Organizational chart

Discover the organization chart definition, role and importance of this company diagram, download the org chart template and learn how to use it.

What is an organizational chart?

An organizational chart is a visual representation of a company's internal structure, by detailing the roles, responsibilities, and relationships between the employees within an entity.

Organization charts are alternatively referred to "org charts", "organization charts", "hierarchy chart", "organogram" or "organigram(me)".

Org charts are focused at company level, or they are focused to one department in the case of a large organization.

Note: Among the biggest challenges for new hires is learning about their colleagues and who does what. The organizational structure reveals exactly how authority is divided, on how many levels and how are the responsibilities assigned and coordinated.

Types of organizational charts

The organizational structure reveals exactly how authority is divided, on how many levels and how are the responsibilities assigned and coordinated. Therefore, lose no more time and start designing an organizational chart for your business. It may sound pretentious, but in fact, it’s a graphic representation of the arrangement about your levels of authority, rights, and communications inside the organization. Since every company is different, you have to choose the chart that best fits your company’s needs. In the following, we will present 3 examples of the most common types of org charts.

1. The Hierarchical Org Chart

This is the traditional and oldest type of org chart and its structure resembles the one of a pyramid — there is one person in charge at the top of it and then more subordinates in charge of the lower positions. In this type of organizations, the higher managerial positions imply domination over the lower ones and the chain of command goes from the top to the bottom. Usually, the hierarchical organizations are structured by department — marketing, financial, legal; but they can also be organized by a specific product when companies offer all kinds of products, services.

The most important advantage of this type of chart is that it provides clarity: the decision-making process is smooth, everyone knows what his role is and whom to report to. Nevertheless, there is one downside — the employees in low-rank positions may feel undervalued if they see no opportunity to promote to the higher positions. Not to worry, the flaw of this chart can be overthrown by entering a different type of org chart.

2. The Horizontal Org Chart

If the first type of chart meant vertically, this one is more about a lateral structure. The horizontal org chart is more suitable for smaller companies, at the beginning of the road, since it enables employees to be independent in their activity. There are none or very few middle-management positions, so the top managers will be in direct contact with the regular employees. Many upsides can be identified regarding this org chart: there is a lot of communication, the new possible ideas can be implemented faster and there is no feeling of undervaluation as in the hierarchical companies. However, since perfection is not possible, the lines of responsibility can be blurry and employees may sometimes lose track of whom to report to.

3. The Matrix Org Chart

The hybrid between the 2 charts presented earlier, The Matrix org chart is becoming more and more used. We do not speak so much about hierarchy, levels of authority, but about communication and relationships. It is particularly used in the management of vast projects, where employees are drawn from different departments to a special team. So they report in this case to multiple supervisors but remain in their respective positions. The main benefit of this chart is that is a very effective tool for teams: supervisors can pick the employees with the skills they need and employees work and interact easily for a unique project. Still, when becoming very detailed, this matrix chart can bring up the confusion.

Vertical, Horizontal or Matrix? The choice is yours. It is about your company and your vision about the growth of your business. Think carefully before designing an org chart and do not forget to get feedback from your team, since human capital is at the core of every company.

Organizational chart templates

Did you know that you can use Excel, Powerpoint, Word and the Google sheets to create an organizational chart for your company? Below you will find several types of free organizational chart templates that are free to download and provide you a good start when you would like to create one for your company, according to the structure you decided to follow. Please adjust the sample chart according to your company needs, structure and relations. All templates created by AraHR are free to download.

1. Organizational chart template Excel

Moreover, if you want to update the file, please find this Excel tutorial on how to make an organizational chart in Excel using SmartArt and create a link from some positions in the org chart to the team biography.

2. Free organizational chart template Word

If you are looking for the best answer to how to create an organizational chart in Word, look no further. Here is the answer:

Additionally, Microsoft has a good tutorial on creating an organizational chart in word here.

3. Org chart template in PowerPoint

Looking to make a simple organization chart for your business in less than 10 minutes, from scratch? In this video you get the essential details about how to use the SmartArt, how to format your organigramme layout vertically, horizontally, how to configure the hierarchical relations between the staff or add pictures to the employees.

4. Organizational chart template Google sheets

The Gooru shares a simple tutorial on how to create an org Chart in Google sheets:
1. Entering all the roles (in the correct format) in Google Sheets.
2. Turn them into an Org Chart with the chart creation tool.
3. The chart will update dynamically as you modify the roles in the spreadsheet.


How to create an organizational chart?

In order to make an org chart that will be valuable in your company, our advice is to reflect the next steps, and then decide on what is the best solution for your needs.

A. Employee data
Identify where is the employee data, if your HR manager will be in charge of keeping it updated or it will be someone else, and how often the employee data will be updated.

B. Organizational structure
Based on your needs, and the way the company works, you can build a hierarchical, a horizontal, a matrix, a mix or something else.

C. Visual representation
Depending on the software used you will develop your org chart, your visual representation options are limited or plentiful. Thinking about adding a headshot photo to every employee, or just add the name and the role? Do you have one or more managers? How you will be able to update it.

D. Usage
Lastly reflect on who will use it. Will this be printed? Will it be online? Does it need to allow easy and simple editing?

How to design an organization structure for your business?

According to Rich Allen, a professional business advisor and coach, In every business is very critical for employees to know what they are responsible for and how they relate one to another.

Moreover, the org chart ensures that there is nothing is left uncovered and all the loose ends are tied up.

Build your organization structure as it will look in 3 years. Imagine it out, draw it out, and you will know where you are heading with your organization. Build it based on function (Sales, Marketing, HR, Operations, etc), rather than the individual.

You will need to know that there are employees that are doing the jobs for multiple functions at the beginning, however if you look 3 years out, you can put then people in multiple roles. In this way you will show to your employees that there is opportunity to grow and to move up in the hierarchy.

Trough time your org chart will evolve, and since you know what structure you have put in place, and which roles are the most demanding, you will be able to plan the sequence in which you will recruit new employees.

By following this powerful way to look in you will know at any time:

  1. Who does what?
  2. What responsibilities are tied to whom?
  3. What opportunities will exist to move up in the organizational chart?
  4. How is the org chartc expanding?
  5. What is the sequence the future hires?



What are the differences the Organizational Structure and the Org Chart?

TypeFocusDocumentationChange frequency
Organizational structureFunction-centricPurpose, accountability, KPIsInfrequent, changes in strategy
Org chartPeople-centricTitle, job descriptions, HR responsibilitiesFrequent, changes with people

Organizational chart software

Aside Microsoft Word, Excel, Powerpoint or Google Sheets, if you decide to buy an organizational chart software, there are several solutions in the market:

Plan for growth with a flexible and collaborative org chart you can generate in minutes.

Pingboard is real-time org chart software that makes it easy to build professional looking org charts.

Lucidchart is your solution for visual communication and cross-platform collaboration.

Easy and Powerful Org Chart Maker.

Use Canva's free online organization chart maker to create your own customized organization chart for your team.

Create, edit, export, print, and share your organizational chart with Organimi's cloud-based software.

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