From healthy tension towards objectives to factions, relational attrition and loss of productivity: how to recognize in time the excesses of competition between colleagues and how to manage them with modern, authoritative and collaborative leadership.

Author: Marco Arezio. Expert in the circular economy, polymer recycling, and industrial plastics processes. Founder of the rMIX platform, dedicated to the valorization of recycled materials and the development of sustainable supply chains.

First published: April 2020

Editorial Update: April 1, 2026

Reading time: 12 minutes

Note

This article updates and expands the original 2020 text in light of the most recent evidence on engagement, conflict, leadership, psychosocial risk, and work organization, also including the regulatory and prevention context currently relevant for Italian companies.

Internal rivalry in companies: a useful force only as long as it remains under control

There's a truth that many companies know well but is rarely clearly stated: a certain amount of internal rivalry can be beneficial. It can accelerate execution, increase energy, push people to improve, and bring out talents that, in a too-flat environment, would remain hidden. In this sense, competition isn't bad in itself. Indeed, it becomes a positive lever when it forces team members to not rest on their laurels, to better understand problems, and to take common goals seriously.

But the crucial point is another: competition produces value only as long as it remains within a framework of mutual loyalty, minimal trust, shared rules, and recognition of the collective goal. When the rivalry changes its nature, the team stops competing against the market and begins competing against itself.

It's in that often slow and almost imperceptible transition that a seemingly brilliant department can transform into a place of chronic tension, suspicion, tactical silence, and withheld information. The latest workplace evidence confirms that safe and well-managed organizational environments reduce tension and conflict, improving retention, performance, and productivity, while cultures that tolerate negative behavior, authoritarian supervision, lack of support, or unclear roles increase psychosocial risks.

Why the internal rivalry in 2026 is no longer what it was in 2020

The article, written in 2020, hit the nail on the head: internal competition, if measured, can be helpful. Today, however, the context is more complex. Companies operate with more fragmented teams, greater pressure on KPIs, hybrid working, continuous evaluation systems, increased digitalization, and the introduction of artificial intelligence in decision-making and operational processes.

This means that internal rivalry is no longer expressed solely in the traditional clash between departments or sales figures, but can also creep into information management, digital visibility, skills management, data access, and even the relationship with performance measurement algorithms. Gallup reports that in 2024, global worker engagement fell from 23% to 21%, while manager engagement fell from 30% to 27%; according to the same research, 70% of a team's engagement is attributable to the manager, and disengagement has cost the global economy $438 billion in lost productivity.

These data are important because they show that simply saying "a little competition is good" is no longer enough. Today, we need to ask ourselves who governs it, with what incentives, what organizational culture, and what antibodies. In a company under pressure, with tired or inactive managers, rivalry doesn't remain neutral: it tends to become a system. And when it becomes a system, conflict ceases to be an incident and becomes an invisible part of everyday work.

When competition between colleagues is really useful for the company

Healthy competition exists. It's one that doesn't arise from a desire to diminish others, but from the ambition to raise one's own bar. It manifests when team members observe, challenge, and measure one another, but without compromising the flow of information, without hindering shared work, and without turning every disagreement into a test of identity.

In practice, rivalry is constructive when it increases individual commitment but does not disrupt cooperation. A good professional wants to outperform his or her colleague, but does not want his or her colleague to fail; they want to excel, not sabotage. This difference, which may seem minimal in theory, is enormous at an organizational level. Recent research shows that cooperation and competition can both enhance individual performance, but competition tends to increase perceived stress and physiological arousal, while cooperation can achieve similar benefits with a lower psychophysical load. Furthermore, in complex and highly interdependent tasks, internal competition has been associated with poorer performance, impaired communication, increased distrust, and more hostile behavior.

For this reason, in mature teams, beneficial competition is never allowed to flourish. It is contained within precise boundaries: individual goals compatible with shared objectives, transparent recognition criteria, reward systems that don't disrupt collaboration, and leadership capable of distinguishing merit from aggression. When these boundaries are missing, rivalry tends to become toxic, even if it was originally born of good intentions.

The moment when healthy confrontation turns into latent conflict

Deterioration almost never happens noisily at first. The first phase is often elegant, almost invisible. People continue to greet each other, attend meetings, and maintain a proper professional appearance. But beneath the surface, the way information is shared changes: a detail isn't reported, an update arrives late, a critical issue is addressed incompletely, a useful proposal is held back until it can no longer be exploited by others.

Then another sign emerges: the team's energy grows, but its effectiveness doesn't. There's a lot of work, a lot of talking, a lot of oversight, but the results don't improve proportionally. This happens because a growing share of mental resources is absorbed by managing internal positions, not the external problem. Competition, rather than being oriented toward the customer, the market, or the project, is sucked into corridor politics.

