Most larger companies do performance management, where the bottom x% lowest performers are laid off every year or every few years. In my experience working in small companies, performance management has been nonexistent or very timid. HR almost always puts roadblocks when firing people, except for egregious acts like sexual harassment or stealing, making it next to impossible to fire bad performers. Likewise, bad people (who are basically somewhat competent or not incompetent) still run amok regularly and are actually given relatively free rein because of nonexistent HR, weak HR, nonexistent management, weak management, or just plain nepotism (knows the VP or founder, for example) or all of the above.
Larger companies have many defenses against this sort of thing, and they actually work a lot of the time. Of course, there are large-group politics wherein huge groups (200-300+) battle against one another, in large companies. But those are of a different nature and are considerably less nasty.