What is an organizational chart? As the name suggests, an organizational chart, also known as an organogram or organigram, is a visual representation of the team members and the relationship between them. It depicts an organization’s structure in the form of a pictorial chart for a clearer understanding.
It entails the roles and responsibilities of individuals and their affiliation with the entity. Any organization with more than a dozen employees will need an organizational chart to showcase the structure of an organization and every individual’s ranks.
Although quite popular, it’s often tucked away in the alcoves of your storage department. Representing roles, relationships, levels of authority, and the individuals filling those positions; org charts serve multiple purposes.
Throughout history —- from Romans to Egyptians, people have used organizational charts to illustrate the hierarchy of the community, family, or any other setup. With the passage of time, the level of detail has increased, but the problem with outdated org charts is that it presupposes that individuals hold one role or work with one boss, but these are semi-permanent states.
Today, the companies have less formal structures and hierarchies with more dynamic roles and cross-functional teams. Therefore, it becomes all the more important to have organizational charts for structural clarity.
The leadership roles in these organizations are not static and are earned based on performance, expertise, and dedication. In such a scenario, companies need highly functional organization charts that are constantly tweaked as per company dynamics.
Importance of Organization Chart
A graphical representation of the organization’s work processes and structure affects several other factors of business performance, including:
1.Reporting
Organizational charts create a roadmap of work processes and the interrelationship of individuals, thus ensuring information is shared with the right individual. It also provides a clear picture of who is reporting to whom, and thus the employees are quite clear about the reporting authorities. A clear and well-defined chain improves the communication process allowing the message to circulate efficiently.
2.Goal Alignment
To succeed as a team, it is important that each member is equally invested in the company’s mission. Organizational structure streamlines the efforts of each team member and directs it towards a unified goal.
When the roles and work responsibilities are clearly defined, business goals are set according to the OKR model.
3.Growth
Growth is inevitable for any company, and when businesses evolve, restructuring is foreseeable in many situations. Some employees can be shifted from one team to another, depending on their skills and expertise. To keep track of such changes, companies require dynamic and updated organizational charts.
4.Improve Work Efficiency
Due to the visual representation, it is easier to identify and monitor the performance of each team member. Therefore, team leads and supervisors can easily recognize the bottlenecks in the workflow. This helps you keep a backup in case of emergencies and systematic breakups while letting you plan efficiently.
Types of Organizational Charts
Depending on your needs and organization types, you may set the format of your organizational chart. The most common types are:
Hierarchal
It is the most preferred and conventional chart type with a level that’s based on the hierarchy setup. A single entity or person is at the top while the rest of the team is ranked as per the authority level. In a hierarchal setup, individuals communicate only with people they directly report to.
Matrix
This type of chart works for an organization in which team members report to more than one manager. It overcomes the limitations of hierarchal charts and successfully depicts cross-functional work relationships.
Flat
It is also called a horizontal chart, designed for companies that have zero mid-level management. These types of organizational charts work well for small or medium-sized companies where employees work in a cluster form, and they are responsible for their own actions.
Network
A network structure is highly decentralized in which managers regulate internal and external communications. They may span over different geographical boundaries and organizational strata. For instance, a T-shirt company may have expertise in textile designing, but through its network, the company can align with manufacturing and distribution.
Divisional
It is a type of organizational structure in which the functions of an organization are grouped together to form a division. Each division contains all the necessary resources and support structures for smooth functionality. Typically, multinational and big organizations have a divisional structure.
Line Organizational
It is the simplest organizational structure in which authority flows from top to bottom but comprises self-contained departments. The structure allows the line manager to make independent decisions but propagate effective communication for stability.
Team-based
The organization is based on different teams working towards a unified goal but with individualized tasks. It is less hierarchical with more flexibility to offer; thus, promoting problem-solving, decision-making, and collaborative work practices.
How to draw an org chart
Are you planning to design an organizational chart for your company but are clueless about it? Then, here we have some useful tips for you:
Practical Tips for Developing an Organizational Chart
- Keep it concise
- If drawing a hybrid chart, form groups and relate them carefully
- Format the entire chart at all levels
- Use sidebars to contain notes
- Place the name, title, and job description in sequence
- Use solid and dotted lines to differentiate the workflow or interrelationships
- In soft copies, the ones on your computer can also contain hyperlinks
- Individuals with the same ranks should be placed at the same levels
5 Easy Steps to Create an Organizational Chart
Here are five general steps you can follow to create an org chart for your company:
Step: 1 Selecting Key Personnel
The very first step to designing an organizational chart is to determine the staff members you want to include in the chart.
Step: 2 Setting the Senior Management Team
Once you have identified key personnel, you need to set the higher-level management. These include sponsors, clients, and experts to decide the funding, business needs, and advice.
Step: 3 Choosing Project Coordinators
The senior management then hires or selects project managers who will be responsible for running a project.
Step: 4 Identify Stakeholders
An org chart, designed to measure the progress of a project, needs to entail the key stakeholders who can affect the performance. However, they are not key decision-makers or part of the organization but contribute towards project development.
Step: 5 Designing the Organizational Chart
Once you’ve decided on the members, it is time to depict through a graphical illustration, such as an organization chart. It requires:
- Selecting the type of org chart
- Categorizing and color-coding job roles and responsibilities
- Using tools to create an organizational chart
Conclusion
This comprehensive guide is aimed at explaining the types of organizational charts, their purposes, and their importance for any business organization. Our basic tips will also help you get started with creating your own organizational charts to depict company structure and workflow. But before you venture upon it, it’s advisable to set the scope, gather all the relevant information, and determine the platform.
Author Bio: Chiraag George is a communication specialist at Creately, a visual workspace for team collaboration. He is a marketing junkie that is fascinated by how brands occupy consumer mind space. A lover of all things tech, he writes a lot about the intersection of technology, branding, and culture at large.
Ayesha completed her Doctor of Philosophy in Biochemistry and started her career as a College Lecturer in 2013. Today, she’s a happy mom of 2 Kids in the field of digital marketing. She loves reading books, spending time with her family, and making delicious food for her husband.
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