My managers, therefore quite rationally did things that maximized their apparent value in the eyes of their bosses, even if it meant that the project (and, as a result) the entire organization was hurt.

The problems described are applicable to corporations and collective action in general.

The book Moral Mazes chronicles a sociological study in the 1980s, where a sociologist spent years living with the savages of corporate bureaucracy, learning their customs, behaviors, and morals. The irrelevancy of truth, the shifting of blame, the feudal relationship to those higher up, the obligation to keep knowledge from your bosses so that they could avoid responsibility, the situational ethics totally contradicting everything they otherwise profess in life - all of it there, and fully documented in the study.

Orwell and Hayek had it right. Organizations will get predictable results depending on how knowledge, power, and responsibility are aligned despite the clear global suboptimality (read abomination) of the solution to the individuals involved. Align those things wrong, and you get Big Brother and a boot stomping a human face, forever. Align them differently, and you get the modern corporation, or government bureaucracy, or or open source and maker movements.