As a regional manager, Michael has learned that it is important, but difficult to keep his staff happy. Jim on the other hand, would rather take an approach that he views as different and better. In his inclination to believe in the superiority of his ideas, Jim managed to completely upset the employees, and to create more unproductivity. Unfortunately, Jim has not learned anything from the times that he was left in charge resulting in the entire branch becoming intensely irritated at him, as evidenced in the "Survivorman" and "Night Out" episdoes.
As expected, Jim's attempts at management put him at odds with Michael, leading to Michael jealously referring to himself as "senior co-manager". It is in their continuing petty conflict, that their collective intelligence decreases to the point that Michael himself as an individual is, amazingly, smarter than the two of them put together. As foolish as Michael can be, even he was able to easily predict the employees turning against Jim for a proposal that could only look good behind closed doors to just one person.
This demoralization is only worsened by Dwight's attempts to ally the rest of the employees against Jim. Dwight's downfall is in his transparently cartoonish behaviours, that only come off as slimy and selfish to create more despair in the office, while the co-managers have retreated to Jim's new prison cell. After the amateurish pro and con list, the polarizing speech, the insulting bean counting, and the cowardly closed door confinement, Jim is left with little option than to reconcile with Michael.
While I'm glad that The Office is on, I think it may have been better for it to have completely finished after last season. The wedding & baby part could be good though.
I do understand what you mean -- sometimes having a finite number of shows allows the writers to kind of give a full arc and all. But I'd still rather have a sometimes-recycling-ideas Office on the air over a lot of crap that makes it to TV screens. I'd take a bad episide of The Office over the best-ever episode of Gary Unmarried anytime!