Symptom: Jobs are not well focused on specialties; that is, people are expected to be experts at too many things at once.
In most any discipline, it is a full-time job to keep up with the state of the art. When you ask someone to "specialize" in more than one field of expertise, they become generalists. Generalists cannot attain a depth of knowledge or keep up with the literature as well as true specialists can.
Generalists also risk conflicts of interests. For example, if one group is responsible for a certain type of computers and also for developing applications, a bias is introduced. Their applications will always end up on the same type of computer, whether that is the most appropriate type of not.
When projects require a range of specialties, the best approach is to assemble of team of the right specialists. Of course, this approach depends on teamwork. It is better to assign a project to a generalists than a set of specialists that don't work well together.
The purpose of the organization chart is to define everybody's lines of business. In a healthy organization, every individual should be able to answer the question, "What are you supposed to be world-class at?"
If Engineers' jobs are not well focused in terms of technologies or disciplines, the organization chart is at fault. It may be that groups are divided by customer or some basis other than their specialty. Or boundaries may be vague and overlapping.
In many cases, teamwork is the gating factor. Some managers believe generalists are preferable because, in their experience, high-performance teamwork is impossible. More enlightened leaders solve the problem of teamwork rather than give up on specialization and organizational performance.