From a management perspective, you're forgetting about the obvious: the less than productive people. The benefit of giving employees no- or few-strings attached time to work on whatever is clear. Things like GMail, Apple 1, etc. The "cost" is that people are doing things that don't necessarily contribute to the bottom line -- for every GMail, there are 1,000 low-impact ideas.
When your ability to make money hand over fist starts to get challenged, it is difficult to continue giving people free reign, especially when your competitors focus on cost, cost, cost. HP was a great place that made oodles of money selling tank-like PCs (among many other things) that cost $3k. But then Dell came along, invested $0 in R&D and started cleaning HP's PC clock. Bell Labs was engineer/scientist nirvana, then the AT&T monopoly went away.
The other issue in big companies is that as people with direct connections to the business start losing control, the bureaucrats (well intentioned as they are) start moving in, and they worry about things that the engineers/etc didn't really care about. They are passionate about you using the appropriate powerpoint template, and will speak to your supervisor if you don't comply!
When your ability to make money hand over fist starts to get challenged, it is difficult to continue giving people free reign, especially when your competitors focus on cost, cost, cost. HP was a great place that made oodles of money selling tank-like PCs (among many other things) that cost $3k. But then Dell came along, invested $0 in R&D and started cleaning HP's PC clock. Bell Labs was engineer/scientist nirvana, then the AT&T monopoly went away.
The other issue in big companies is that as people with direct connections to the business start losing control, the bureaucrats (well intentioned as they are) start moving in, and they worry about things that the engineers/etc didn't really care about. They are passionate about you using the appropriate powerpoint template, and will speak to your supervisor if you don't comply!