The problem isn't hierarchy, it is how managers are thinking it gives them power over their subordinates (it does not), that they are better than their team because they have been promoted (they are not), and it is how subordinates are getting lazy pushing all important problems for the manager to decide because he is best person to make the decision (he is not).

The solution isn't easy but it starts with managers understanding how to work WITH their employees rather than how to direct them.

I have noticed a lot of managers treating their team as manager's personal resource to offload work to. The manager is the one attending all important meetings, discussing solutions with others. The manager thinks he is smart because he is the only person that understands the big picture when in fact he is responsible for this situation by restricting the flow of information to their team and by degrading their motivation so they aren't even trying.

People getting lazy does not mean they don't have potential -- they just might not be motivated to do better. Actually, in my experience, most people want to do good work and are capable to do so as long as they have been hired into right position. But they might not be getting rewarded for what they think is good work (even with something as simple as a kind word). Or they might not know what good work is (because nobody put effort into explaining it). Or they might not be getting work that sufficiently challenges them. Or they might feel they are not being trusted by their team, boss or the rest of organisation (which happens very easily when everything needs to be approved by their boss).

Much better model I have is that of gardener -- be vigilant about what your employees are doing, make sure they have everything they need to be productive, make sure you understand how they are staying motivated, take a close look and try to understand when something isn't working well but otherwise do not position yourself in the flow of work and let people grow and do their thing.

You can't build the above without trust. Trust is the first thing you need to work on.

You also probably need to hire people for their values rather than their knowledge. It is hard or impossible to build trust when people have different value systems.