The idea that top-down organizations are oppressive and damaging, and that workers should be given more decision-making power is well-known to managers.
To involve as many employees as possible in the decision-making process, management forms lots of teams and committees, comprised of a variety of workers.
Thus, before a CEO makes any decision, the issue makes its way through each layer of management hierarchy. At each level the issue is vetted by a committee.
Each committee resolves the issue by reaching consensus (lowest common denominator).
As the issue bubbles up through the hierarchy the opinions and ideas become more and more watered-down. By the time it reaches the CEO there is little innovation or diversity left.
Paradoxically, in trying to make the decision-making process as inclusive as possible, companies actually make top executives more — not less — insulated from the real opinions of the workers.
Layers of management, coupled with a “can’t we all get along” (consensus) attitude is a recipe for poor decision-making at the top.
— Extracted from The Wisdom of Crowds by James Suroweicki
Here is a related blog: Consensus versus Collective Decision-Making