In business, organizational silos refer to business divisions that operate independently and avoid sharing information. It also refers to companies whose departments have silo system applications, where information cannot be shared due to system limitations. A silo mentality can occur when a team or department shares common tasks, but derives its power and status from its group. They're less likely to share resources or ideas with other groups or to accept suggestions on how they could improve.
Collaboration in a company culture with silos between teams or departments will be limited, unless collaboration benefits department members. In addition, members of a silo tend to think alike. They derive their power from partnership with their shared role and technical knowledge. Working in silos is often the result of an isolated organizational culture that doesn't provide opportunities for collaboration or encourage employees to accept a unified goal.
While silos hinder communication and collaboration, both of which are fundamental to delivering smooth customer experiences and producing products that work properly, the root of the problem is that many managers don't detect these silos when they're formulated before their own eyes. In smaller start-ups, organizational silos can be fatal to the company, as internal struggles over resources consume energy that is better spent on succeeding, and silos can even destroy the company if left unchecked.