The style of management he recommends works well for companies in the size scale of 30-100 people. I believe it breaks down after that, and, ironically, as you grow to a few hundred and into the thousands, you actually have to shift back to more of a command/control structure or you risk evolving into a bureaucratic entitlement kind of organization. You still need to know how to trust and delegate, but you (and by extension your now necessary mid-level managers) also need to be able to shut down the endless bike-shedding (which has now morphed into full-on ego flame wars) and make executive decisions to prune the tree of possibility and keep things moving along productively.

I think Google is a good example of a company that is (later than most) realizing the academic model only scales up to a certain point. They now seem to be moving towards a much more traditional Cpt Picard/Steve Jobs-run type of organization, from what I've gleaned.