The fact that we all recognize dilbert cartoons as essentially true, despite their obvious preposterousness suggests that there is some essential factor (which I will call the Dilbert factor) that corrodes organizations regardless of the purposes of their original founders. This page is my personal analysis of this factor.
A person (Bill Gates) has an idea and, unable to bring it into existence single-handed, creates an organization to do so. If the idea is a good one, and everything else is right, the organization becomes large. Herman Hollerith did the same thing a century ago, and IBM became one of the largest organizations in the world. Then the Dilbert factor almost destroyed the company. Eventually, an outsider (Gerstner) had to be brought in as CEO. Several pieces of the company still shrank almost to nothing, but the new CEO was able to rescue several other large pieces. Still, the company is a shadow of its former self.
I think the following happened. IBM achieved its success through many factors, one of which was that it recognized more clearly than any of its competitors that although the equipment it sold was high-tech, its customers were not interested in technical specifications but in getting business problems solved. To stress that it was selling business solutions, not technical marvels, IBM insisted that every IBM employee who met a customer should be dressed in business attire, even if he was a repairman.
Once the success of this policy was demonstrated, almost every manager within IBM became a believer in it. They based promotion decisions partly on how well an employee embraced this policy. Employees recognized this, and began to study how to stay safely within the limits. But safely within the limits means nowhere near the edge, so those employees whose dress was within, but near the edge of, the limits became judged as "OK, but" and not promoted. The limits steadily shrank. Each new generation of managers had grown up demonstrating greater enthusiasm for tighter limits, and so the whole situation became sillier and sillier, but anyone who pointed this out would never be promoted.
There is a similar situation in biology, most easily described in peacocks, but applying to every species. Peahens 'want' their offspring to be successful, so they try to mate with a peacock they 'think' has genes that will make successful offspring. An offspring will be more successful if it avoids being eaten. The peahen herself avoided being eaten partly by being camouflaged and partly by running away whenever she was spotted, but she would 'like to know' that she had mated with a peacock who has plenty of ability to run away. The best way of 'knowing' this would be to find a peacock who is not camouflaged, and has had to run despite a handicap. The peacock's tail is perfect for demonstrating these qualities. But once all peahens start judging peacocks by their tails, a problem emerges. Let us envisage a time at which all peacocks have tails between four and five inches. All peahens prefer the five-inchers. No peahen knows whether her own genes code for close to four, or close to five, because these genes are not expressed in the female. Not only does she 'want' her sons to survive, she 'wants' them to be chosen by the next generation of peahens, so she 'wants' them to have at least five inch tails. The best way to accomplish this would be to find a peacock with a six inch tail. So tails get longer and longer, peacocks become easier and easier for predators to catch and eat, and there is a real possibility that the species will become extinct through its own internal competition.
As IBM's personnel policies became more and more rigid, the world was changing, but all IBM senior managers had been chosen for their loyalty to the tried and true principles of the company. Any junior executive who questioned them was doomed. The company nearly died.
This does not only apply to businesses. Perhaps the supreme example is the Roman Catholic Church, simply because it has been around longest. I once read a book describing the Roman Catholic Church as a struggle between saints and cardinals. (I would love to refind this book.) The cardinals were the guardians of orthodoxy, the saints broke new ground. The cardinals often burned the saints for heresy, then the saint's ideas became accepted and the next generation of cardinals beatified the ex-heretic (while burning the next future saint). Saint Joan is the best-known example of this habit.
One reason the Soviet Union only lasted seventy years, and the United States has already lasted over three times as long, is that the Soviet Union was in the grip of the same forces as IBM - indeed it became rigid much more quickly. Since governments have more power to do damage than companies do, their stupidities are much more messy. The U.S. government can be just as rigid and wasteful as the Soviet government was, but it does less damage simply because it does not direct all activities in the country. Of course, as the Dilbert factor eats away at the effectiveness of the US government, it becomes ever more costly to do the things it used to do. It tries to disguise this by taking on additional functions, then claiming that the increasing cost is a necessary price for the new functions. (By the way, it is noteworthy that fourscore and seven years after the founding of the US, Abraham Lincoln was concerned the country might not survive - just about the length of time the USSR did survive.)