Does internal competition benefit an organization or does exactly opposite? Interesting Debate

There is a lot of literature extolling the virtues of culture of competition in organizations. There are firms across different spheres, have truly adopted that and we have seen some great leaders and performances from such firms. There are theories of how competition drives excellence, develops environment of constructive and positive pressure on employees who strive for more and more. The New York Times best seller by Po Bronson and Ashley Merryman, Top Dog : the science of winning and losing, draws from physiology and psychology to conclude why competition brings excellence and progress.

Rarely, do we come across any literature that does exactly opposite, systematically destroys the arguments for competition and puts forth a view which is on the opposite side of the spectrum - a culture that encourages more on individual and absolute performance, collaboration and networking. The book, Knowing-Doing Gap, by Jeffrey Pfeffer and Robert.I.Sutton (Harvard Business School Publishing), in its attempt to explain what goes wrong when an organization tries to monetize its knowledge by bringing them to action, does exactly that putting a contrary and diametrically opposite view to the culture of competition. A very interesting read and a completely goes against some commonly held beliefs around benefits of competitive culture.

(Excerpts from one of the chapters of the book, The Knowing-Doing Gap , Jeffrey Pfeffer and Robert. I. Sutton, Harvard Business School Press)

"Success and competition are not at all the same thing...One can set and reach goals without ever competing...I can succeed...in writing a book without ever trying to make it better than yours...Competition need never enter the picture in order for skills to be mastered and displayed, goals set and met" Alfie Kohn, No Contest : The Case Against Competition

While going through this book which talks about how some smart companies turn knowledge into action, I felt compelled to put the highlights of one chapter here. Attacks a lot of notions around the virtues of "Competitive Culture", "Culture that fosters competition". Some good points to ponder. These views can be very contrarian to what many organizations believe. Some of the thoughts are up for a debate - a very stimulating reading and thought provoking.

1. Doing well is not the same as winning - the section says why competition is all so not important. Some examples of the paradoxes of firms and industries where typically there are high internal competition are mentioned in the article - like an example of a brokerage firm was mentioned. A new comer is ridiculed in public, who eventually gets fired and the organization loses yet another employee. The fired employee initiates a law-suit against the firm and the firm sends message to the employees that an employee will be paid well as long as he / she brings in revenues, regardless of what is his behavior towards other employees or even the organization itself.
2. Internal competition may seem fair to individuals, but the cost to the organization is usually high - the section systematically destroys the benefit of relative grading. It goes on saying that in a relative scheme of grading and peer group ranking, people every individual attempts to propel himself forward and often in doing so sees incentive in to avoid helping their peers to improve performance, and at worst, to undermine or sabotage their peers' performance!
3. Management entails mostly novel intellectual tasks, not routine physical work - the section opposes the notion of equating good management with sports / race, as saying that business often involves novel and complex intellectual rather than physical tasks and therefore the analogy of sports is irrelevant.
4. Interdependence, not Independence is the fact of organization life - Productivity, performance, and innovation result from joint action not just individual efforts and behaviour. The section also characterizes an organization as cooperative systems that depend on coordinated activities of numerous interdependent individuals. I think this notion is also valid for Networking, which is the skill of individuals within the organization to collaborate and coordinate with large number of other people.
5. Leaders are often trained and rewarded for valuing internal competition - The authors go on to say that organizations establish dysfunctional internal competition because the leaders are and managers have achieved their position by winning a series of competitions. The traditional leadership model is based on a competitive dynamic that emphasizes winning a contest in which one's success requires failure of others. Which is always a zero sum game. It starts from the ranking system in school and culminates in the organization where the odds of winning are even smaller. Internal competitive dynamics are therefore for these reasons very pervasive.

The chapter summarizes some of the situations when internal competition is most likely to be harmful to the organization

* People have incentives to avoid helping others or even sabotage their work

* Leaders act as if performance comes from sum of individual actions rather than interdependent behaviors like cooperation, knowledge sharing and mutual assistance

* Management encourages or believe competition as if people are competing in a "race" or "tournament" with only few winners and many losers.

* Competition and evaluation / rankings distracts people from task at hand because they constantly feel they are under scrutiny and constantly being compared to others

* Comparative or relative, rather than absolute, evaluations are emphasized

* Leaders are selected because they value competition and have a history of dominating peers in zero-sum contests

* Little attention is paid to the power of expectations and the self-fulfilling prophecy, so people are labeled as "losers" or as being part of bad unit and feel a lack of self-worth and resentment towards the firm

Which side of the debate carries more merit , 'for' or 'against' the culture of competition in an organization...What's your view?

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Some of the contents of this article are quoted and referred to as it is as mentioned in the book.