In organizational theory, there is a brutal rule: when a team loses its shared external adversary, its internal order often begins to unravel. On the surface, everyone is still working toward the “mission,” but in reality, energy has shifted from “how to win in the market” to “how to distribute credit” and “who can survive longer within the system.” The enemy is no longer the competitor—it’s the person next to you.

I’ve seen many teams rapidly descend into internal friction after losing external competitive pressure. It starts with meetings growing longer—everyone vying for a voice. Then, reports multiply—everyone rushing to prove they still matter. Finally, a favoritism culture quietly takes shape. Whoever is more “like the boss” gets heard more easily. And those who actually do the work and speak the truth are often the first to be “optimized out.”

The core logic of favoritism culture is actually quite simple: in an organization without a clear enemy, loyalty is safer than competence. Because an enemy can unify goals, and when the enemy disappears, the only thing left to maintain order is “trust.” But this trust is usually not based on expertise or performance—it’s based on “what kind of person you are to me” and “whose side you’re on.” Thus, factions replace standards, and emotions replace systems.

The result of this ecosystem is “bad money driving out good.” Those who are better at aligning with superiors and packaging themselves stay; those who insist on principles and pursue efficiency are marginalized. Over time, the entire team develops a pathological state of “fiercest internal competition, weakest external competition.” Everyone is exhausted from defending themselves, and no one is truly fighting anymore.

The question is: we all know this terrible trajectory, so why can’t we change it? Why do middle managers, who should be the ones to drive change, instead become the guardians of the status quo?

The answer isn’t simply “human nature”—it’s a set of real-world logics tightly woven from systems, risks, and interests. Let’s start with the two most direct factors: incentives and risk.

A manager’s promotion and job security are often tied to “short-term visible results.” When you attempt a risky reform—removing a connected key person, implementing more transparent evaluations, or allocating more resources to dissenting voices—the results won’t show within a single quarter. The higher-ups won’t see the change, but they will see the conflicts, complaints, and even the “bloody headlines” you’ve caused. So the rational calculation is simple: the expected return on risk is far less than the immediate cost. In plain terms, they’re calculating their internal rate of return (IRR) at work. Expecting them to bet on a ten-year horizon for improvement next year? Unrealistic.

Second is the network and chain of responsibility. Power within an organization is not an isolated point—it’s a web. A manager protects certain people in exchange for short-term stable output, personal favors, and social capital. When you try to disrupt a node in this web, you’re not just touching one person’s interests—you’re triggering an entire chain of hidden debts and potential retaliation. Many managers spend their days maintaining a “manageable bad” at minimal cost, rather than risking an uncertain good.

Going deeper, there’s the issue of cognitive and cultural inertia. People in groups face strong pressure to conform. Even if a manager knows the process is flawed, they are easily infected by the anxiety of those around them: Who paused innovation? Who tightened their team first? When the entire middle management is contracting, it creates a self-reinforcing spiral. Conversely, the few who stick to their principles get labeled as “difficult” or “idealistic,” and the cost of their actions is socially amplified.

Then there’s the hypocrisy of institutional design. Many organizations pay lip service to “transparency, fairness, and empowerment,” and their budgets and mission statements often look great. But the actual approval processes, resource allocation rhythms, and performance review criteria quietly maintain the old order. So good intentions become smokescreens, and the real power games happen outside meetings. Managers are drained daily in the gap between “saying” and “doing.” Over time, who dares to be the first to move that stone?

When I say this, I’m not standing on a moral high ground; I’m putting myself back in that middle position where you could be reported, isolated, or labeled by HR. The real pain is two-sided: on one hand, you see what an ideal organization should look like and want to fix it; on the other, you fear that the cost of fixing it will first consume your small world—your team, your project, even your career path. So compromise becomes a survival strategy, and survival strategies, over time, become habits.

This is why there is always an invisible river between “knowing” and “daring to act.” Many change efforts fail not because the ideas are wrong, but because the cost of swimming that river hasn’t been accounted for: who bears the first backlash? Who bleeds on the first quarter’s KPIs? Organizations often fail to create a protective layer for reform, so smart people choose to hide their initiative, comply on the surface, conserve energy privately, and wait for the next external crisis to pull attention back.

From micro to macro, this logic is amplified by a universal psychological principle: loss aversion. People would rather hold onto their current position, even if it’s toxic, than risk giving it up for an uncertain improvement. For managers, this isn’t cowardice—it’s a rational response to future uncertainty. But its side effect is that when an organization has no enemies, the energy for internal purges is ignited instead.

So what can be done? Not by shouting slogans, but by acknowledging several harsh realities and systematizing them: First, any manager who wants to change must have “short-term protection”—whether it’s a clear pilot window or written guarantees from higher-ups. Second, systems must embed “tolerance for failure” into performance reviews and promotion logic—if failure is recorded in your file, who will dare to try? Third, information flow must be more transparent, compressing the space for those who profit from information asymmetry. Fourth, and hardest of all, the evaluation community must change—bring in more people from diverse backgrounds to judge, rather than just listening to the “inner circle.”

I’m not saying this as a hero teaching you how to save your organization. I’m laying out my own choices plainly: I once chose compromise at a certain point, not because I didn’t believe in my principles, but because I had people I was responsible for, and I couldn’t let an entire project collapse due to one idealistic stand. The guilt from that compromise grows into insight in the quiet of the night: either you can bear the cost of being the disruptor, or you become someone within the system who is better at repairing the cracks. Both paths are real; there is no sacred superiority in either.

Finally, to say something not particularly romantic: the internal purges that happen when there is no external enemy can’t simply be explained away as “a sick culture.” It’s the accumulation of history, the distortion of systems, the redistribution of interests, cognitive biases, and short-term calculations layered on top of each other. Understanding this is more useful than being angry. Only when we can both see these resistances clearly and offer executable small protections in action—even if it’s just buying three months for a small experiment—can an organization slowly reverse the path of bad money driving out good.

Writing this, I’m not casting myself as a “savior.” I’m just voicing the pain of being a participant: you want to change things, and you also calculate the consequences. What you can often do is take two steps—first, bandage the wound so your temperature doesn’t drop too fast; then, when you have enough strength, find a way to dig out the rotten bone. It’s not romantic, but in reality, it’s more survivable than shouting “fix the system,” and more likely to lead to small, real changes.