What is necessary for a company or institution – regardless of its size – to function effectively and harmoniously, achieving each of the set goals in turn? You’ll probably name a variety of elements ranging from a well-chosen team with the necessary competencies, a tailored strategy of action to meet the needs of the target group or acquiring all the necessary resources.

Still, there’s one more element of extreme importance you may have omitted – the efficient structure that a company or organization establishes. This structure consists of dependencies and responsibilities that are effectively visualized by the so-called organizational chart. Below we explain what exactly this tool is, as well as point out what benefits its use brings to companies and institutions operating in various industries.

Org chart – or what?

An org chart isn’t just a simple, straightforward drawing, but a complex management tool to depict – but most importantly understand – the structure of a given company, institution or other entity. It is a graphic visualization of the hierarchy (from the highest to the lowest level), the division of responsibilities as well as the links between various entities (different teams or individuals).

It is a handy means for employees (especially those just starting), as it helps them see the structure of a company or institution by clearly defining the roles of each unit and their scope of responsibilities and competencies. It can also be practical for outsiders (such as potential investors or partners) who want to know how a company or institution operates. The essence of an organizational chart, therefore, lies in ensuring transparency and effective management of the resources at hand

What does the org chart contain?

There are different types of tools described (from hierarchical, to functional, to matrix, i.e. focused on ongoing projects). Exactly what elements are included depends on the specific case (especially the size of the entity and the industry in which it operates). Most often, however, it includes information on such elements as:

  • executives – in the highest part of the visualization are placed in the most important executive positions responsible for making key decisions concerning the entire company or institution. Here usually appear such people as the president, deputy president, general managers (of such areas as HR, marketing, development, sales, etc.), and sometimes top managers,
  • individual divisions or departments – each department (e.g., marketing, HR, IT, sales, legal and compliance, etc.) is represented by a separate block, and in it there are individual positions and roles (within departments there may also be teams responsible for a specific area, e.g., the marketing department the communications, performance and outreach team),
  • Breakdown of positions – within each department or division, the specific positions that exist in the company or institution are also listed (from directors to senior and junior specialists, to interns and trainees), often with their assigned responsibilities,
  • lines of communication and subordination– as part of the graphic representation of the structure, it is also indicated who is responsible for reporting its activities and to whom such a report must be submitted,
  • key/legend – a graphical visualization often also includes a key or legend that explains the meaning of various symbols and lines used in the diagram. This makes it easy for all users to see the structure and understand the meaning of all the different elements.

Why should a company have an org chart?

What good does it do to prepare an organizational chart? Firstly, in this way employees can more easily understand their place in the structure – they know what their tasks are, to whom exactly they are responsible (both within the basic and higher levels) and to whom they can turn in case of a problem.

What’s more, if they need the support of a person from another department, they can check for themselves in the org chart who is responsible for a particular area and be sure (in most cases) that they have referred the issue to the right person. In this way, clearly defined lines of communication and responsibility help avoid confusion and work stoppages. At the same time, the described graphical visualization also makes it possible to identify areas where there are gaps or too much workload, allowing for a more efficient distribution of activities.

org chart

Org chart – summary

Given the benefits listed above, we can safely say that managing a company, institution or other entity without an org chart would be a daunting and extremely difficult task. Communication would be more drawn out, decisions would be less well-thought-out (due to the lack of full knowledge of internal structure and relationships), and resources would be deployed in a non-optimized manner.

An org chart facilitates management, while also enabling an understanding of the company or institution as a whole and identifying areas where improvements and changes can be implemented for further growth and success. Thus, every company and institution – even a small one – should take care to create an accurate and (crucially) up-to-date org chart.

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Author: Klaudia Kowalczyk

A graphic & UX Designer which conveys into design what cannot be conveyed in words. For him, every used color, line or font has a meaning. Passionate in graphic and web design.