Why is working harder such a popular management strategy?

The short answer: Working harder gives a short-term performance boost, but leads to a long-term decline in capability.

Organizations that commit to working smarter pay a short-term dip in output, but in the long-term enter into a virtuous cycle: improvement reduces effort for the same results, which is re-invested in further improvement.

Unfortunately, the opposite, vicious cycle is far more common. A decision to cut costs leads to working harder, which leads to a short-term performance boost with an unseen (delayed) trade-off. The decision-maker thinks "I got it right", feels vindicated, and applies linear thinking: more of the same should lead to further gains. This is wrong, but the bad effects -- losses in quality, capability, etc. --  are not be felt for some time. Meanwhile, committing to work "harder, not smarter" crowds out learning and process improvement.

Reference: Repenning and Sternan, Nobody ever gets credit for fixing problems that never happened [pdf]