In this stage of decay, the company conducts witch hunts to find out who did wrong rather than trying to discover what went wrong and how to fix it. Cost reductions take precedence over efforts to increase revenues. The reason for this behavior seems to be that it's easier to see how cutting costs improves the bottom line. Back-stabbing and corporate infighting rule at this stage. Executives fight to protect their turf, isolating themselves from their fellow executives and demonizing their customers.
Petty jealousies reign supreme.
If the organization did not die during the previous stage, it becomes bureaucratized either because it is politically protected or because it survives in a regulated environment. The critical factor for its survival is not how it satisfies its customers, but how it satisfies those that grant its resources and control the predictability of its behavior. The organization's procedure manuals thicken, paperwork abounds, and rules and policies choke innovation and creativity. There are systems for everything. Employees play by the book.