Should employees be allowed to make the contribution they want to make, or should businesses still tell them if they need them to do something differently?

Should employees be allowed to make the contribution they want to make, or should businesses still tell them if they need them to do something differently? We had to let a manager go recently because they were failing massively in their role. Over a period of 6-9 months they had received a lot of constructive feedback - genuinely constructive - about what we needed them to do instead to be successful for their team and for the business. It always fell on completely deaf ears - it would be acknowledged, and then ignored. Through the final process it became very clear that the manager just thought the organisation was wrong and believed they knew better, but none of the numbers supported this and nor did evidence of a struggling team.

Recently I have seen posts about how a decent employer lets their team leaders make the contribution they want to make, and how dreadful employers tell them what to do. Am I stuck in the dark ages, or is it really now expected that we allow employees to make their own contribution? I can see this working if the employee is performing brilliantly - then you can make allowances to smooth out a couple of kinks - but I'm not sure how it works with obvious, demonstrable failure. I am a little stuck with this one and would really appreciate a wider view. I am genuinely worried that I am missing something.