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I have always loved the USMC's leadership principals, but they have a hard time adhering to them in practice. Talk to pretty much any infantry officer who saw combat in the last 15 years and they have endless stories of chaotic command arrangements.

My guess is that businesses have the same issue - it's great in theory, but the cost of failing to achieve it in practice is low at first so it creeps up over time. It takes a catastrophic event to force leadership to rearrange reporting relationships and clear up lines of communication again.