing and

managing such risks. There are also costs involved in any actual harm that does in fact

result from a particular conflict situation. As in most areas of public management, a

realistic, contextually-appropriate and proportional response to each case is required.

New forms of partnership between government and the private sector and increasing

engagement by governments with civil society, mean that conflicts of interest take new

forms, presenting new challenges to policymakers and public managers. Conflict-of-

interest situations cannot be avoided by simply prohibiting all private-capacity interests

on the part of public officials: instead, public officials must take personal responsibility

for identifying and resolving problem situations, and public institutions must provide

realistic policy frameworks, set enforceable compliance standards, and establish effective

management systems. They must also provide training, and ensure that officials actually

comply with the letter and the spirit of such standards.

5
 Managing conflicts of interest requires integrity and trust in your company’s personnel

and policy. While many types of policies are possible, a good policy should at least include

full disclosure and efforts to neutralize the conflict.

The mere existence of a potential conflict of interest should not automatically exclude a

person or firm from participating in a particular business opportunity. Competition and quality

might be impaired more by exclusion of a firm than by participation despite a conflict of

interest.

Problem Statement

As mentioned in the earlier section, conflict occurs as a result of different opinions and

interests in one from that of others. Engineers involved themselves in the industry which is a

wide, fast-growing and competitive profession. The main parties that will involve in the

conflict of interest are the developers, contractors and consultant engineers.

Brown et al. [12] highligted that conflict is doubt or questioning, opposition,

incompatible behavior, controversy or antagonistic interaction and disputes is one of the range

of events considered as conflict. According to Kumaraswamy & Yogeswaran [3], ―a dispute

can be said to exist when a claim or assertion made is made by one party is rejected by the

other party and that rejection is not accepted.‖ This shows that disputes is more likely occur

when the conflicting parties shows an action or arguments to a controversy. Referring to

Vorster [13], ―a dispute is defined as an argument about an issue concerning project

operations, usually resulting from a debate over differences in two or more parties‘

6
understanding of situation.‖ This statement is supported by another statement by Deutsch [14]

that defines conflict as ―incompatible activities; conflict occurs when the behavior of one

person is interfering or obstructing the actions of another.‖ There are perhaps as many

definitions of conflict as there are occasions for its occurrence. According to Thomas [15] there

are three themes among the definitions of conflict. The first, is that whether conflict exists or

not is a perception issue. The perceived difference may not be real but conversely if the

difference is real but not perceived there is no conflict. The second common theme is that there

is interdependence among parties (i.e. each has the potential to interfere with the other). Third,

there are issues of blockage, opposition, and scarcity. Resources, for example, money, power

and prestige, are limited. Their scarcity creates blocking behavior. When one party blocks the

means to a goal or interest of another, a state of conflict exists [16].

These numerous definitions show that scholars are looking at conflict from different

angles but are there a difference between conflict and dispute and if so, should we concern

ourselves with the difference? Some authors do not differentiate as Moore [17] manages to mix

the two terms in the first paragraph of his Chapter 1. However, most of previous research

defines conflict and disputes shares the same definition that is generally involves disagreement

regarding interests or ideas and that was adopted for this research. The important issue is both

of the terms has ―historically been viewed as undesirable, something to be avoided.‖ [18].

Objectives

 To figure out the conflict happen among the engineers with professional.

 To overcome the conflict between professional and the engineers.

Causes of Conflict interest

In order to prevent disputes, the first important action is to trace the origins of problems

[19]. Many researchers have studied on conflict and disputes that addresses huge numbers of

7
variables regarding the sources or causes of it in the construction industry. Hohns [20] believes

that construction disputes have their instinct nature and characteristics, and thus the sources of

disputes will vary from one project to another. In his study, five primary sources of construction

disputes were listed that includes existence of errors, defects or omissions in the contract

documents, failure of someone to count the cost of an undertaking at the beginning, changed

condition, consumer reaction and people involved. Williamson [21] identified three large root

causes of conflicts that are behavioral problems, contractual problems and technical problems

due to uncertainty and low experience. Later, a survey by Semple et al. [22] reported that the

most common causes of claims that normally lead to disputes are scope changes, weather, and

restricted site access. Pelled [23] reported several studies have shown that multicultural teams

are inclined to generate more conflict. Diekmann and Girard [24] later identified the factors

leading to contract disputes. They identified the effect of different project characteristics, which

included people, process and project aspects on the occurrence of contract disputes. The

findings of this work was based on logic regression analysis of data on the frequency and

severity of disputes on 159 construction projects. The results concluded that all three issues

played a role in influencing the likelihood of contract disputes, but the ‗people‘ issue held the

key to avoiding contract disputes [25]

