There are several types of organizational charts, which can be prepared according to the needs of the company. However, they all have a common goal: to facilitate the understanding of the company's organizational structure and help in decision-making .
In this content, you will learn what a business organization chart is and what are its main types. In addition, we will give 5 steps for you to assemble your own organizational chart.
What is a business organization chart?
A business organization chart is an easy-to-view graphical tool that shows the structure of a company or department. It represents the relationship between the positions, the people who occupy them and their respective hierarchical levels.
A business organization chart serves to facilitate the understanding, visualization and organization of workflows in the company. In addition, it is an extremely important tool for people management , as it provides information on who is responsible for each area, what are the means of communication between the different units and what are the decision-making channels.
The well-done elaboration of this tool can involve a process of optimization of time and resources, as well as increase the efficiency and effectiveness of internal communication .
Types of Business Organization Charts
There are different types of business organization charts. Each can be ideal for different situations. To help you, we have separated a list of the most popular types of organization charts used by companies.
Let's go:
Hierarchical organization chart:
There are several types of organization charts, but the most common is the hierarchical organization chart, which establishes the relationship between positions and employees, showing the verticality in the company's structure. This type of hierarchical organizational chart shows clearly and visually who the managers and subordinates are and what their responsibilities are.
It is an excellent tool to understand how the company operates internally and to clearly communicate the expected result.
Functional organization chart:
Another very common type is the functional organization chart, which graphically shows all the departments and their respective functions. It presents the divisions of each department and the lines of authority and responsibility between areas. A functional organization chart hierarchically shows who reports to whom and how tasks are distributed.
You can see who is responsible for each task and who performs it. This helps to better manage teams, as each member knows their responsibilities and guidelines to be followed.
Functional organizational charts are important for companies as they help improve internal communication, facilitate decision-making and increase productivity .
Matrix organizational chart:
The matrix organization chart is a common organizational structure in which the relationships between subordinates and superiors are not so clear. The manager , or other directive figure, is responsible for two (or more) departments at the same time, so there is a process of sharing responsibilities.
Furthermore, there is more than one form of authority and transparency. For example, subordinates may have access to additional management information that is not directly under their own immediate supervisors.
This framework can be used when there is a need for strong alignment between two different departments to create greater integration and collaboration. The matrix org chart is often used in large organizations such as multinational companies to create corporate efficiency and transparency .
In addition, the matrix org chart is also useful when ongoing management between two or more departments is important to the company's success. However, this type of organization chart also has disadvantages, such as complication and difficulty in coordination.
Other types of business organization charts:
Although the hierarchical organization chart is still the most popular, there are other types of organization charts that can be useful for organizational planning, efficiency in performing tasks, improving communication and quality of work.
These other types of org charts include the department org chart, communication org chart, process org chart, and geography org chart.
The organization chart by department highlights the existing positions in each department, the communication organization chart highlights the flow of communication between the company's units, the procedural organization chart highlights how processes are performed and the organization chart by geography highlights the different locations of the company.
These different organizational charts allow managers to better understand the relationship between people and how work is carried out in their companies.
How to make a business organizational chart?
The business organization chart is essential for any company. It can help with task assignment, business planning, and much more.
We have prepared a step-by-step guide to assemble your first structural map of your company:
Step 1. Define the purpose of your org chart
The first step in building any business org chart is defining its purpose. Once all team members understand what the org chart will be used for, they can start building it.
The purpose of the business organization chart can vary depending on the size of the company.
Generally, it is used to show the hierarchical relationships between employees, to help with decision making, to enable communication between departments, to facilitate delegation of tasks, to define responsibilities, and to provide a general guide to the structure of the company. .
Therefore, when determining the purpose of the organization chart, it is necessary to consider all these elements.
Step 2. Choose your org chart format
The second step to creating a business org chart is choosing a format. There are many different ways to display your business information, so it's important to think carefully before choosing.
First, consider the size of your company, as the number of layers in the hierarchy influences the shape of your org chart. For example, org charts for small companies are usually linear, while org charts for large companies are multi-layered.
Plus, you can choose from many formats, such as bar, tree, branch, circle, and chart org charts. Some formats are more appropriate for visualizing hierarchy, while others are good choices for showing relationships between people or tasks. Choose the one that best suits your company.
You can create your business organization chart online or using specific software for this. Microsoft Vision is an example. Some programs are free, offering intuitive tools to make creating your organization chart easier. Finally, keep in mind that you can update the org chart at any time as your company structures change.
Step 3. Collect the necessary information to create the map
The third step in creating a business organization chart is to collect all the information needed to assemble the map. This step is decisive for drawing up a correct map of an organization and can often vary according to the needs of the company.
A good tip is to create a list with each position, along with their respective hierarchical levels, their subordinate positions and subordinate programs, including the responsibilities of each position.
Collecting information from all positions is essential so that any business organization chart can accurately represent the positions and responsibilities of each one. After gathering information, it's time to organize the content in a business organization chart format.
4. Assembling the map skeleton: use digital tools to facilitate the process
The fourth step in putting together your business organization chart is the skeleton. While there are many different software tools, most of them have basic features that allow you to assemble an org chart digitally.
With the help of software, you can quickly create and edit your organization chart effortlessly. It's easy and versatile, making it extremely easy to change your org chart at any time.
You can use the tool to enter job titles, create divisions by specific work areas, place your team images and even organize the personal information of each team member. It's a great way to identify your company's organizational hierarchy and inner workings clearly and objectively.
In addition, with the business org chart, you get a lot of detailed information about your company's organizational system. This allows you to make smarter decisions and implement necessary changes to improve your team's productivity.