Systems procedurise and standardise operations to more reliably produce results over time. System boundaries represent the best and worst operational variations an organisation is willing to tolerate.
Just as a system can reduce the operational wastage of an organisation, it can also prevent innovation and other big leaps forward.
Appropriate "give" of the boundaries is important to encourage innovation. This flexibility enables the organisation to try out new ideas. New ideas that, by definition, deviate from the system's norms.
This flexibility also increases the likelihood of unconstructive practices occurring. Disruption goes both ways. We can't have the possibility of innovation without the possibility of deterioration.