Kumaraswamy [26] has summarized 20 common causes of construction disputes,

including speed of construction, cost and quality control, technological advances, stringent

building regulations and economic difficulties that becomes basics for many studies later

regarding conflict and disputes in construction industry. Fenn et al. [27] identified causes of

construction disputes caused by clients includes failure to respond in timely manner, poor

communications amongst members of the team, inadequate tracing mechanisms for request of

8
information, deficient management, supervision and coordination efforts on the part of the

project, lowest price mentality in engagement of contractors and designers, the absence of team

spirit among the participants, reluctant to check for constructability, clarity and completeness,

failure to appoint a project manager and also discrepancies or ambiguities in contract

documents. Kumaraswamy & Yogeswaran [3] indicated in their study that the sources of

construction disputes are mainly related to contractual matters, including variation, extension

of time, payment, quality of technical specifications, availability of information, administration

and management, unrealistic client expectation and determination.

Shin [11] reported that disputes can be generated by the people involves that is by the

stakeholders including architects, engineers, contractors and other project related

professionals. Thompson et. al. [28] mentioned, ―disputes arising primarily due to lack of

communication, distrust, misinterpretations of contracts, uncertainties of role and

responsibilities, and an ‗‗us versus them‘‘ posture based on an imbalance in risk allocations.‖

Hall [29] also identified causes of construction disputes caused by consultants that

includes failure to understand its responsibilities under the design team contract, over design

and underestimating the costs involved, late information delivery and cumbersome approach

to request for information‘s, design and specification oversights and errors or omissions

resulting from uncoordinated civil, structural, architectural, mechanical and electrical designs

and incompleteness of drawing and specifications.

Study by Cheung et al. [30] explains dispute in a construction project can be identified

from the causes of dispute and the characteristics of the project. They identified six common

causes of disputes that includes budget overrun, outstanding payment, different percentage of

claim submission and certification, number of days behind programmed, liquidated damages

and percentage change from original design. Carmicheal [31] identified causes of construction

disputes caused by contractors which include inadequate contractor‘s management,

9
supervision and coordination, delay or suspension of works, failure to plan and execute the

changes of works, failure to understand and correctly bid or price the works, lack of

understanding and agreement in contract procurement, reluctance to seek clarification and

inadequate critical path method (CPM) scheduling and update requirements.

According to Chua & Song [32] project schedules developed by various project players

often reveal conflicts when they are merged together. This is due to the main challenge of

communication among the constructors lies in the implicit interfacial dependencies between

the project activities. Another study by Kathleen [4] describes ―destructive conflicts develop

as a result of limited resources, e.g. not enough time, money, labour, materials and or

equipment.‖

In a larger scope of study in Sino-Foreign Joint Venture construction projects, Edwin

& Henry, [33] identified 20 sources of disputes includes payment, variation, extension of time,

quality of work, unfamiliar with local condition, project scope definition, risk allocation,

difference in ways of doing things, technical specification, poor communication,

administration/management, unrealistic client expectation, availability of information,

adversarial approach in handling disputes, lack of knowledge of local legal system, conflict of

laws, jurisdictional problems, unclear contractual terms, lack of team spirit and previous

working relationships. A study by Cheung et al., [34] describes that the inclusion of special

conditions in contract, changes in construction plans and specifications, and the resulting

contradictory and error of information in the mass of documents can all contribute to

construction disputes.

