Toto Wolff says Mercedes were wrong to censure Lewis Hamilton after he ignored team orders during the Abu Dhabi Grand Prix.
Hamilton, leading the final race of the season and seeking to damage the title chances of team-mate Nico Rosberg, refused to increase his speed when requested to over the team radio in the closing laps at Yas Marina Circuit.
Wolff suggested the Englishman could be disciplined due to concerns about the threat of "anarchy" disrupting the Mercedes team dynamic.
But the motorsport chief, having seen Rosberg sensationally retire just five days after claiming the world championship, has since mellowed on the subject of his remaining star driver's apparent insubordination.
"In the heat of the moment, sometimes when you make decisions you get them wrong," Wolff told Sky Sports F1.
"In our mind, the way we think, this race is giving us the same number of points as other races and we try to win that one, not considering that there was much more at stake for the drivers.
"How the race panned out, we should have communicated differently and in hindsight let them race in the way they deemed to be appropriate."
Wolff dismissed suggestions Hamilton could have the final say on who will replace Rosberg to become his new team-mate next season.
But the Austrian did reiterate the importance of the three-time world champion, who is now the Silver Arrows' undisputed number one.
"It is like many other employees," Wolff said.
"We will give Lewis the information once we've come to a point where we think it's a sensible decision and then inform him.
"He has been a great pillar in the team's success.
"When he came, everything changed, so he has played a role.
"It's very important to keep him in a good place. The dynamics between the two drivers is one of the factors we will consider."