@ddljohn-- Conflict exists at all workplaces, but the administrators should have ways of dealing with it.
I think that conflict doesn't only arise from organizational policies. If an organization is competitive as you said, it can contribute to conflict. But I think the real reason behind conflict is poor communication. Employers and employees either don't talk to one another or don't understand each other.
I think that people who work together need to be able to talk to one another and share their opinions. But in some organizations, there is a very rigid, bureaucratic structure which prevents this. People are not very comfortable with one another and this is reflected in the organizational structure.