What is an Organizational Chart?
An organizational chart (org chart) is a visual representation of the structure of workers within an organization. Boxes or other shapes represent each employee, along with labels for their titles and names. Lines between boxes represent their relationships to each other. The layout of the graphics on the page demonstrates hierarchical relationships, to demonstrate who reports to whom, who’s on the same level, and who is ultimately responsible for a product or set of duties. An org chart is a great way to organize information so that people can quickly see the relationship between people in an organization.
While most org charts are hierarchical in structure, are other types of org chart structures that exist, to suit alternative company structures.
The three main types of org chart structures are called hierarchical, flat, and matrix. Which one is best for an organization varies based on its size and the type of work the organization does.
Hierarchical Org Charts
Hierarchical org charts are most commonly used. This type of org chart is best when there are multiple levels of power. The person with the most power, such as the CEO, is at the very top. Beneath them comes the executive team. Beneath them come middle management, and so forth in descending levels of power to the very bottom. The number of levels in the hierarchical chart depends on the size and complexity of the organization and its structure. This type of chart is also called a line chart, and is often used to depict the structure in military organizations, such as two colonels sitting below a general.
Flat Org Charts
Otherwise known as horizontal org charts, this type of org chart is best for organizations that don’t have a lot of middle management, or where the company is owned by a group of partners. Think: a small business, startup, or a law firm. While there are some layers between upper management and interns, it tends to be only one or two. In this kind of organization, individual workers often wear multiple hats and have greater deals of ownership when it comes to decision making.
Matrix Org Charts
In some organizations and roles, individuals work across different teams and managers. For this type of set up, a matrix organizational chart is useful, because it’s better at allowing for multiple relationships. For instance, you might have a CEO and a General Manager in the top two slots. Beneath that you would have the various managers, such as a Project Director, Sales Director, Operations Manager, Product Director, Creative Director, and Engineering Director. Beneath the Project Director would be a list of projects. Laterally, the chart lists people who are working on that project beneath the person who’s managing them for that project. This way, someone who might work across several teams would show up in every place on the chart where they’re relevant.
An org chart is an essential tool for any organization. It identifies what jobs people do, and sometimes tells us their responsibilities, and how decisions are made within an organization. It defines how information moves between the different functions of the business, improving efficiency and providing clarity for everyone about who does what job.
Org charts can be useful in a number of different situations. For example, you might use an org chart to:
- Assist with onboarding of new employees: When someone is new, they’ll need to know not just who is on their team, but who they report to, and who they can reach out to on other teams for specific needs. It’s also helpful for keeping track of which teams own various projects and initiatives across the company.
- Strengthen social connections within teams: It’s hard to build team unity when employees don’t know who everyone else is and what their role is within the team. Org charts with photos help to introduce employees to one another, and give them talking points for starting a conversation.
- Assist with restructuring the workforce: An org chart is a simple visual reference for managers and consultants to use to spot redundancies in the workforce that can be addressed with reshuffling and hiring freezes. It can also help identify holes that can be filled with hiring initiatives.
- Assist employees with career growth: Org charts help employees understand where they stand in an organization and what positions they can aim for, what teams they can aspire to join.
- Show off teams: Public org charts, such as those on TheOrg.com, can be used to display to the world who is on a particular team at a company, in order to increase a company or team’s transparency and credibility. Companies can show off their impressive team members to potential customers.