I work as a research/analytical chemistry type person, and as is the nature of laboratory jobs things are pretty casual. I have a somewhat more senior position and those of us in my position and above usually dress decent but yet casual - something that maybe you would wear to dinner or out on a date). The more entry level techs usually are still in the college mindset and wear jeans, athletic shoes, and graphic t-shirts most days. Personally I wear jeans most of the time, but I do attempt to wear decent shirts. Quite often I'll wear dress shirts untucked with the sleeves rolled up or a polo shirt, but I practically never ever wear just t-shirts. Except for Friday where we do not have "casual Friday" since everyday is casual, but people do dress even more casually (within reasonable limits). When we have clients that will be visiting my group, I do put on the khaki pants and tuck in my shirt but that is the extent of it. In this field nobody wears a suit unless it is for an interview or some major business deal, and you sure as heck don't wear the suit jacket in the lab under a lab-coat.
Anyhow, to touch on the OP's original message I too think it is pretty retarded that management thinks they can fix the problems with a change in the dress code. I do feel, however, that a well-dressed employee (and management) does give off a certain degree of competence and professionalism and certain business should adopt dress codes to reflect that. However, in this case it seems to be that management thinks this is a solution to a fundamental problem, which is - frankly speaking - very boneheaded and Dilbert-esque.