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What is an Organization Chart and How it Can Help You

 Organizational charts (org chart) are diagrams that graphically display an employee’s hierarchy relative to other individuals within the company. Basically, an org chart shows the senior manager (owner, CEO, or Department lead), the managers below them in sections of the company, and then the employees listed in the sections. For example, an assistant director will invariably fall directly below a director on the chart, indicating that the former reports to the latter. 

Organizational charts use simple symbols such as lines, squares, and circles to connect different job titles that relate to each other. 

What Should an Organizational Chart Show?

An org chart should be an easy-to-understand chart that allows a new employee, in any position, to be able to access and understand where their position is compared to their immediate coworkers, who is their boss, and who they are the boss of (if that applies).

In a small business, this is important because it shows not only how many employees you currently have but also can display where you may need another employee, where you may have too many, as well as if you need to reorganize your team.

Another benefit of having an Org chart it can depict if your company has a silo. Organizational silos describe when the organizational structure of the business has departments or divisions that become too separated and begin to act independently. This results in these organizational silos beginning to act in the interest of their section of the business, in turn, the departments will not help the other departments or even begin to compete against one another.

Different types of org charts (indicated with a picture)

  • Hierarchical Org structure

    • Pros
      • Better defines levels of authority and responsibility.
    • Cons
      • Can create a siloing.
      • Can cause employees to act in the interest of the department instead of the company as a whole.
  • Functional Org structure

    • Pros
      • Allows employees to focus on their role
      • Encourages specialization
    • Cons
      • Can create silos within an organization
  • Horizontal or Flat Org structure

    • Pros
      • Improves coordination and speed of implementing new ideas  
    • Cons
      • Can produce employees with more generalized skills and knowledge
  • Divisional Org structures (market-based, product-based, geographic)

    • Pros
      • Helps large companies stay flexible
    • Cons
      • Promotes independence, autonomy, and a customized approach
      • This can result in a company competing with itself
  • Matrix Org structure

    • Pros
      • Allows supervisors to easily choose individuals by the needs of a project
      • Encourages employees to use their skills in various capacities aside from their original roles
    • Cons
      • Encourages employees to use their skills in various capacities aside from their original roles
  • Team-based Org structure

    • Pros
      • Increases productivity, performance, and transparency by breaking down silo mentality
      • Promotes a growth mindset
    • Cons
      • Goes against many companies’ natural inclination toward a purely hierarchical structure
      • Might make promotional paths less clear for employee
  • Network Org structure

    • Pros
      • Visualizes the complex web of onsite and offsite relationships in companies
      • Helps employees and stakeholders understand workflows and processes
    • Cons
      • Can quickly become overly complex when dealing with lots of offsite processes
      • This can make it more difficult for employees to know who has the final say. 

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