Fair point, however we have seen this in other companies, and I think where it goes wrong is that the competition is skewed to promote selfishness. This is done by threatening jobs and pay, so this puts a negative spin on competition.
However we see when departments compete for customer satisfaction levels, and bonus attached sales targets, it can be a good thing.
I take your point though, that Sears had a toxic atmosphere brought on by this kind of competition.
Cg