Nick Bostrom's point is important: We should regard the induced competition as a negative externality of the process that induces the competition -- grant writing, consideration for promotion, etc. The "correct" solution as Bostrom points out is to internalize the cost.

I think good companies do this quite carefully with the inducements they build into their culture -- they are looking to only generate competition that will produce net benefits to the company (not always the individuals).

Conversely, there are well known shop floor self-management processes (workers punishing each other for competing to win management favor) that form to prevent exactly this kind of zero-sum competition (zero sum from the worker's point of view since they don't get a share of the increased profits).

I would bet that in at least some granting processes, informal regulation like this arises to control the costs to applicants. It would be especially easy in the context of peer review.

This is a reasonable interpretation of behavior that produces "old boys clubs" -- the members of the club have formed a coalition to reduce their costs of marginal zero-sum behavior. Of course it imposes other costs...