An organizational chart is a graphic representation of the structure of an organization. It is used to show the hierarchical relationships between managers and their subordinates, as well as departments. The organizational chart is a useful tool for organizations to visualize and specify cooperative, functional or hierarchical relationships and to communicate the names, competencies and contact information of each actor in the company.
When a new partner joins the company or in case of internal mobility, this type of document must be updated on a regular basis to be effective. Employer brand managers are now increasingly named in the organizational charts of large companies.
Thanks to this integration, they have the opportunity to mark their HR strategies with the aim of increasing employee remuneration or retaining the skills of their employees. To do so, an annual evaluation interview must be scheduled.
As previously defined, the organizational chart is a communication tool that allows you to understand the links and relationships that exist within an organization. It has the following features:
It’s much easier for business leaders to decide which areas of the company need to change, when they have a clear picture of where everyone fits into the organization and what functions they perform. Whether it’s merging two teams into one or hiring more staff, the moves can be clearly mapped in advance using the chart, allowing you to more accurately predict their success or failure.
The advantage of the organizational chart is that it helps clarify working relationships, since they are graphically visible, each employee knows who they can go to when they need help, instead of trying to struggle alone. In the diagram, it is easy to see who has what responsibilities and who is involved in what projects, which minimizes wasted time and improves efficiency.
It can be easy to overlook the fact that your work contributes to something much bigger. Employee morale and productivity will be significantly improved if they can clearly see how their work directly contributes to the smooth running and efficiency of the business.
The main challenge with organizational charts is that they need to be changed frequently to accommodate the changing structure of the company. If new people join the company or if current staff changes shifts, the organizational chart will need to be updated to reflect these changes, which can result in additional administrative tasks for managers.
Another potential problem with a fixed organizational chart is that it can prevent employees from asking for help from someone outside their team. This can lead to a lack of idea sharing and tunnel vision.
Each type of organizational chart is designed to fit a specific business structure. Therefore, it is important to choose the type that best suits your own business.
The most common form is the pyramid, which illustrates a traditional corporate structure. A single person or group is at the top, followed by those with less responsibility.
Within this structure, the organization chart is divided into departments (e.g., IT, marketing, operations, etc.) and all employees report to a single manager and generally communicate with their subordinates.
Illustration of a “classic” hierarchical organization chart
Note that this type of organization chart is also called a “rake”, “banner” or “pyramid” chart, and is referred to as a “functional” chart when the graphic elements include the names of people and their roles.
These charts have the advantage of being simple and clear, since each employee knows “on paper” to whom he or she is accountable as a team member. However, they can reveal organizational flaws, such as a lack of communication and coordination between the many branches of the structure, or the weight of hierarchy on the staff, which can stifle initiative.
There are several variations of this organizational chart, but they all adhere to the idea of alignment of the different command units. The tree organization chart, in which employees at the same hierarchical level are arranged in a vertical line, or the folded organization chart, which combines the “pyramid” presentation with the “tree” presentation.
Illustration of a hierarchical “tree” organization chart
Illustration of a “folded” hierarchical organization chart
A pie chart is an alternative to the standard hierarchical organization chart, but like all charts, it visualizes the organizational structure of a company to show information such as who reports to whom and to which department each employee belongs. Instead of viewing the organization from the top down in a pyramid structure, the organization is drawn from the center out. The middle circle represents the highest manager in the company. The outermost circles represent first-level employees and individual contributors. In terms of functionality, there are not many differences between circular organization charts and other types. Rather, the differences are psychological.
Illustration of the “circular” organization chart as practiced at Harley Davidson
The cloverleaf organization chart is a type of organization chart that is perfectly suited to companies that have a collegial management style. In other words, the cloverleaf organization chart is suitable for companies that put their different positions or functions on the same footing. This type of organization chart is subdivided into four main functions which are:
- Administrative management,
The cloverleaf organizational structure has the advantage of treating all employees equally, regardless of their role. Therefore, whether the effort succeeds or fails, responsibility is shared.
Illustration of a “cloverleaf” organization chart
This is a type of organizational chart that allows the representation of each production unit, department and management of the company. Through the creation of links, the global organization chart facilitates relationships between production units.
The main advantage of the global organizational structure is that it facilitates the decentralization of the company’s operations in many countries by facilitating the delegation of authority.
Illustration of a “planetary” organization chart: League of Nations, 1930
Organization charts that adhere to a standard are standardized. Using a uniform standard has the advantage of allowing comparisons within and between organizations. However, they are difficult to produce and read, which is why so few companies use them.
For example, the NF Z 12 001 standard, created by AFNOR (Agence française de normalisation), recommends a set of specific guidelines that must be followed when creating an organizational chart. The organizational chart is displayed from top to bottom, with each line representing a separate team member or division. Therefore, there can only be one person on each line.
Illustration of a standardized flowchart
This type of organization chart, also known as a flat organizational chart, has few levels of middle management: management and employees. In these companies, employees assume more responsibility and are more directly involved in decision making.
This type of organization chart is often used when employees report to more than one manager. For example, a company has a group of graphic designers who all report to the art director. The designers are also involved in other projects led by their own project manager. In this case, the designers are managed by two managers.
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