Why organizations are such a mess?

Many years ago I attended to a PhD course on Organizational Economics by Robbert Gibbons, from MIT. I still remember the title of one of his papers "Why organizations are such a mess". I found it really suggestive, because in a world of transaction costs the choice between organizations and markets is a difficult one, and Gibbons was trying to disentangle it. Later he coordinated the Handbook of Organizational Economics and contributed decisively to the development of the discipline. Last September he came back again at Universitat Pompeu Fabra and gave the annual lecture. It is an introduction to the key issues of organizational economics, highly recommended (starts at minute 12):