If the arrangement within an organization allows this group to work together and reap the benefits without getting into a conflict then such a patronage brings out high efficiency and keeps the team motivated.
As an example a manager (a patron) grants his team member X (Client), who has used up all his leaves an additional day off since he has injured himself and is unable to get himself to work, can be a big morale booster to the team member and he reciprocates by working 12 hours the next day. So through patronage a favor was made but the organization did not lose anything.
If a strict formal system was to be followed in the above example, person X would have to get to work despite illness as there are no more leaves and this would lead to a depressed and de-motivated X, who would only complain and would also result in poor efficiency.
But a problem does arise when this patronage network, begins to operate in a mode which conflicts with the format of the organization and the essential formal system that needs to be followed.
Examples here would be biased promotions, granting unnecessary leaves to one set of people while making the other set work twice the hours etc
A manager who is morally bound to the formal system may have the urge to ban such patronage networks given he has the power to do so. But it is also essential to understand why such a network exists and try to work his way with these networks and seen how the formal system can also be amended to make it more friendly, rewarding and more accessible.
To conclude, a patronage network exists in every organization and as a manager it becomes important to understand the inherent behavior and create a more friendly formal system which encourages these networks to work in a positive mode, increasing efficiency and commitment towards its organization.