Cheung & Yiu [35] conducted a study on mediation in resolving disputes identified

valuable variables on causes of disputes. They divided disputes sources in two different

category that is construction related and human behavior related. Sources of conflict related to

construction factors are acceleration cost, the assessment of liquidated and ascertained damages

10
against main contractor, clients fail to pay for variation claims, late giving of possession from

client, clients take over the site and deny access to main contractor, errors substantial changes

in bills of quantities, argument on the prolongation costs, architect/engineer dissatisfies the

work progress of main contractor, argument on the measurement and valuation of the

contracted work, late instructions from the architect and engineer, main contractor fails to

proceed in a competent manner, delay interim payment from client and late release of retention

monies to main contractor. It also includes argument on the time extension costs claimed by

sub-contractor, changes of scope due to extra work, inadequate site and/or site investigation

report, delay works due to utility services organization, non-payment to sub-contractor by main

contractor, main contractor ceases work on site, argument on the time extension costs claimed

by main contractor, main contractor denies access of the site for the sub-contactor,

subcontractor works delay due to main contractor, consequences of opening for inspection and

sub-contractor ceases work on site

Cheung & Yiu [35] also identified sources of conflict related to human behavior that

includes negotiators lacked experience, too many issues brought to table, both parties not

prepared for negotiations, both parties want to control over proceedings, both parties are not

interested to settle, parties have unrealistic expectations, no leadership within the project teams,

no trust between the parties and felt no trust on mediato

Sambasivan & Soon, [36] stated in their study that factors such as delay in the payments

for completed work, frequent owner interference, changing requirements, lack of

communication between the various parties, problems with neighbors, and unforeseen site

conditions could rise to disputes between the various parties involves

The causes of conflict as reported in the previous studies describe different variables

reflecting to their study. Even though most of the study shares the same variables, the causes

still seem too large to be understandable or to be focus on. The categorization or root of causes

11
identified by Williamson [21] will be based on for this study. Conflict causes identified by the

researchers are summarized into three (3) categories that are causes due to behavioral,

contractual and technical problems

Conflict causes due to behavioral problems

Behavioral problems include human interaction, personality, cultures and professional

background among project team. Other issues in human behaviour such as individual‘s

ambition, frustration, dissatisfaction, desire for growth, communication and level of power,

fraud and faith are also causes of disputes [13] ―It was noted earlier that construction is not a

science, it is an art. Construction is really people, and the successful contract administrator, or

disputant to a contract interpretation or unfortunate occurrence on a project, is well served to

know a little about people involved.‖ [20]. ―The herding instinct is very strong in the

industry‘s people. All seek and need that sense of acceptance or approval. They have a need to

emulate the leaders or their concept of the leaders of the profession. Words like belonging,

imitation, loyalty, recognition, superiority, status are descriptive of the human elements of

gregariousness. Try to make the other party feel as if he belongs to the pack. Find out the group

the other party feels important. Show him how resolution of the dispute will help him achieve

or strengthen his membership in the group‖ [31].

―It is one thing to loose money in a contract problem, but it is a lot to lose face. All

people have an idea of themselves which they feel must be defined‖ [1]. Disputes can often be

more easily resolved when all the egos involved can survive. Not only are people typically

quickly to protect their self-image, they all want to extend the position they currently hold or

claim is theirs. Thus any massage couched in terms of few acquisition, promotion, saving

money, or being protected will be heard and every often receive action. Everyone wants space,

a better future, and the chance to increase the recognition of one‘s selfworth. Appeals to

ambitions, goal realization, and increase of power help resolve disputes

12
 According to Camicheal [31] construction disputes and confrontations arise because

the people involved have needs. From the contractor‘s side the needs are usually money or

profit related. The designer has the ideas, his building or design which might be his monument

to himself, his reputation, his artistic temperament, his money, his insurance premium, and

similar needs. The owners have needs as well; political careers, corporate careers, the need to

have the space for a certain day. When something unanticipated or not properly recognized

interferes with the fulfillment process, goals and security are jeopardized, communications

become strained, and strains seem always to be followed by demands, refusals, other more

intense strains,hard, then harder positions, and money losses. These problems arise when there

is lack of team spirit and poor communication among the project teams. People are a prime

cause of construction disputes, and the only solution to these disputes as well. The rise of

society‘s present attitudes that everyone has rights has led too much of the activity in disputes.

