I think the term of art you're looking for is actually "command and control structure". This exact phenomenon appeared under communist regimes as well and is not unique to capitalism.
If you're interested in a real world example of an alternative structure read up on the corporation Mondragon - it's better but even large coops are not completely immune to this problem. Modern businesses appear to have an inherent need to focus large groups of people towards a singular vision and it's quite difficult to avoid the "toddler manager" effect.