Richard Thaler, the behavioral economist, is pretty sure this is because the incentive structure goes bad. An executive who goes for a new project with a 50/50 chance of either (a) making $3m or (b) losing $1m -- note the expected value of $2m -- expects a pat on the back, maybe a couple months' salary as bonus, in case (a), and to be fired in case (b). Naturally, the business would love to pursue all these opportunities, while any individual manager would almost never choose to pursue one.

This is a variant of the principal-agent problem.

Thaler's book is titled "Misbehaving" -- well worth listening to the audiobook if you have a commute!