Abstract for: Fallacy of “Decomposition”: Cooperation rather than Competition inside Organizations

In general, competition in markets stimulates companies to survive and make better products at lower cost. Through this process, effectiveness is increased and innovations happen. These results are also desired inside companies and other business organizations. Therefore, many organizations introduced a competition mechanism into their organization inside. However, the expected good results have not always appeared. Competitions inside are not magic wands to make people employees. Indeed, workers have been stimulated in some contexts and some of them have improved their performance eagerly. Nevertheless, the performances of whole organizations have often failed to elevate. This paper shows that cooperation based on professionalism inside organization is more important than competition inside. System dynamics models and simulation results in this paper explain that macro mechanism, like a markets’ one, cannot be employed as micro mechanism. This kind of mechanism import failure should be called fallacy of “decomposition.”