This often is a necessary condition for the overall health of the firm. The knowledge has to flow. That is critical. It needs to be ingested, digested and turned into energy by as many organizational groups and members as possible, while still maintaining levels of security. Finally, you have the problem of humans in hierarchies.
People have very sensitive egos, especially when they feel that their personal power is threatened.
The optimal structure is crippled by this phenonenon. If you can get the humans to let knowledge and information flow, you can sturcture the organization so that authority levels correspond with information security levels. Everybody, across the same level has access to the same knowledge base. If you want me to help you set something up, send me email.