In this guide, we will provide you with everything you need to know about organizational charts, including their history, types of charts, benefits, and best practices for creating and using them effectively. Whether you are an entrepreneur, a manager, or an HR professional, this guide will help you gain a deeper understanding of organizational charts and how to leverage them to promote a more productive and efficient workplace. So let’s dive in!

What is an Org Chart? 

An organizational chart (also known as an org chart) is a visual representation of a company’s structure that shows the roles and reporting relationships of employees within the organization. It is an important tool for businesses, as it helps employees understand their roles and responsibilities, and it can also help managers make decisions about hiring, promotions, and departmental reorganization. In this guide, we’ll cover everything you need to know about org charts.

What are the Different Types of Org Charts? 

Hierarchical Org Chart

A hierarchical org chart is the most traditional type of org chart. It shows the company’s reporting structure, with the CEO or president at the top, followed by the executive team, managers, and employees. Each employee is represented by a box, with lines connecting the boxes to show the reporting relationships.

Matrix Org Chart

A matrix org chart is used in organizations where employees report to more than one manager or team. It shows both the functional reporting structure (to who employees report for their day-to-day work) and the project reporting structure (to who employees report for specific projects). This allows for more collaboration across different departments and better coordination of resources.

While matrix org charts are flexible and can show how work is actually done in the organization, they can be overly complex.

Flat Org Chart

In a flat org chart, there are few levels of management between employees and executives. This structure is often used in startups or smaller companies where decision-making needs to be more flexible.

Flat org charts promote collaboration and can be more efficient than hierarchical org charts. But they can be difficult to manage as the organization grows.

Divisional Org Chart

In a divisional org chart, the company is organized into different divisions or departments based on product lines, regions, or markets. Each division has its own set of functions and management structure.

Team-Based Org Chart

In a team-based org chart, the organization is structured around teams that are responsible for specific projects or functions. This structure allows for more collaboration and cross-functional communication.

Circular Org Chart

In a circular org chart, there is no clear top or bottom level of management. Instead, all employees have an equal say in decision-making, and leadership is shared among the team.

Cross-Functional Org Chart

In a cross-functional org chart, employees are grouped by function, but they also work together on cross-functional teams. This structure allows for more collaboration and a focus on achieving shared goals.

How to Create an Org Chart? 

Determine the Purpose

The first step in creating an org chart is to determine its purpose. Consider the audience and the information they need to see when using org charts to communicate the organizational structure.

Identify the Key Positions

Identify the key positions within the organization, including managers, executives, and staff. You can also group positions by department or function.

Determine the Hierarchy

Once you have identified the key positions, you need to determine their hierarchy. This means deciding who reports to whom and the chain of command.

Choose a Format

There are several different formats you can use for an org chart, including hierarchical, matrix, flat, team-based, and divisional. Choose a format that best fits your organization’s structure.

Use Shapes and Colors

Use shapes and colors to differentiate between positions, departments, or levels of management. This can help make the org chart easier to read and understand.

Include Key Information

Each position on the org chart should include key information such as the job title, name of the person in the role, and any direct reports.

Update the Chart Regularly

The organization should update the org chart to reflect any structural changes as it evolves.

Share the Chart

Org charts are useful tools for communicating the organizational structure to employees, stakeholders, and customers. Share the chart in a way that is easily accessible and understandable.

Use Org Chart Software

Consider using org chart software to create your org chart. This can save time and make it easier to update the chart as the organization changes.

Tips for Creating an Effective Org Chart

Here are some tips for creating an org chart that is effective and easy to understand:

  • Keep it simple: Don’t include too much information or too many levels of management.
  • Use standard shapes (rectangles for employees, diamonds for managers, etc.) and colors (green for departments, blue for executives, etc.) to make the chart easy to understand.
  • Including photos of employees can make the chart more engaging and help employees put names to faces.
  • Update it regularly: The organization should update the org charts regularly to reflect changes in its structure.

Reasons Why HRs Love Org Charts

Clear Work Responsibilities 

One of the primary functions of an org chart is to allocate work responsibilities. This allows HR to use the org chart for job descriptions in the hiring process and even appraisals. 

Clarify Work Relationships

An important function of the org chart is to clarify the roles and reporting relationships between levels. In complex organizations where a single executive may be reporting to multiple managers, an org chart can be an invaluable tool.

An Information Repository 

Org charts don’t just need to be designations within hierarchies, they can also include information about the responsibilities of each role. With additional information, the org chart may not be as scannable but it can provide key information to new hires being onboarded and even established employees who are looking to navigate a new department. 

What Can’t People Find or Add to an Org Chart?

Easily Gets Out of Date

With attrition organizational charts can get out of date quickly, more so in larger companies. Which is why using an org chart software is key to keep a fully functional org chart up to date. 

Informal Relationships in Org Charts

Informal Relationships 

An org chart only shows formal relationships in a business. But what about a line manager who is really good friends with the VP of HR and can be a force of change despite not having direct authority? These informal social relationships are missing from an org chart. And these are a vital part of every business and can be a key component of effective communication

Management Style

An org chart only shows who can exercise authority over others, not how they do so. Management styles can make or break the productivity and profitability of a business. But unfortunately, an org chart is not able to express management styles in any form. 

Conclusion to Org Charts

In conclusion, organizational charts are a crucial tool for understanding the structure and hierarchy of an organization. They provide a visual representation of departments, teams, and reporting lines, making it easier to identify roles, responsibilities, and communication pathways.

With employee management software like AttendanceBot, businesses can create org charts that are up to date with any organizational changes.