The Peter Principle is a business theory originally conceived of by Professor Laurence J. Peter (for whom it was named after.) It has to do with the structure of hierarchical organizations, and states that people who are competent at their jobs will be continually promoted to higher and better-paid positions, slowly making their way up the corporate ladder until they arrive at the point where they can excel no further. They have reached the limits of their potential, no matter what it is, and will likely stay at that job for the remainder of their lives.
What this basically means is that everyone at their job is incompetent at what they do. The skills which previously allowed the person to succeed are often no longer pertinent to their new position (such as middle-management), and to make up for this fact they tend to stomp around the office and yell at underlings, hoping that no one will notice. Unfortunately, there is no real solution for this. You can establish an elaborate caste system in which everyone stays in their chosen field, but all this really does is set up corporate fiefdoms. To put it simply, the business world is screwed.