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The problems of sub‐optimisation and resistance to change are chronic in organisations. Sub‐optimisation is endemic in horizontal relations, resistance to change in vertical relations. Both involve a dynamic trend towards maintenance and/or improvement of one's strategic position in relation to others in the organisation. Two solutions are presented: structural — from vertical control to horizontal competition; and skills — how to balance co‐operation and competition, with particular emphasis on negotiating skills. The structural approach attempts to reduce intergroup rivalries and to channel competitive energies towards organisational goals by using organisational structure and incentives. The skills approach focuses on the negotiating process as a set of social skills to balance co‐operation and competition. A model of negotiating is presented which could be instrumental in charting the behaviour of negotiators, e.g. in training sessions for structuring feedback.