The False Choice Between Competition and Collaboration

In the corridors of corporate offices and the pages of business journals, leaders routinely frame competition and collaboration as opposing forces. This binary thinking suggests organisations must choose between fostering internal rivalry or promoting teamwork. Yet mounting evidence from across industries reveals this perceived dichotomy to be fundamentally flawed. The reality is that competition and collaboration are not mutually exclusive but rather complementary forces that, when properly balanced, create powerful advantages for businesses and individuals alike.

Rivalry Reference Effect

Recent research examining Twitter data from 100 brands across 20 product categories between 2020 and 2022 has revealed what scholars term the “rivalry reference effect” [1]. When brands reference a rival versus a non-rival competitor in public messages, consumer engagement increases substantially. This occurs because consumers perceive rivalry references as embedded within a broader, ongoing story that feels more meaningful and engaging.

Consider Pepsi’s 2019 tweet: “We don’t have Pepsi, Coke OK? #SixWordHorror.” Far from representing cutthroat competition, this exemplifies how brands can engage in strategic rivalry whilst simultaneously operating within collaborative frameworks that benefit entire industries [2].

The power lies not merely in competition itself, but in the narrative framework that rivalry creates. As Borah et al. write in Harvard Business Review, “Unlike ordinary competition, rivalry is rooted in shared history and features the essential elements of compelling storytelling: identifiable characters (the competing brands) and an engaging plot (drawn-out conflict for supremacy)” [3]. When Samsung targets Apple or T-Mobile takes aim at Verizon, they’re tapping into existing story arcs that consumers already find compelling.

Notably, this research challenges conventional marketing wisdom about message tone. For brand loyalists — a company’s most valuable customers — negative messages about rivals significantly outperform positive ones [4]. This makes intuitive sense. Loyal customers derive part of their identity from their brand preference, and negative rivalry messaging reinforces their choice whilst providing an opportunity to feel superior to “the other side.”

The Collaboration Imperative

Whilst rivalry creates engagement, collaboration drives sustainable success. A study by the Multidisciplinary Digital Publishing Institute found that collaborative competition lasting three to five years had more than a 50% chance of mutually reducing company costs [5]. This phenomenon, termed “coopetition,” demonstrates that the most profitable partnerships often emerge between direct competitors.

Amazon Marketplace exemplifies this principle. Amazon benefits from the margin on third-party sales, whilst sellers gain access to a vast customer base and established platform [6]. Similarly, YouTube and Vimeo have found mutual benefit in allowing creators to publish across both platforms. As Vimeo CEO Anjali Sud explains, this collaboration “unlocked a totally new strategy for our company…one of the biggest value-adds in our product, and it all came from flipping the script in terms of how you think about whether someone is a competitor or a partner” [7].

Perhaps the most striking example of coopetition exists between Apple and Samsung. Whilst their Galaxy and iPhone products compete directly, Samsung simultaneously serves as one of Apple’s primary suppliers, providing screens for iPhones [8]. This relationship demonstrates that companies can compete in some areas whilst collaborating in others, creating value for both parties.

The Collaboration Advantage in Teams

Within organisations, the choice between competition and collaboration becomes even more nuanced. Research consistently shows that internal competition, when poorly managed, creates destructive environments. Speaking to Forbes, one executive recounted working for a CEO who “created intense competition among the leadership team. He even hired two people to do the same job and didn’t tell them” [9]. The result was predictable: “a culture of back stabbing, in-fighting and resource hoarding. No one on the leadership team trusted each other.”

Such environments prove counterproductive because they encourage resource hoarding rather than sharing. Former Forbes Councils Member Shawn Kent Hayashi makes the point that when competition dominates internal dynamics, “people hoard systems, information and support staff. They’re less likely to share all kinds of resources — physical and intellectual. Those who see solutions for problems don’t share them until they can be sure they’ll get the credit” [10].

Conversely, collaborative environments create what researchers call a “force multiplier.” Unity speeds up decision-making, improves morale, and fosters innovation [11]. As CEO and former Mayor of Arlington, Texas, W. Jeff Williams writes, when teams collaborate effectively, they “put all their energy into positive movement, not internal battles. People embrace collaboration instead of competition. Leaders listen instead of lecturing” [12].

The Psychological Foundations

The preference for either competitive or collaborative approaches often stems from deeper psychological needs. Research published in the European Journal of Social Psychology reveals that schadenfreude — pleasure in others’ misfortune — meets basic psychological needs for self-esteem, control, and belonging, particularly in competitive scenarios [13]. However, this same research suggests that such feelings, whilst natural, can become counterproductive if they dominate workplace dynamics.

More constructively, competition can drive performance improvements. A study of professional archers found that those with direct rivals present at events performed significantly better than those without competitors, a phenomenon dubbed “the rival effect” [14]. This suggests that competition, properly channelled, enhances rather than undermines performance.

The key lies in understanding that competitive instincts can coexist with collaborative behaviours. As one NFL player turned actor discovered, “my ability to focus, practice, rehearse, and keep my plan in mind at all times did transfer” from sports to theatre, even though the specific skills did not [15]. The drive for excellence and continuous improvement proved valuable across domains when coupled with collaborative learning from mentors and peers.

Strategic Implementation

Successfully balancing competition and collaboration requires strategic thinking about when and how to deploy each approach. For brands, this means identifying true rivals — those with shared history and consumer recognition of the competitive relationship — rather than attacking all competitors indiscriminately [16]. Effective rivalry messaging should feel like “natural chapters in an ongoing story”, say Borah et al., rather than random attacks.

Within organisations, leaders must distinguish between healthy competition and destructive conflict. Amy Walker, executive vice president of sales at Paycom, emphasises that competition should focus on “winning as one” rather than individual success. “When one of us wins, the whole team becomes closer to reaching our collective goals, which becomes a massive boost in culture” [17].

This approach requires careful attention to context and audience. Negative rivalry messaging works well on brand-owned social media platforms where loyal customers concentrate, whilst broader audience campaigns benefit from more neutral tones [18]. Similarly, internal competition works best when directed toward external benchmarks rather than pitting colleagues directly against each other.

The Innovation Dividend

Perhaps most importantly, the integration of competition and collaboration drives innovation. Companies that maintain competitive edges whilst engaging in strategic partnerships often outperform those that choose exclusively competitive or collaborative approaches. This occurs because competitive pressure creates urgency and motivation, whilst collaboration provides access to resources, knowledge, and capabilities that would be impossible to develop internally.

Consider how collaborative competition between teams can create an intensity that generates powerful results for an organisation whilst avoiding the destructive effects of individual competition [19]. When teams compete against external benchmarks or other teams whilst maintaining internal collaboration, they achieve both the motivational benefits of competition and the resource-sharing advantages of collaboration.

Embracing the Paradox

The evidence suggests that framing competition and collaboration as opposing forces represents a fundamental misunderstanding of how successful organisations operate. The most effective leaders recognise that these dynamics can and must coexist. They foster internal collaboration whilst maintaining competitive edges against external rivals. They engage in strategic partnerships with competitors where mutual benefit exists whilst competing vigorously in core markets.

This integration requires nuanced leadership that can shift between collaborative and competitive modes depending on context, audience, and objectives. It demands cultural sophistication that celebrates both individual achievement and team success. Most importantly, it requires abandoning the false choice that has limited so many organisations’ potential.

The businesses that thrive in today’s complex environment will be those that master this paradox, harnessing both the motivational power of competition and the multiplicative effects of collaboration. They understand that in a world of infinite complexity, the answer to “competition or collaboration?” is simply “yes.”