In rules-based organisations, there is a real tendency to add new rules to suit new situations and when things are not going according to plan. It's not, however, effective.
Rules are like scaffolding around a building – they should be used for a while to support the building of the main structure, or in specific circumstances but not as a long-term strategy. Adding scaffolding to scaffolding creates a more rickety structure, increasingly unstable and susceptible to changes in the overall environment. And for people within the organisation, more rules simply gets more and more confusing.
[Picture from Britain being overrun by street signs | Reuters]
The other problem with lots of rules is that the response is usually to try and look for opportunities to get round the rules, as however well-intentioned they may be, they get in the way of the actual work getting done. They indicate a lack of trust – that people won't do the right thing without being told exactly what to do/not to do.
So (with notable exceptions that are genuinely complicated, not complex) more rules will reduce people's engagement/morale/whatevernamewe'regivingitthisweek and will make the organisation more brittle.
The alternative? Foster a culture that is mostly ideation(based on obligation to each other in a social environment), with rules saved only for particular rare instances.