Conflict causes due to contractual problems

The participation of different parties in a project is governed by a contract which

defines the exchange of construction materials and services for money. ‖A contract is a promise

or the set of promises for the breach of which the law give a remedy or the performance of

which the law in some way recognizes as a duty,‖ [37]. Contractual disputes include definition,

interpretation and clarification of the contract. Contractual issues cause a significant portion of

disputes in many projects [24]. Kumaraswamy & Yogeswaran [3] indicated in their study that

the sources of construction disputes are mainly related to contractual matters, including

variation, extension of time, payment, quality of technical specifications, availability of

information, administration and management, unrealistic client expectation and determination.

In project operation, standard contract documents are guided by industry organization,

codes and regulations. This concept of a standard contract to a certain degree guides operations

toward standard practices. Therefore standard contract provide enough common ground for

13
contractual definitions, clarifications in construction operations and specific project

requirements.―Owners, contractors, designers, and every one involved in construction readily

recognize and are quick to admit publicly the very obvious fact that a perfect set of contract

documents simply does not exist.‖ [20]. All drawings in the contract documents somewhere

have mechanical drafting errors or lack a needed dimension or detail. Many have errors which

stem from the human nature of the designer and draftsman. Not only are human errors, but

changes always occurring as projects undergo the design and construction process. There are

changes in space usage to accommodate revised owners needs, something unforeseen occurs,

the documents and work scopes must be adjusted. The more complex the project, the more

ramifications a change has. The shorter the period allowed for design, the more addenda‘s that

are required, and the more the opportunity for errors. No one man may know or remember

every place a certain detail was shown. ―The larger the project, the more the people, the

drawings, the thoughts, and the ideas consequently, the larger the project the more errors there

are‖ [29]. Contract documents are one major origin of disputes. Document errors become the

fault of the owner when they cost the contractor un-bid or unforeseeable amount of money

Documents errors become the fault of the designer when the judgment of its peers and

the custom of the industry the errors are gross and inexcusable. Document errors become

liabilities when someone who has a right to rely on the professional is severely hurt or damaged.

Punitive damages are staring to be considered as collectible against a professional when the

hearer of the facts finds that the professional‘s refusal to come to grips with its duties are

offensive to any reasonable standards of behavior.

The other contractual cause of conflicts is plan or drawings. ―A major source of

disputes in the design deficiencies is that categorized as defective plans‖ [38]. Most people

involved with plans have a working idea of the definition of this phrase, but in reality no

standard exists locally or nationally that precisely describes how to measure the plans for

14
defects.

Everyone who has worked with plans know that no set of drawings is complete or

without error. Somewhere dimensions are missing, wrong scales, a detail is missing, elevations

or grades are in error and many others. Not only are these types of errors common, but all who

work with plans know that drawings can always be refined and upgraded. Plans can always be

made better and can be improved but conflict will be always between it. Thus all plans are to

some extent defective and everyone involved in building uses defective plans every day. The

question in plan deficiency disputes is when the plans become defective to the point at which

undue costs are generated from their use. The usual legal definition is that plans are to be

prepared with the normal standard of care found in the profession, but no precise standard exist.

The designer has the advantage of its subjective knowledge of the intent of the plans. In some

cases pressures from the client will be exerted for degree of performance in excess of the

objective intent of the plans. This, plus poorly drawn plans, poorly drawn details, poorly

prepared notes on drawings, and poor specifications may reach a point where in the opinion of

one‘s peers, a level of acceptable performance has not been achieved. In the case of errors of

omission from a set of plans, the decision of adequacy on the part of the professional is much

easier to make than those which bear on methods or performance levels to be met upon

completion. The solution generally comes from the people genuinely willing to confront such

situations daily and work out the answer. This nice sounding method, how ever, is a hope for

method of solution at best. It does not work all the time and is completed by the lack of practice

measurement. The liability, however, can be far in excess of the omission or error. The ancillary

costs of a construction problem almost always exceed the direct costs. The owner and the

contractor have the right to expect the designer to produce a set of drawing plans which will

allow the project to be built. The law says the owner warrants to its contractor that the plans, if

followed, will produce the desire results and the project is constructible. Thus if the error by

