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Dilemma: Conflict of Interest

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The situation:

Your client is a small manufacturer, the smallest of three players in a niche market. The other two companies are much larger than your client, and this niche produces just a small portion of each of their total revenues. For your client, on the other hand, this niche is a major source of revenue, even though its total revenues from this niche is smaller than that derived by the two bigger players.

You’ve worked with this client over the years, and now they’ve asked you to assist them in expanding their business. You’re doing a market analysis, helping them re-define the segments, understand their competitors’ positions, and assess whether and how the technology might be applied to other, untapped markets.

A third or so into this current assignment, you are approached by the largest of the three players. Apparently they have also realized that the technology used to serve the current niche has great potential in a couple of new applications. They want you to do for them essentially what you are doing for your much smaller client, i.e. assess the market potential. The larger company has far deeper pockets, both for a much more thorough market assessment than your own client can afford, and for the marketing and sales program necessary to open up this new market successfully.

What do you do? (A) You could tell the larger company "no thanks," thereby tipping it off that you are already working with one of their competitors (your policy on not taking competitive clients is clear). (B) You could hedge to buy some time to get back to your own client to let them know what their competitor is thinking (the larger company gave you this information in confidence). (C) You could plead "too busy" to the larger firm and continue with your current client as though nothing had occurred. (D) You could take both their checks and run. (E) You could act as a broker between the two companies, trying to persuade the smaller one to sell out to the bigger one. Or...?

Consultants? What would you do? What other options would you consider?

Managers, Executives? If you are in the position of either the smaller or the larger company, what would you expect consultants to do? What would you want them to do? What do you think is the best (most honorable?) solution?

Comment on our Dilemma Discussion WebBoard

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