Why Organizational Charts are Important ?

123 min 2 2

Why Organizational Charts are Important?

Operating a business or a department is no simple task. Not only do you need to set milestones and figure out how you’ll accomplish them, but you need to be able to adjust to challenges and pitfalls as they happen and steer the company back on course. It’s for these reasons that business leaders and management are always searching for effective and better ways to organize flow, and for many, the answer is the use of company organizational chart.

If you’re new to the concept and use of organizational charts you may not feel it’s necessary. We’re here to describe why organization charts are important and why it’s time you embrace them.

Make Sense of How the Company Works

At its core, a company organizational chart is meant to show how the company works. It stems from the top with upper management and flows down throughout the many departments.

Org charts work as a visualization tool, which for many can be highly effective. One quick look at the chart and you instantly see how things are connected within the company, and the chain of command is extremely clear. It doesn’t matter if employees are new or existing, this visual aid is useful and practical.

It’s Not a One-Size Solution

What many may not realize is an organizational chart isn’t a one-size-fits-all solution. This is part of what makes it so effective. There are many ways it can be customized so that it makes the most sense for that particular company.

There’s also the fact there are different types of organizational charts. Think of the term “organizational chart” as the umbrella term, with many more specific categories below it. It’s wise to research each one before landing on a choice to ensure it’s best for the company and its structure.

You may be familiar with organizational charts such as the flat organizational chart. This one is often described as a horizontal chart and is meant to show widespread workflow, decision-making, working as a team and promoting self-management. As you can imagine, it doesn’t showcase various levels of management since that’s not how the particular company operates.

Then we have the more traditional and frankly more common functional top-down organizational chart. This one shows a classic structure where there is a hierarchy in play with the CEO at the top, and all branches stemming downwards from there. Employees can look at the chart and instantly understand the chain of command, and for those with career goals they want to pursue it also shows the path upwards.

The matrix organization chart is more commonly used in businesses that prioritize collaboration between departments and employees. It looks like a grid that showcases the connections between the various departments. It can be rather confusing when you first look at it since it doesn’t follow the top-to-the-bottom structure, but upon closer look, it can be clearer.

company organizational chart

Everyone Can Have Access to the Company Organizational Chart

Another reason an organizational chart is so important is that it’s the kind of information that everyone can and should have access to. It’s not sharing top industry secrets or sensitive company data. Rather, it is a roadmap for how the company operates. It is something every department should display so that there is no confusion about how departments interconnect and the hierarchy that exists – if applicable.

Having this chart to refer to helps entry-level employees, more seasoned employees, managers and upper executives even. Typically included in the chart are the names of employees, job title, contact information, their responsibilities and the relationship between individuals. Charts go so far as to have lines drawn on them to show how people connect. It really can’t be more simple and clear.

Organizational Charts Can Highlight Weaknesses

Finally, these organizational charts can also do a good job highlighting weaknesses, and broken chains if you will. If they can be easily and quickly identified, then they can also be remedied.

Don’t Hesitate to Bring an Organizational Chart On-Board

So if you operate a business and want to improve the workflow and communication between departments and employees and make the structure clearer in general, then an organizational chart is your best tool. Just remember to make changes to it as the company grows, evolves and changes.

Organizational Chart Types

Since each form of organization chart is intended to correspond to a distinct corporate structure, it is essential to choose the style of organization chart that is most appropriate for your particular firm.

The following are the four kinds of organizational charts:

Organizing in a hierarchical fashion

Pyramidal organizational charts, which depict a conventional organizational structure, are by far the most prevalent kind. A single individual or group occupies the position at the very top. Using this framework, the organizational chart has departments (such as information technology, marketing, and operations, among others). And each employee answers to a single manager.

Divisional structure

According to product lines, geographical areas, or particular roles, this sort of organization has independent branches that have some level of autonomy over their operations.

Matrix structure

Companies that utilize this kind of organizational chart have their employees organized into teams according to the projects or products they work on. And those teams report to both a project manager and a functional manager. This results in the creation of a chart that displays the connections throughout the whole company rather than simply vertically.

Flat structure

Flat or horizontal organizational structures are most often seen in the context of smaller companies and are characterized by the presence of few or no intermediate managers between workers and executives.

Related posts

Leave a Comment