The CIPD findings are very clear: those who experience conflict at work report lower job and pay satisfaction, increased pressure, fatigue, and negative impacts on mental and physical health; they are also approximately twice as likely to declare an intention to leave their job. These same people rate managers' behavior lower in terms of respect, fairness, and support, and are more likely to perceive exclusionary or undermining attitudes within their team.

How internal factions arise and why managers often notice them too late

The 2020 text rightly spoke of "loyal members," new teams within the group, and broken communication. It's still a very valid image. Factions almost always arise around three elements: privileged access to the leader, control of information, and an implicit promise of protection. They don't always exist in an overt form; they often take the form of micro-alliances, dominant couples, functional groups, nuclei of people who exchange internal recognition and legitimize each other.

Managers, especially those technically competent but interpersonally underdeveloped, often realize this too late for a simple reason: in the early stages, factions produce results. They work hard, oversee a lot, and strive to shine. From the outside, they simply appear to be motivated individuals. In reality, they are already shifting loyalty from the company to the subgroup. When this shift occurs, collaboration becomes selective: those within their own area are helped, those perceived as rivals are neutralized, and communication is filtered according to political expediency.

A weak leader can actually fuel this process. Gallup describes a context in which managers, squeezed by higher expectations, reorganizations, compressed budgets, digital transformation, and new demands for flexibility, are under greater pressure than just a few years ago. Under these conditions, team leaders may be tempted to tolerate rivalry as a means of indirect control: keeping everyone on edge to avoid coalitions against them or to squeeze short-term results. This is shortsighted, because it shifts power from managing work to managing fear.

The invisible cost of excessive rivalry: information, trust, and productivity

Many managers only worry about conflicts when they erupt. In reality, the most serious damage comes earlier, when the conflict remains submerged. A fractured team doesn't collapse immediately: it slows down. And it slows down at the most critical point: the quality of information.

When colleagues become hostile competitors, information ceases to be circulated as a common good and becomes private leverage. Details are omitted, partial versions of problems are provided, and files are overseen not out of a sense of responsibility but out of symbolic territorial control. The result is that decisions deteriorate, timelines lengthen, errors increase, and accountability becomes blurred. In such a context, even competent people perform less effectively, because they work with an incomplete vision and a constant emotional burden.

The literature on psychosocial risks and mental health at work converges on one point: problems are not only related to personalities, but also to how work is designed, managed, and organized. Excessive workloads, poor job control, an organizational culture that tolerates negative behavior, poor support from colleagues or authoritarian supervision, role ambiguity, and unclear career development are all factors that increase tension, conflict, and deterioration in mental health. The WHO therefore recommends organizational, not just individual, interventions, that is, actions that modify working conditions and environments, accompanied by training for managers in listening skills, open communication, and acknowledging distress.

Weak leadership, divisive leadership, and absent leadership

Not all pathological rivalries arise from bad people. Many arise from bad management. Here, it's useful to distinguish three scenarios.

The first is weak leadership: the manager avoids making decisions, fails to clarify boundaries, fails to correct ambiguities, and lets everyone build their own power space. Under these conditions, the team self-organizes, but not in a virtuous sense: it splits.

The second is divisive leadership: the manager uses competition as a permanent tool of governance, rewards those who strengthen him, fosters personalized confrontations, distributes information asymmetrically, and confuses pressure with management. Initially, this gains loyalty and speed; in the medium term, it generates distrust, tactical thinking, and dependency.

The third is absent leadership: the manager is formally present but essentially disconnected from the real life of the team. He doesn't pick up on weak signals, he doesn't monitor the climate, he doesn't understand where loyalties are shifting. This is perhaps the most dangerous form, because it allows conflict to become institutionalized without ever mentioning it.

Recent evidence supports this interpretation. Gallup directly links manager engagement to team engagement, while the CIPD shows that in workplaces marked by conflict, people rate the respect, fairness, and support they receive from their superiors lower.

Hybrid work, AI, and target pressure: the new amplifiers of conflict

In 2026, there's another element that's different from 2020: many tensions aren't born in front of the coffee machine, but within digital environments, dashboards, company chats, project platforms, and monitoring systems. Visibility is no longer just physical: it's numerical. Every KPI, every response time, every closed ticket, every forecast, every performance data point can become part of the conflict.

This doesn't mean that technology automatically breeds toxicity. It does, however, mean that technology amplifies what a company already is. If the culture is solid, digital tools increase transparency and coordination. If the culture is fragile, the same tools make confrontation permanent, fuel constant micro-competitions, and reinforce the need to assert one's value to the system.

It's no coincidence that INAIL updated its platform for assessing and managing work-related stress risks in 2025, introducing specific modules related to remote working and technological innovation, a sign that psychosocial risks are no longer viewed solely through traditional lenses. Furthermore, the Italian regulatory framework remains clear: risk assessment must address all health and safety risks, including those related to work-related stress.

