Sigurd Rinde says that organisational hierarchies in practice gets in the way of service. They breed inefficiency; you're left with the idea that the company (read brand) is stupid; fear of the boss fear is more important than pleasing a customer.
Jack Vinson comments: Isn't it funny that the people in the hierarchy believe they are enforcing efficiency (in their sphere of influence) and they end up creating less efficiency for the organization as a whole -- particularly at the customer-facing end that this story addresses.
They also degrade peoples' ability to be effective.