Internal competition

Internal competition at work: Worth the trouble?

January 25, 2012: 12:45 PM ET

Some successful companies have thrived off of making their employees compete against each other, giving many a manager the brilliant idea that they should try it at their own office. They should think twice before going down that road.

FORTUNE -- You would never hear a management consultant advise a company to create a more cutthroat environment. "You know what we need here? Fear. More backstabbing."

No, collaboration seems to be the word of choice for management experts and informed CEOs alike. "Collaboration is fundamentally the best approach towards management," says Michael Serino, executive director of Human Capital Development at Cornell's Industrial and Labor Relations School. Whether it's accurate or not, most people in business today tend to believe that collaborative work delivers better results.

And yet, several Fortune 500 companies foster competitive internal environments. Consulting companies and law firms are famous for this. They tend to have an "up or out" promotion model -- everybody wants to make partner, and after a certain point, people either move up to those coveted positions or they are encouraged to find employment elsewhere.

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