Self organizing teams?

I believe much in personal freedom and responsibilty. From kids to old people, I think it's best if everyone can do stuff the way they want them done. Then there are of course rules which states if the ways are legal or appropriated. But the concept of being responsible for how you carry out a task should be very much up to you. I think most people work better then.

So, this is self organizing teams in for example Scrum: you get an objective and you are free to meet that objective they way you feel fit, following the standards for how things in general are done. So, if the guidelines states TDD, you can carry out the tasks any way you want, given you work test driven. Just an example.

What I've found, though, is that some believe that self organizing means setting your own objectives. I've heard management people complaining that self organizing stuff means the guys just do what they want and I've heard developers complain about objectives given because they are self organizing.

So, just as in the American legal system which separates setting the rules from implementation, this must be clear to everyone:

1. The company sets the standard - which are the basic rules for how things in general are done. Going lean and using TDD is a strategic decision and it's not up to the developer or a single user to decide if that is good or not. And like with legaslation, some rules are set by the highest authority (state<-->company leaders) and some rules are set in the municipal (city<-->team), because some rules needs to be applied on the organization as whole and some rules just applies to a small unit.
   
2. The product owner sets the current objectives for the coming sprint. And this should be read as "Do this, and I don't care how you do it" and the product owner shouldn't have to add "as long as you follow the guidelines/laws/rules".
   
3. The developers should work to carry out the objectives given by the product owner. As long as the objectives set by the product owner are met and the guidelines are followed they can work lying on the floor for all I care.
   

I see this as a contract between these three groups and once the contract has been breached, hell can break loose. The developer's don't like the objectives given by the PO, so they start developing what they think is best. The product owner think he/she knows how things should be made so he/she start pestering folks. And management start changing the objectives. The scrum horror show.