The most common mistake companies make here is to approach the issue solely as a matter of individual well-being. In reality, it's a matter of organizational design. A system of objectives that rewards only individual visibility and not the quality of cooperation inevitably creates friction. A department where everyone must always excel, in everything, ends up no longer knowing how to work together in critical moments.

How to build healthy competition without humiliation and sabotage

Effective internal competition doesn't arise spontaneously: it must be planned. The first principle is that people must be able to excel without destroying the context in which they operate. This requires intelligent incentives. If I only reward those who finish first, some people are likely to stop sharing their knowledge. If I also reward the quality of contributions to the collective result, then individual merit no longer equates with competitive isolation.

The second principle is clarity. Many internal conflicts arise from confusing roles, overlapping decision-making boundaries, opaque evaluation criteria, and conflicting expectations. Where clear rules don't exist, a struggle inevitably ensues to interpret them in one's favor.

The third principle is psychological safety, which doesn't mean do-goodism or lack of judgment, but rather the ability to speak up, disagree, point out mistakes, and raise issues without fear of symbolic reprisals or isolation. Recent research links psychological safety to improved communication processes and improved outcomes in terms of learning and innovative performance; the WHO, for its part, emphasizes the need to train managers in more open communication and more competent listening.

The fourth principle is timeliness. When signs of ostracism, withholding information, devaluing irony, systematic bypassing, or overly rigid relational networks appear, the manager must intervene promptly. Not with abstract moralizing, but with concrete actions: realigning roles, communication rules, reviewing information flows, redefining reward criteria, direct mediation, and, if necessary, taking a clear stance on behaviors incompatible with teamwork.

The role of management in preventing organizational damage

Ultimate responsibility doesn't lie solely with the department head. It's with company management. A mature organizational culture doesn't simply say "we must collaborate": it builds systems that make collaboration practical and cost-effective. This means asking whether bonuses fuel destructive rivalries, whether managers have truly been trained to manage conflict and people, whether credible listening tools exist, and whether organizational risk assessments also include the quality of relationships.

The best organizations don't eliminate conflict. That would be impossible and even undesirable. Instead, they eliminate unproductive conflict, the kind that consumes energy without generating learning, and maintain useful conflict, that is, serious discussion of ideas, priorities, and methods. The difference between the two depends on the level of leadership.

In 2020, the issue might have seemed primarily cultural. In 2026, it's also a question of productivity, retention, mental health, regulatory compliance, and managerial resilience. A company that underestimates excessive internal rivalry risks not only a poor climate, but also a deterioration in decision-making quality, lower organizational loyalty, and a progressive loss of competitive energy towards the outside world. The ultimate paradox is precisely this: when a team spends too much time fighting each other, it becomes less capable of truly competing.

Conclusion

Healthy rivalry in companies is desirable. The original text was right about this, and time hasn't disproved it. What 2026 brings is the awareness that competition, left unmanaged, degenerates more easily than previously thought. Under pressure, within hybrid and digitalized structures, with overworked managers and often overly individualistic reward systems, competitive energy can become latent conflict, factionalism, information sabotage, and organizational attrition.

This is why the right question isn't whether internal rivalry is good or bad. The right question is: who contains it, who directs it, and for what purpose. If it helps improve the quality of work, it's a resource. If it helps build small internal kingdoms, it's already a hidden cost. And hidden costs, in companies, are often the ones that reach the furthest.

FAQ

Does competition between colleagues always increase productivity?

No. It may increase individual engagement in some situations, but in complex and interdependent tasks it can degrade communication, trust, and overall results.

What's the first sign of a toxic corporate rivalry?

Usually, it's not open arguments, but a reduction in the quality of information: omissions, delays, selective communication, subtle exclusions, and the protection of one's own perimeter.

Is the problem with people or leadership?

Both dimensions matter, but recent evidence shows that managerial quality and organizational design have a decisive impact on engagement, conflict, and climate.

Is work-related stress related to internal rivalry?

Yes. In Italy, work-related stress risk is included in risk assessment, and INAIL updated its tools for remote work and technological innovation in 2025.

What should a manager do immediately when he sees two factions emerging?

Clarify roles and responsibilities, rebalance the flow of information, correct divisive behaviors, review incentives and metrics, and refocus on the common goal.

Sources

Gallup, State of the Global Workplace 2025.

CIPD, Good Work Index 2024: Survey Report.

World Health Organization, Mental health at work and Guidelines on mental health at work.

Ministry of Labor and Social Policies, Question No. 2/2023 on Legislative Decree 81/2008.

INAIL, 2025 update of the platform for assessing work-related stress risk.

Recent studies on cooperation, competition and performance in teams

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