What Are the Advantages and Disadvantages of Interorganizational Conflict?

Competition can promote market growth and lead to better products supplied to the consumer market, but it can also lead to an exhausting workload and immense financial strain for the companies invested in competing, which can cause further problems. The issue is a complex one that encompasses capitalist economics and influences, based on the performance of the marketplace and other market forces.

Competition is meant to drive the market to improve and, in many instances, it does so. When multiple producers are made to compete, they must provide better services and goods in order to stand out from their competition so long as that competition remains ethical and legal.

Competition necessitates that companies spend money. They must purchase market reports, make projections and improve their product lines while also engaging in advertising. This process can be very expensive and can even damage a company's profitability in time. This can lead to the destruction of livelihoods through intense competition and the attendant costs.

Where competition is seen as onerous, trusts and cartels may also form as a way of defraying the necessity of the competitive process. This is a common result of competition between organizations in that it can lead to the stagnation of progress and quality.