Mar 13, 2006

On Competition

Veer points me to this post by Mayank. While Mayank brings to the post is a reasoning that strong competition is great for customers and for organizations.

I'd like to add to the fact that strong competition is beneficial to the organization when the organization is an 'open system' i.e. it senses feedback from and reacts to changes in the external environment. That means that an organization that hears and listens to negative and tough feedback from employees, vendors, customers and partners.

In these organizations there are no impediments for passing bad news from frontlines to middle and top management. These organizations do not pass the buck but take action on any sensing of change in the environment. Bureaucracy and organizational processes enable the change and learning to be embedded in the DNA of the organization.

However, if an organization is a 'closed system' where politics is played and blame-games are the norm, then strong competition only hastens the demise of the firm !