Importance of Using an Organization Chart for Businesses in 2022

An org chart is a useful tool that businesses can use to show how their company is set up. The org chart, which looks like a flow diagram, helps show how different departments and employees work together.

You might need a clear visual to show new employees how your business is set up, or there might be some confusion about who reports to whom. The org chart can be used as a management tool to improve how well a team works, as a planning tool, or just as a visual staff directory.


Types of organization charts

Each type of organization chart is made to fit a certain kind of business structure, so it’s important to choose the right one for your business.

There are four kinds of organization charts:

  1. Hierarchical structure: The most common shape for an organization chart is a pyramid, which shows how a business is usually set up. At the top is a single person or group, then managers, and then other employees. In this structure, the chart is divided by departments, such as IT, marketing, operations, etc., and all employees report to a single manager.
  2. Structure by divisions: This kind of structure is divided into separate, semi-independent branches based on product lines, geographic areas, or specific functions.
  3. Matrix structure: Businesses that use this type of org chart divide their employees into teams based on projects or products. These teams report to both a project manager and a functional manager. This makes a chart that shows relationships across the whole business and not just from one side to the other.
  4. Flat structure: The flat or horizontal structure is most common in small businesses and has few or no middle managers between staff and executives.


How to create an org chart?

Regardless of wherever you work, having a clearer understanding of who is responsible for what and how they fit into the larger picture may help everyone execute their duties more effectively. You can easily create your org chart using an org chart software. There are so many different kinds of softwares you can use to make your work easier and faster. Whether it’s an established office, a startup, a manufacturing plant, or something else entirely, an organizational chart provides everyone with a quick peek into how the business is structured.


Organization chart benefits

A well-done org chart can help a business be more clear and communicate better by showing clear lines of authority and where each employee stands in the company. Here are the most important benefits:


Grow in a way that works well.

When employers can see where everyone fits in the organization and what tasks they do, it will be much easier to see which parts of the business need to change. Whether you’re combining two teams into one or hiring more people, the chart makes it easy to see how things will change. This lets you predict their success or failure more accurately.


Make it easier to talk to each other.

With a clear organizational chart showing how people work together, each employee knows who they can go to for help instead of trying to figure things out on their own. In the diagram, it’s easy to see who is in charge of what and who is working on which projects. This helps cut down on wasted time and make things run more smoothly.


Look at the big picture.

It can be easy to forget that the work you do is part of something much bigger. If the people who work for you can see how their job helps the business run smoothly and efficiently, it will boost their morale and get them to work much harder.