15
the designer prevents the contractor from reaching its ends, the question of ability and

assessment of consequential costs exists

Conflict causes due to technical problems

Technical disputes due to uncertainty are considered as the most common issues in

project operations. According to Galbraith [39], uncertainty is the difference between the

amount of information required to do the task and the amount of information already processed

by the organization. The amount of information needed depends on the task complexity that is

the number of different factors that have to be coordinated or performance requirements such

as time or budget constraints. ―The amount of information processed depends on the

effectiveness of planning that is the collection and interpretation of information before the

task,‖ [19]. The uncertainty may lead to unrealistic client expectation such as unrealistic

contract duration, late instructions or information from architect or engineer, overdesign,

inadequate site or soil investigation report, error and incomplete technical specifications and

many others

Technical disputes also basically include engineering clarification which is a part of

engineering decision making processes. For example, request for information (RFI) is

considered an effective vehicle to clarify differences in understanding during project

operations. By utilizing those RFI, most unclarified issues are resolved on site before they

develop as a technical dispute and solve the problem of inadequate tracing mechanisms for

request of information. These disputes can be solved by project personnel with the appropriate

expertise. The engineering decision making process is fairly straightforward and reasonably

justifiable for each participant. If technical disputes are unresolved, there are ways of resolving

those disputes in project management unlike the resolution of contractual disputes during

project operations. The design deficiency which leads to a major dispute is generally beyond

an error of omission. To be significant the design error usually must alter the means, methods,

16
environment, duration, or the conditions of the construction process. Any number of factors

can influence this. The most common place in which design errors are made are in the

foundations, in the construction of the frame and the enclosure, in the utilization of spaces such

as method and materials and the required end result are specified, in project duration, and in

connection with related performance by others on which the project in question must at some

point rely

―Dispute continually arises because someone failed to count the cost at the beginning

when the cost should have been defined‖ [40]. Few contractors bring claim on projects which

come in near or under the construction budgets. Few owners seek liquidated damages when

projects are done on time or close to it. If designers are waterproof and the products the designer

specified fulfill the sales representative‘s claims, disputes are few and far between. Contrary

to the opinion of most owners, few contractors are deliberately claim‘s conscious. Most

supervisory projects personnel who work for the parties on the project have little real

knowledge of disputes or what is involved in litigation and arbitration, most of those involved

in getting a job done have solved complex problems on a daily basis of face to face

confrontation for such a long period of time that they come to believe they know it all. Thus

they prefer to argue among themselves and write what they believe are clever letters to establish

a record, and most distribute and resent the lawyers. Contractors who have made money on a

job usually do not invent claims or pursue spurious claims. Most often, a contractor who is

clearly entitled to valid contract adjustment via a claim will ignore the situation if the job has

come out well enough to live with.

Contractors like to get the job done and get over with. They fancy themselves builders;

claims take long to hold their interest. According to Essex [41] ―Disputes arise when the job

does not come out well, and too often the reason for this is the failure initially to figure the cost

accurately‖. The failure to count the cost initially is not confined to just the contractor. It applies

17
to the owner who set out unrealistically to build a building, as well as the designer who sets

out the design it for less than it will really cost either in design or construction. In construction,

major dollars and work scopes are calculated and committed in short periods of time. It is

common that someone fails to count something, and end up with a price that is too low. What

is worse is that most of those in the industry simply do not have the money to pay for their

errors. The one with the best intentions can not pay for his error. Ironically, too, it would seem

to some observers that those with the money to pay for their errors lack the degree of intention

needed to dig deep enough to square the account totally

The hardest part is that the dollar have to be collected after all the delays and difficulties

involved in retain age, back charges, punch lists, and the like are resolved. Thus, to the

contractor boxed in with retain-age and other cash flow problems there is no room to absorb

cost overruns. ―Construction pricing methods frequently are not to take into account the

erection process that will be ultimately required in sufficient detail‖ [42]. The modern designer

does not want to tell how a job should be done or prescribe or reveal any sequential restrictions

not strength related. Thus million of funds of work are priced under severe time pressure using

established unit price calculated from the estimators experience and which to some extent many

have been proven in ongoing or recent projects. The failure of a contractor to understand and /

or correctly bid or price the work initially is a major reason for disputes. It is compounded by

the ever present confident overbearing optimism inherent in all contractors that they somehow

are charismatic and can overcome the dilemma of an obvious bid.

