That question made me think of what Joel "Joel on Software" Spolsky (who also served in the Israeli army) wrote about "The Command and Control Management Method":
"Soldiers should fear their officers more than all the dangers to which they are exposed…. Good will can never induce the common soldier to stand up to such dangers; he will only do so through fear" (Frederick the Great) [...]
The Command and Control form of management is based on military management [...]
There are, it turns out, three drawbacks with this method in a high tech team. First of all, people don’t really like it very much, least of all smarty-pants software developers, who are, actually, pretty smart and are used to thinking they know more than everyone else [...]
That leads to hostile workplace (even if not explicitly) which leads to:
- higher turnover, good people leaving first
- people spending time looking for jobs instead of working
- people trying to "game the system" and find what management cares about instead of what is good for the company. You can call it "backstabbing" of their fellow coworkers or the work process