The atmosphere is more congenial. Everyone can be satisfied. Compromises can occur. Administrators can apply discretion and make individualized decisions. Disadvantages exist as well.
Discrimination can occur.
People that do not really know how to work the system can get taken advantage of. Power players obviously have an advantage. There is no guarantee of openness. This is closed-door government. Administrators can abuse discretion and there is no precedential value to the decisions that are made.