18
Discussion
A construction project needs a quite big amount of funds. A construction developer

mostly was an organization involved in the act of acquiring, buying goods, services which

works for a land and also the construction activity of the land. There are also wealthy individual

developers which can build construction project by having considerable amount of funds, but

it is more common for a group containing all wealthy individuals which forms a development

company to separate the lost and risk of a construction project. They are usually considered as

business men that do investment in the property to build building to gain more profit. As an

engineer, it is important to think what others think. The developer side will only consider about

the cost and profit issue. An engineer should be reporting about the amount and cost of the

material used in the construction project. Besides that, any raise of price of material well also

affect the distribution of developer’s funds to each sectors regarding the construction project.

The next party would also have conflict of interest with the engineers was the contractors.

Contractors will also have concerns on the cost of the project but it is not the main issue for

him. The main task for him was to ensure the progress of building the project within the

timeframe and will be completed at the expected date. It is important that engineers let the

contractors know how to arrange the human resources available at the construction site.

Contractor also would needed to be suggested to follow the schedule for the construction

project as any delay in time will cause a lost in the construction cost.

Another side which has the conflict of interest was the consultant engineers. Consultant

engineer’s job was to ensure the construction were carried out in relevant and was following

the engineering codes and complying with international best practices. The main responsible

for the consultant engineers was to keep an eye on the quality of working activities in the

construction site. It is important that the safety measurements of a construction site are

19
following the protocols set by the local government. Workers or anyone authorized to enter the

construction site must wear safety helmets and gloves as prevention to any incident that may

happen when they are in the construction site. A first aid emergency center should be at standby

condition with simple medical assistance and staffs on site. If any accident occurs, the casualty

was able to get treated at instant.

One of the types of conflict in the working environment was conflicting client interests.

The classic case involving conflicting client interests occurs when a forest professional is

required to serve a client whose interests directly clash with those of another current client.

Obviously, a forester representing a landowner in a timber trespass case cannot also work for

the logger who allegedly committed the trespass, but many more subtle situations can also

present conflicts.

Another type of conflict which will be occur was financial conflicts. Financial conflicts

of interest are not always as clear-cut as one might assume. For example, when a forester who

owns a partial interest in a wood-using manufacturing plant sells wood on behalf of a forest

landowner, the forester has an obligation to make the landowner aware of this other business

interest.

The solution was first, the engineer must recognize, before accepting an assignment

from the second party, that there is a potential conflict of interest. A prudent engineer will

explain to the municipality’s representative that a report was prepared for one of the land

developers. The municipality may well deem this to be a conflict and select another engineer

for the assignment, thereby ending the potential conflict. Alternatively, the municipality could

decide that there is no conflict and be willing to continue with the engineer. However, this does

20
not resolve the engineer’s potential conflict, because the developer, who is the first client, is

not party to this decision. The engineer should advise the municipality that the assignment will

be accepted only if the developer agrees in writing that there is no conflict. Once that written

agreement is obtained, the second assignment can be accepted. If no waiver is provided, the

municipality may agree to retain the professional engineer generally but obtain a different one

for this specific land owner.

Solution of to this issue was first to create mutual respect. Building trust between the

engineers is key in this case. We should know that everyone who works in the company has

his/her own vision and commands on the company in terms of the company’s policy, the

organization of the company and the company’s future prospects. We also should understand

that engineers might perceive a conflict of interest, and that the perception would damage

mutual understanding and credibility. The lack of trust by engineers might be extended to the

entire management of the company. The loss to the company might be substantial, but we need

to put the interests of the company’s employer and its employees before their personal interests.

We should able to understand the concerns of the engineers to the company and try to

acknowledge and respect the suggestion given by them. Avoiding the conflict would guarantee

continued mutual respect between the engineers.

