Organizational chart

Organizational chart (organizational structure or subordinate structure) is a system that describes the interconnection, responsibilities of the divisions and individual employees within the same company.

It is visually displayed through the use of orgram (organization diagram, hierarchical diagrams), which indicates the names, positions, divisions, departments, divisions, divisions of employees. Looking at the organizational chart of the company, people can quickly understand how the organization is organized, how many levels are in it and what is the position of one or another colleague.

Types of organizational structure

There are from 4 to 30 types of organizational structures. The most common are:

• Hierarchical (linear, bureaucratic): the structure with a vertical form of management. Employees can be grouped according to their roles, functions, geography, type of products or services they provide. The employees are subordinate to the supervisor.
• Matrix: all employees are divided into teams/project groups, which report to two supervisors at the same time, the division manager and the project manager.
• Divisional (subsidiary): the organization is divided into divisions that correspond to either products or geographic regions.
• Project: establishment of an organization or team for the implementation of the project only. Once the project or service is launched, the manager loses control over the organization.
• Horizontal (flat): establishment of an organization or team practically without middle managers.
• Functional: an organization in which employees are united by specializations.
• Virtual: a group of independent organizations or a core organization with partners that share a single product or goal. Companies with a virtual organizational structure can exist on the Internet and other data transfer networks. Therefore, they have a minimum of physical assets, and co-workers and partners can move around the world and communicate using mobile phones and the Internet.
• Networking: a version of the matrix structure. The organization is created on the basis of a string company (broker), which is connected with business partners.

In fact, businesses can combine several types of organizational structures at the same time to achieve their plans.

Advantages of the organizational structure

Building the right organizational structure helps to:

• create a clear hierarchy in the work of co-workers;

• reduce the pressure on the executive staff;

• distribute responsibility correctly;

• successfully manage several offices or subsidiaries;

• determine the structure of payments to employees;

• reduce the number of conflicts;

• save the budget due to the absence of redundant positions and responsibilities;

• increase productivity, etc.

Org chart vs organizational structure

The organizational structure is how a company divides roles, authority and responsibility. The org chart is the visual picture of that structure: boxes with roles or people and reporting lines between them.

How to create an org chart

1. Gather the data: a current list of people, roles, departments and managers.
2. Choose the scope: the whole company, one department or leadership only.
3. Pick the chart type that matches your structure: vertical, flat or matrix.
4. Build it top-down and check that every employee has one direct manager.
5. Keep it up to date. A chart drawn by hand in PowerPoint goes out of date with the first hire or leaver.

Org charts in PeopleForce

In Core HR, the org chart is built automatically from employee profiles, so it updates when someone's role or manager changes. There are two views: by people, with reporting lines, and by departments. You can export the chart as a single PDF page that stays sharp at any zoom level.