A conflict of interest occurs when an individual or organization has multiple interests that could potentially influence their decisions or actions. This situation can lead to biased judgment, as personal or financial interests may interfere with the duty to act in the best interest of others, such as clients or stakeholders. For example, if a company executive has a financial stake in a supplier, their decision-making regarding contracts could be compromised. It is essential to identify and manage conflicts of interest to maintain trust and integrity in professional relationships and ensure fair outcomes.