Peter Drucker was on top of this. It's so obvious yet so often forgotten (ignored?). An organization is a group of people.
Jumping back to systems thinking. People can respond a number of ways in organizations. Enter 'policy refusal' (see Donella Meadows' systems literature for more). Executive wants A to happen. A is not in employees' best interest. Employees ignore, delay, obfuscate, outright refuse, or actively undermine A.
People are very good at policy refusal. Executives are good at not knowing its happening.