I came across a very interesting article in the Social Computing Journal that is worth a read.

One of the most important things I've learned in the last few years is that, except for senior management, no one in most organizations really understands what the business of the organizations is all about -- how decisions are made, what information is used and how, etc. And, at the same time, senior management really has no clue about what goes on at the front lines of their organization, or outside their organization -- what potential new recruits think, what customers really think about the organization, etc.

This should be obvious, if you think about it. Senior managers are insulated from the front lines and customers. No one wants to tell the boss what's wrong with the organization -- it's a career-limiting move. And senior managers are too busy to spend much quality time with either employees or customers. To the extent they interact with customers it's with the senior managers of those customers, who are likewise unenlightened about what is going on in their own organizations. So decisions are made, often, in a vacuum, based on deficient and filtered information

As for the line employees, they usually have never been exposed to or taught about what goes on in other parts of the organization, or how managers make decisions. This is getting worse: The current generation of young employees are likely to work in 12 organizations in their careers -- not enough time to really figure out "the business of the business" in any of them. The tragedy is that often neither they nor their senior managers think they need to know what the business is all about, unless and until they become senior managers themselves. So most employees spend their entire careers feeling under-appreciated, disconnected, unconsulted, and annoyed at stupid instructions and useless information requests from management. An they have a ton of very useful information about customers, operational ineffectiveness, and what's going on in the world and the marketplace, that is never solicited, and never proffered.