Organization chart of a company

The organization chart shows the internal structure of an organization or company. In this guide, we share the details about the organizational structure of a company, various models of organizational charts, valuable tips, best practices and downloadable templates you can use according to your company structure and size.

What are org charts?

The organizational chart is the detailed graphical representation of the mode of operation, based on the resources available to the company and on the vertical or horizontal subordination relations between the different entities that compose it. Entities can be compartments and individual positions, but HR must prepare a job description for each post. Organizational chart are often reffered as org charts or organigrams.

The organization chart reflects its organization, as its manager or founder conceived it, but it is not a document that remains unchanged. Depending on the needs and changes along the way, this may change.

The company manager will outline the organizational chart with the director of human resources and heads of departments. Then the HR department is tasked with bringing it to the attention of employees and implementing it.

This graphic scheme should take into account the business strategy and the human capital available to the company.


Organization chart models

Moreover, given the variety of existing types of companies, the organization chart must accurately reflect the structure and type of your company. Therefore, we provide you with several organizational chart types, as follows:

Vertical organization chart (hierarchical)

This organization chart is of the type of pyramid in which the person in charge has the highest level of authority and has subordinates divided into departments.

Download the Vertical organization chart tempate


Horizontal org chart

The horizontal organization chart model - has a flat, lateral structure, there are not too many middle-management positions, so it generates a sense of independence for employees.

Download the Horizontal organization chart tempate


Matrix organization chart

The matrix flowchart model is a hybrid between the vertical and horizontal org charts. It does not focus on levels of authority and hierarchy but communication and relationships. It is used in companies that carry out large projects, where employees from all departments work together for that project.

Download the word model for the company's organization chart and modify it according to its departments, hierarchy, and structure.

Download the Matrix organization chart tempate


Dynamic company organization chart in tabular format

With LeaveBoard, once you embark your employees, you will have the essential elements of a flowchart organized in a simple, clear, and structured way in an Excel spreadsheet format. This table is constantly updated with the latest updates in your organization - changing roles. New teams/departments/locations created, different approval flows new hires or terminations. Although the organizational chart is not hierarchically structured, it provides an overview of the efficient management of human resources.


How are org charts used?

Depending on the state of your business, you can use the org chart in multiple ways. 

  1. Structure the management hierarchy
    By using an org chart, you will have access to the perspective of your organization's composition and the relationship between various employees. This also helps understand how the overall business is structured and how each employee fits within the organization.
  2. Workforce planning
    The organization chart helps identify where you need to focus your efforts in hiring to have a more balanced organization. Some departments might have more human resources, and others could be lacking human capital.
  3. Company/department restructuration
    From time to time, some employees don’t feel like they are giving their most value in their role. You might consider switching to a different team or department to eliminate such inefficiencies, and the org chart helps with this. And when you want to close a business area, you know which people will be impacted.
  4. Management reference tool
    When you need to find more details about a particular employee, whom he is reporting to, who are his direct reports, and what is his role. When you know who is responsible for whom, it’s also easier to manage larger companies. In this way, you will improve the lines of communication and get everyone aligned.
  5. An employee directory
    Our favorite use case is this one when you can see go deeper on the employee data. More specifically, you can find their phone number, email address, work schedule, team, and much more for any team member.


The choice of tool to design the organigram

Several computer tools are at your disposal to facilitate the design of this graphic document.

The most widely used medium remains the Microsoft Office suite, which has the advantages:

  • It is available widely (Word, PowerPoint and Excel, leading software in the professional world),
  • easy to use since it gives access to pre-existing diagrams (called "SmartArt") that you will only have to fill in with your internal information (job titles, names of the corresponding employees, photographs to facilitate reading and make the livelier document),
  • it is also a very effective tool that offers varied, clear, and easily interpretable diagrams.

The drawback is that you must update it manually every time someone leaves or joins the company. Therefore, we recommend software that streamlines the org chart creation and update.


Tips regarding the design of your business org chart 

To make it easier to read and understand, the org chart should be clear and readable at first glance, so do not overload it with information.

The larger the structure, the less detailed the organization chart will be to limit the difficulty of reading and the risk of loss of meaning.

Also, in the case of a large company, a global view is useful. Still, it may be necessary also to design one for each of the departments making up the structure to facilitate understanding and readability. Therefore, we believe tabular org charts are easier to comprehend no matter how big your organization is.

Conclusion

Remember, with templates, you can only create an org chart that represents the present structure. If your business is constantly changing, with new hires, departures, role changes, constant switches within the reporting functions, consider approaching dynamic tools that facilitate your employee management and provide you a better perspective in real-time. Automate the boring part of updating org chart templates, and have the right employee data at any moment you need.

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