Establishing common goals and objectives of the company are vital. The common goal

can unite all the staffs of the company which allows them to fight together to achieve the goals

set by the company. The objective of a company is to establish a foundation or the base for the

company. Shared objectives can help engineers to be motivated in their work and became more

innovative to produce better and useful solutions which make sure that they can reach the

21
objectives. If the engineers have positive relationships and work together as a strong team, it

will reduce the conflict of professional interest as they are moving in the same direction for

sake of the company. The company was able to obtain more benefit and profit. More than that,

the company was able to improve its performance and will be having a better future.

In a company, effective communication has a very important role to avoid conflict of

interest. It is nice to see engineers having meeting each week discussing about the issue of the

company. However, if the outcome of the meeting was still unable to solve the problem, this

was considered an ineffective communication. Another example was only one of the sides was

giving opinion and suggestions but does not receive any feedback from others. It was known

as a one way communication, which was also ineffective. The strategy of having an effective

communication was information should always be clear and easy to understand for everyone

involved. It may have different communications plans for different sides in a meeting such as

the administration board, the engineers and the technicians. Just go straight to the point, expect

what information they want to hear and present to them. A two-way communication should be

build up. Both sides listen, discuss and debate the opinions and suggestion given and came out

with a best solution as the outcome of the meeting between the engineers.

To decrease the gap of conflict of interest between two parties, each person needs to be

considerate. It should be a good practice if one was able to put himself/herself in their shoes.

As an engineer, it was good to provide your own ideas and opinions. But, what is more

important was to consider what they will feel and think if they accept the opinion and ideas

given by your side. As an example, if one of the engineers proposed the idea of a new product,

there will be concerns on the design, cost, building material, target customers, and

22
functionality. Therefore, before proposing an idea of your own, try also to consider the

problems and difficulties which will be faced by the other engineers or departments. However,

it was impossible to take consideration for all the sides, but at least you tried your best to reduce

the burden of the other engineers and departments when the proposed product was approved to

be mass produced. It was a challenge to an engineer to optimize all the resources of a company

and produced a solution which can benefit the company and give good reputation to the

company.

Developing a positive relationship between the engineers is important. If the trusts were

built in the organization, they will be more likely to compromise and work towards goals.

Therefore, having good working relationship among engineers will reduce the conflict of

interest. In a working environment, engineers meet different peoples from different department.

Everyone has his/her standards and restrictions towards their position. As an engineer, building

good relationship will help to develop your working practices and were able to understand the

point of view of your colleagues and able to know how they think and how they solve problem

in different ways. What you practice will influence others to practice the similar approach in

the whole working environment. Having good relationship also improves your networking

skills, which able yourself to have wider access to more information. It will also be a stepping

stone for your career development.

Engineers faced a lot of issues and decision making moments in the working

environment. There should be having frequent discussion for a quick solution. Engineers solve

issues by providing solutions to solve the problem. Discussion can be made during meeting to

find out the best way to overcome a problem. The discussion also can be done in small groups

23
which involve members from the same department. The outcome of the discussion was to solve

the problem in only one way which was effective, reasonable and acceptable by all the

members of the group. If no discussion was been done between the engineers, everyone will

do their routine job in their own way. When problems arise, there will be conflicts on the

method used was not good enough which may lead to argument. To avoid the conflicts and

argument, engineers should make discussions often.

Conclusion
As a conclusion, the conflict of professional interest should be decrease to a minimum

in the working environment of Malaysia. This would help companies grow stronger and better.

It allows the employees to imagine the future of the company’s plans and visions. It will also

help the development of an engineer’s personal value and career. It is important to change the

working environment of a workplace which can produce a more effective but still competitive

environment.

