Knowledge of, and/or responsibility for, problems is often widely shared within large organisations, but it is then often the case that no-one feels responsible for addressing or even highlighting the problem. One example was the poor maintenance and terrible safety record at BP's Texas City Refinery, where an explosion in 2005 killed 15 and injured over 170 more. The problems were readily apparent to most employees and managers but - partly under pressure to save money - no-one felt responsible for doing anything about them.
Much the same was true of Bernie Madoff's Ponzi scheme where quite a few financial professionals had worked out that something fishy was going on, but saw no need to do anything more than avoid dealing with him.
And just about everyone in Westminster knew that Members of Parliament were receiving over-generous expenses payments as recompense for their low salaries, but hardly anyone saw much wrong with this ... until Heather Brooke and the Daily Telegraph published the expenses claims in 2009 - triggering immediate uproar outside Westminster, and a few prosecutions. Indeed, many MPs had previously supported an attempt to exclude their expenses claims from the Freedom of Information Act.
The diffusion of responsibility is exacerbated if there are frequent changes of management. This was part of the problem at Texas City as the over-worked men 'close to the valve' stayed put, whilst their managers generally moved on very rapidly, away from an old refinery which lacked the prestige of many of BP's other locations. Managers were not therefore in post long enough to both understand the issues and then have the time and inclination to do much about them.