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In today's interconnected professional world, employees often have affiliations outside their primary workplace. This phenomenon can be harmless—or even beneficial—until two employees find themselves representing rival entities.

The article "When Colleagues Compete Outside the Firm" by Thorsten Grohsjean of Bocconi University's Department of Management and Technology, Henning Piezunka of the Wharton School, and Maren Mickeler of ESSEC Business School in the Strategic Management Journal offers fascinating insights into this dynamic by examining an unusual case: Professional soccer players who become rivals on national teams while playing as club teammates.

The study's focus is a critical yet understudied setting: when coworkers who typically collaborate within an organization engage in competition outside of it. Using data from the 2018 FIFA World Cup and top European soccer leagues, the researchers observed that teammates who competed against each other on opposing national teams subsequently reduced collaboration within their shared clubs, as evidenced by a significant decrease in passes exchanged during club games.

As Grohsjean notes, "The interplay between extra-organizational affiliations and internal collaboration is complex, yet our findings demonstrate a measurable effect: after facing each other as competitors, teammates exhibited a notable reluctance to collaborate at club level."

The risk of double allegiances

The most significant finding of the study is the measurable impact on collaboration. In the season following the World Cup, players who had faced a club teammate as a national rival passed the ball to each other around 11% less often. This reduction in collaboration illustrates how external competition can create lingering tensions, even after returning to the shared goals of their club team.

The researchers hypothesize that two conditions are needed for this effect to occur. First, players must identify strongly with their national team, leading to intensified rivalries. Second, the competition itself must be highly intense, such as in high-stakes tournaments like the World Cup. This setting maximizes identification with national pride and creates "an adversarial perception" among players who, while teammates, view each other as members of opposing groups.

How they found out

The researchers used a robust difference-in-differences design, comparing passing behavior among two groups: treated dyads, who played against each other as national opponents, and control dyads, who did not. By tracking detailed in-game data across multiple European leagues, they measured the frequency and direction of passes between players.

The World Cup offers an ideal quasi-experimental setting due to its random way of selecting opposing sides. As Grohsjean explains, "Players have little influence over whether their national teams will face each other," which minimizes the potential for self-selection bias and allows a clearer view of how external competition affects internal teamwork.

Implications and broader significance

This study suggests there is a potential blind spot for managers in any organization. Similar to soccer players competing for their national teams, employees might hold roles or participate in organizations outside their company that are in competition with each other. For instance, corporate executives may sit on boards of rival companies, or employees may actively support opposing political causes.

Organizations, then, should note and monitor these affiliations, as such rivalries can subtly yet significantly erode internal cooperation. The study's findings reveal that managers may need to address and mitigate these extra-organizational tensions to preserve productive collaboration within the workplace. As Grohsjean remarks, "Our work underscores the importance of understanding affiliations outside of the workplace, as these hidden rivalries may unknowingly reshape professional relationships within it."