An informal hierarchy is where one gain power through influence and manipulation (e.g. creating a fight between two other people so you're the only one who still have good relations with both of them and you're the only one getting the benefits of these relations). The problem with this is that you end up with invisible hierarchies with a lack of accountability. At some point few people understand why a project is stuck and it takes a while to unearth. God forbid that a small clique forms and finds a way to exploit failures in the oversight to drain the company for their own interest, blocking real progress within the company but with the inability to either point fingers or fire people.
Now with formal hierarchies everyone generally knows who's responsible for what, but in larger companies you can still end up with inter-divisional fights, rivalries, etc. e.g. Microsoft under Ballmer. But at least a higher up can roll their sleeves and clean up house because they have that power, e.g. Satya Nadella.
Basically, in both informal and formal hierarchies the same sorts of problems can occur, but in an informal hierarchy the phrase "you can't tell me what to do" is often times a valid response.
Now with formal hierarchies everyone generally knows who's responsible for what, but in larger companies you can still end up with inter-divisional fights, rivalries, etc. e.g. Microsoft under Ballmer. But at least a higher up can roll their sleeves and clean up house because they have that power, e.g. Satya Nadella.