The goals of a conflict of interest policy should be to identify potential conflicts of

interest to senior management and to allow management to be mindful of the issue in making

its decisions. The Harvard folks describe this situation this way: “If an individual believes that

he or she may have a conflict of interest, the individual shall promptly and fully disclose the

conflict to the Office of the General Counsel and shall refrain from participating in any way in

the matter to which the conflict relates until the conflict question has been resolved. In some

cases, it may be determined that, after full disclosure to those concerned, the University’s

interests are best served by participation by the individual despite the conflict.” Similarly, the

Federal Government requires the Contracting Officer to identify actual and potential conflicts

of interest and to avoid, neutralize or mitigate the conflict. FAR 9.504(a). Mitigation efforts

24
may include excluding a person or division of a company from further involvement in a

procurement, or waiving the conflict where appropriate.

Thus, in our example, it was proper for the private company can allow its consultant to

bid on a contract for equipment it recommended. The consultant did not get the work, though.

It knew about more potential problems than other competitors, and so its price was much too

high

This paper significantly overviews the factors of conflict of professional

interest which is hoped to give clearer scenario to all project teams. Mainly, this paper grouped

the conflict factors into three main factors which are conflict factors due to behavioral

problems, contractual problems and technical problems. Conflict would arise due to behavioral

problems such as poor communication among project N. Jaffar et al. / Procedia Engineering

20 (2011) 193 – 202 201 N. Jaffar, A.H. Abdul Tharim, M.N. Shuib / Procedia Engineering 00

(2011) 000–000 team, multicultural team problem and reluctant to check for constructability,

clarity and completeness of project. Besides that, conflict also arises due to the factors of

contractual problem which includes delay interim payment from client, client fails to respond

in timely manner, application of extension of time and improper project schedules. Other than

that, contractor's quality of work, error of pricing or costing, late instructions from architect or

engineer also considered as the factors of conflict which is due to technical problems. This

paper was hoped to be a useful reference to the project team in managing conflicts for future

construction projects

25
Reference:
[1] McManamy, R. (1994). Indusrty pounds away at disputes. Engineering news record, 24,3.

[2] Whitfield, J. (1994). Conflicts in construction, avoiding, managing and resolving.London:

Macmillan Press. [3] Kumaraswamy, M., & Yogeswaran, K. (1998). Significant souces of

construction claims. International Construction Law Review, 15 (1), 144-160. [4] Kathleen, M.

J. H. (2003). Conflicts between Owner and Contractors : Proposed Intervention Process.

Journal of Management in Engineering, ASCE (July 2003),121-124. [5] Smith, M. (1992).

Facing up to conflict in construction. Paper presented at the First international conference on

construction conflict: management and resolution, Manchester. [6] Hackman, J. R., & Morris,

C. G. (1975). Group task, group interaction process, and group performance effectiveness: a

review and proposed integration (Vol. 8). San Diego, CA: Academic Press. [7] Wall, J. A., &

Callister, R. R. (1995). Conflict and its management. Journal of Management, 21, 515- 558.

[8] Cheung, S. O., & Suen, C. H. (2002). A multi-attribute utility model for disputes resolution

strategy selection Construction Management Economy, 20, 557-568. [9] Pondy, L. R. (1967).

Organizational conflict. Administrative Science Quarterly, 12(2), 296-320. [10] Arditi, D., &

Pulket, T. (2005). Predicting the outcome of construction litigation using boosted decision

trees. Journal of Computing In Civil Engineering © ASCE, 387-393. [11] Shin, K.-C. K.

(2000). Identification of critical disputes characteristic (cdcs) during construction project

operations. Georgia Institute of Technology, Georgia. [12] Brown, H., & A., M. (1993). ADR

Principles and Practice. London: Sweet and Maxwell. [13] Vorster, M. C. (1993). Dispute

prevention and resolution. Austin, Texas: Construction Industry Institute (CII). [14] Deutsch,

M. (1973). The resolution of conflict constructive and destructive processes. New Haven: Yale

University Press. [15] Thomas, K. (1992). Overview of conflict and conflict management.

Journal of Organizational Behavior, 13(3), 263-274. [16] Robbins, S. P. (1994a). Essentials of

organizational behavior: Prentice-Hall. [17] Moore, C. (1989). The mediation process. San

26
Francisco: Jossey Bass. [18] Higgins, J. M. (1991). The management challenge (2nd Ed.).

Basingstoke: Macmillan Publishin

http://nazrulanuar.com/author/?page_id=1234

27