Everyone's almost familiar with organizational charts. Different companies and institutions basically use them to have a clearer picture of the overall management composition of an organization.

What is an organizational chart?

In its simplest form, an organization chart is a visual illustration that helps leaders and managers get a clear glimpse of relationships between each member and their designations. In most cases, leaders use an organizational chart template which can be a customizable document allowing you to construct an organizational chart using a predefined framework. The template generally uses shapes and arrows to accurately specify the relationships of organization members, like sales managers reporting to the VP of sales.

Types of organizational charts

Hierarchical organizational chart

This organizational chart template is the most commonly used structure across businesses and institutions. It's a pyramid-shaped framework where the chain of command can be seen at the top of the chart, like a manager or the CEO. Also, members are grouped with others under the same supervisor. Usually, these members are grouped based on their functions and responsibilities.

Flat organizational chart

Some industries call this the horizontal chart. This diagram is generally useful for organizations having a few levels between the staff-level employees and upper management. This chart usually comprises one manager and various employees with a few divisional reports. Start-up companies use this flat organizational chart template before they expand further to different departments. Furthermore, larger products can benefit from this structure, where most members have equal responsibility.

Matrix organizational chart

The matrix organization chart template looks like a grid showing the cross-functional groups created for special projects. Its purpose is to ensure better communication between teams and avoid frequent realignments. For example, an engineer might be part of the engineering department but can also participate in special or temporary projects. Therefore, they will work under multiple managers.

How to create an organizational chart

There are no right or wrong answers in creating an organizational chart template. As you already know, this diagram has different structures, and each has its own way of making them. Here are some essential tips on how to efficiently structure your organizational chart.

  • Decide on the organizational structure. You can also customize one of the available charts online into the template that fits your company. If you want to create the organizational chart template from scratch, remember to make the spacing and sizes of boxes uniform.
  • Identify the members responsible for various duties. Add each organization member's responsibilities and job titles and include teams and departments. Identity their placements based on the initial framework you selected.
  • Add relationships, including how these groups work together. You can use lines in plotting the flow of duties between every member or team. It's best to use colors to differentiate teams and departments. For example, the sales team can all be yellow, while the marketing department could be blue.
  • Provide links if necessary. The beauty of a digital organizational chart template is that you can elaborate more on employee relationships. The template lets you link descriptions for each role through a separate document.

Organizational chart template FAQs

What is the purpose of an organizational chart?

The diagram ensures clarity on the division of labor and assignments of every department. Most importantly, an organizational chart template promotes coordination and collaboration among employees and departments in an institution. Since the diagram provides a concise illustration of relationships and responsibilities, organizations can also have standardized procedures in decision-making.

What are the components of an organizational chart?

When creating your organization chart template, remember the vital elements that must be present on the diagram. This includes departmentation, job design, a chain of command, a span of control, and delegation. The span of control refers to the number of people reporting to a manager. Meanwhile, the chain of common means the line of authority.

Most importantly, an organizational chart involves centralization and decentralization. The former gives leaders complete control over decision-making, while decentralization allows employees and staff to contribute to business decisions. Before creating your chart, the group must decide between the two, as it could also affect decision-making processes.

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