Since an acquisition at a company I used to work for full-time and remained on call as a contractor with for some time after, I have seen this happen in a very impressive way.
Critical tech debt has gone unpaid as site performance degrades to the point of outages, but the new staff don't seem to know how to do anything except throw more hardware at the problem.
Meanwhile, a few weeks ago, I got an inquiry from them about "administrator passwords" for a list of a dozen or so programs in use on their developer machines, including 7-zip and Notepad++.
There were around a dozen items and all of them but some IDEs were completely open-source software. All of them were only deployed and run locally, with no administrative passwords or commercial licensing purchased. This inquiry came many months after I had left, including an extensive and agonizing knowledge transfer process.
There's no way the person asking me was such an idiot that he didn't realize that Notepad++ has no administrative passwords. But he asked me anyway. I can only assume this is because some wrathful idiot asked him to do this, and he knew that performing the ceremony of asking me as he was directed to do would be easier to deal with than just answering the inquiry directly with the parts he knew himself.
Once you have somebody generating fake work like that at the top, where can things possibly go other than down?