The real question is why self-preservation cannot best be obtained through functioning.

because organizations are made up of people and people are imperfect. Eventually someone is bound to screw up large enough to put an organization's survival at risk. And the natural response by other members to try and suppress knowledge to ensure survival. That of course just makes things worse.

Isn't that because there is insufficient jeopardy for covering up a mistake?

Good leaders are merciful to sins confessed and decisive towards sins discovered.

People don’t like to change and a lot of the time for institutions to continue existing they need a radical shift in their approach or outlook.