Introduction to Organizational Charts

An organizational chart or Structure is a diagram that shows the structure of an organization as well as the relationships and relative ranks of its positions. The term "chart" refers to a map that helps managers navigate through patterns in their employees. Charts help organize the workplace while outlining the direction of management control of subordinates. Increasingly a necessary management tool, organizational charts are particularly useful when companies reorganize, embark on a merger or acquisition, or need an easy way to visualize a large number of employees.

Sample Organizational Charts and Templates

Need to create an organizational chart of your own? For an easy solution with over 85 sample chart templates, charting software is a popular choice. Ready-made graphics and layouts help render charts quickly and easily. You can select from a variety of colors and themes. Org chart templates automatically align and arrange everything, giving you professional-looking results and a boardroom quality chart every time. A professionally designed chart, published and distributed to your organization provides a visually compelling method for communicating valuable organizational information to all employees. Download more org chart samples. Create an org chart in minutes and share with colleagues no matter where they are.

Benefits of Organizational Charts

Organization charts are an effective way to communicate organizational, employee and enterprise information. An org chart makes it easier for people to comprehend and digest large amounts of information as a visual picture rather than as a table of names and numbers. Organizational charts provide the greatest value when used as a framework for managing change and communicating current organizational structure. When fully utilized, org charts allow managers to make decisions about resources, provide a framework for managing change and communicate operational information across the organization.

Using org chart software, Human Resources professionals can create org charts automatically from HR databases and distribute them to management. Managers are then able to quickly visualize the organization and access the salary, gender and tenure information needed for decision-making purposes. Managing change becomes much easier once everyone is able to visualize the organization. Organizational charts provide managers with specific departmental information that can then be used as a baseline for planning, budgeting and workforce modeling. It's easy to collaborate on important structural and personnel decisions when you have the overall picture along with the smaller views that make up that bigger picture. Organizational charts can be linked directly to spreadsheets or budgeting tools for interactive what-if analysis, making planning and decision-making easier. Those organizational charts can then be used to provide scenarios back to executives, finance and HR for evaluation and approval. Managers may also use organizational charts to communicate and solicit feedback from their employees to build future plans. Publishing and distributing org charts to an entire organization communicates necessary and valuable organizational information to all employees. Org charts are ideal for sharing the organization's strategic vision, as well as defining responsibilities, dependencies and relationships. Good charts also allow you to organize their teams with clear responsibilities, titles and lines of authority. A clear and concise org chart is an invaluable management tool.

Workforce Planning
Workforce planning is the process of placing the right number of people with the right skills, experiences, and competencies in the right jobs at the right time. It involves asking such questions as: What is the correct org structure? Is the organization aligned with business goals? How do we weather the storm and exit prepared for growth? How do we reorganize to meet new financial objectives? Companies typically engage in annual planning, quarterly planning and ongoing planning. Workforce planning consists of four consecutive phases:

Strategy Determine the goals and objectives of the organization and what it will take to accomplish them. Workforce analysis How is the organization set up right now? Are there gaps or problem areas? Implementation of plan This could entail anything from a large re-organization or workforce reduction to promotion of a few key employees. Revision Assess what is working and not working. Adjust accordingly.

Primary workforce planning activities include Organizational Design, Reorganization, Mergers and Acquisitions and Succession Planning. These disciplines assist HR and Executive teams in determining the correct structure, shifting resources accordingly and backfilling positions when key employees leave or move.

There are a number of factors that differentiate small-business operations from large-business operations, one of which is the implementation of a formal organizational structure. Organizational structure is important for any growing company to provide guidance and clarity on specific human resources issues, such as managerial authority. Smallbusiness owners should begin thinking about a formal structure early in the growth stage of their business.

Purpose
Organizational structure provides guidance to all employees by laying out the official reporting relationships that govern the workflow of the company. A formal outline of a company's structure makes it easier to add new positions in the company, as well, providing a flexible and ready means for growth.

Significance
Without a formal organizational structure, employees may find it difficult to know who they officially report to in different situations, and it may become unclear exactly who has the final responsibility for what. Organizational structure improves operational efficiency by providing clarity to employees at all levels of a company. By paying mind to the organizational structure, departments can work more like well-oiled machines, focusing time and energy on productive tasks. A thoroughly outlined structure can also provide a roadmap for internal promotions, allowing companies to create solid employee advancement tracks for entry-level workers.

Flat Organizational Structure

There are relatively few layers of management in what is termed a flat organizational structure. In a flat structure, frontline employees are empowered to make a range of decisions on their own. Information flows from the top down and from the bottom up in a flat structure, meaning communication flows from top-level management to front-line employees and from front-line employees back to top management.

Tall Organizational Structure

There are numerous layers of management in a tall organizational structure, and often inefficient bureaucracies. In a tall structure, managers make most operational decisions, and authority must be gained from several layers up before taking action. Information flows are generally one-way in a tall structure from the top down.

Considerations
It is common for small businesses to lack a solid organizational structure. All employees in startup companies can be required to perform a range of tasks outside of their official job descriptions, and a good number of employees in startups have generous leeway in making decisions. Aside from that, all employees in a startup generally know who they report to, since it is usually a single person or group the owner or partners. It is very important to have a formal organizational structure in place before your company grows so large that your workforce becomes unwieldy.