MIT Sloan Management Review Article on Competition From the Inside Out

When we think about business competition, rivalries between companies typically come to mind: Coke versus Pepsi; Ford versus GM; Airbus versus Boeing. But a focus on external rivalries can blind us to the reality that competition is pervasive inside companies as well. Departments compete for budget, R&D teams compete to develop the company’s next-generation product using different technical approaches, and individuals compete for management accolades and promotions.

Competition — interactions in which individuals or groups vie for resources that are limited in supply — is inevitable. Depending on how it is handled, internal competition can spur excellence and catalyze innovation, enhancing organizational competitiveness in the marketplace — or it can drive toxic conflict, undermining a company’s ability to compete successfully with external rivals.