Intrinsic motivation, bureaucracy and the benefit of simple rules
There should be a optimal balance between rules and discretion. As described , in a big org , rules are necessary. But the success will depend on how the workforce follow the rules understanding the spirit behind them...
Reading this I thought there may be a "rules cycle" in organizations. Most organizations start with no rules, relying on discretion.
Discretion does not scale and relies on specific people -> implement simple rules
Simple rules are imperfect and vulnerable to Goodharting -> implement more and more complex rules
Rules become too many and too rigid -> discretion is needed again to scale back rules and revitalise the org
It sounds like the theory in linguistics about languages cycling between different morphologies (isolating, agglutinating and inflectional).