Earlier quoted context omitted.
Rules for Rulers is real. It's not that management is dumb, it's that every layer of management is self-interested. Every hierarchy has to contend with principal agent problems. Organizations can do a better or worse job of it, but the incentives are always there and they lead to predictable inefficiencies which are frequently observed. Everyone knows this, but unless you know how to get someone to manage without sel…
Is self-interested management really an inefficiency if it’s unavoidable? You don’t get to run a company in a vacuum. You have to run it within the bounds of human behavior. Saying that “if only all humans acted in some way against their nature, then the system would be more efficient” isn’t an effective management strategy.
You can play semantic games about whether or not it should be called inefficiency -- I don't really care what you call it -- but the RfR / Dilbert dynamic is very real and very prevalent.