The beneficial effects of competition are undeniable, but serious internal rivalries defeat the purpose of having a company with a formal organization in the first place, by diminishing economies of scale and actually increasing the costs of monitoring people’s behaviour. You should be able to trust your fellow workers more than you trust workers at other firms. But at a company like Enron, you couldn’t. And because the competition is, in any case, artificial – since people are competing for internal resources, not in a real market – the supposed gains in efficiency are usually an illusion. As is the case with today’s American intelligence community, descentralization only works if everyone is playing on the same team.

James Surowiecki – The Wisdom of Crowds


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