Organizational Chart

Organizational Chart

An Organizational chart is a diagram that visually represents the structure and hierarchy within a company. It is often called organigram or organizational diagram. Most commonly organigrams show the relations and the lines of communication between the various people working within a company, starting from the manager all the way to the workers. In larger companies with more employees it may also illustrate the different departments or functional teams and the relations between them, instead of describing each employee.

What are Organizational Charts used for?

Organizational charts are the most effective way of creating and defining the organizational structure of a company. They are also used for dividing the functions within the organization and keeping the related responsibilities of each position clear to everyone involved. Organizational charts also enable the employees to see whether or not a promotional channel is open. They are a wonderful way of improving the overall work performance and aid in developing the structure of reporting within the firm.

Additionally, with an organizational chart it is easy to see if the officer’s workload is too heavy. Moreover, it helps in developing hiring and growth strategies and the improvement of the efficient interaction between the staff members.

Types of Organizational Charts

Organizational charts show the structure of the company along with the relationships and relative ranks of its parts and positions - all the elements that form the organizational culture. Each company has its own unique culture which determines the type of organigram that will best suits the firm.

Although each organigram is as unique as each company, in summary, the organizational charts can be categorized in the following main types:

1. Functional Structure

Applies to organizations in which the position descriptions are tightly specified and separated by the functions that each department performs.

Functional structure


2. Divisional Structure

Applies to companies where the employees are grouped together in teams based on their responsibilities for a particular product type or marker service.

Divisional structure


3. Matrix Structure

Applies to companies in which the employees are divided in both functional and divisional units.

Matrix structure


4. Geography Structure

Applies to organizations where employees are grouped based on region.

Geography structure


5. Project Structure

Applies to companies where employees are grouped based on the product or service provided by the company.

Project structure


6. Horizontal / Flat Structure

The flat organizational structure applies to working teams and company structures where all the employees have equal rights and responsibilities. In this working environment most commonly one of the employees/partners is chosen from the majority for a formal team leader or a representative of that team. The flat organizational structure is suitable mainly for small companies and start-ups in their early stage in which the decision making power is shared between all employees and they are held accountable for them.

Flat structure


Templates | How to create an Organizational Chart