Of course they are subject to power dynamics. The question is whether the dysfunctions of informal power dynamics are worse than the dysfunctions of formalized power dynamics in their economic niche.
There's this false dicotomy between "freedom for people to self-organize" and "formal structures to maintain a system", where people see what pointy-haired suits do and conclude that informal orgs will naturally be better. But _something_ needs to be in place to maintain a good environment.
You see this with people talking about Toyota. So many people see Toyota and think "oh I should do kanban". But kanban isn't the thing, the processes that led Toyota to do kanban is the thing.
Similarly, the objective isn't "have a flat org chart", but "maintain an environment where a formal power structure doesn't weigh down progress for the company". That requires acknowledging the informal power structures and making sure that the players involved are willing to maintain that environment _through_ this informal power structure.
Informal power dynamics do not need to be dysfunctional, if there's a principle driving the players
It was the result of a study by several car companies and several governments to learn what made the Toyota Production System different from the Mass Production systems used in the US.
Exactly. As we all know, these people all much making much more than the upper management at Microsoft or Google, who haven't got any real personal benefit from their position.