Organization Charts
What is an organization chart?
An organizational chart (also known as an org chart) is a document that visually represents a company’s internal structure. These charts help people—whether internal or external—understand how a company is organized and who is responsible for different jobs and tasks, making communication, delegation, and alignment much more efficient.
Org charts are useful for providing clarity around roles, duties, and reporting structures. Clearly defining and understanding employees’ roles and responsibilities helps prevent unnecessary confusion, duplicated efforts, and missed opportunities by clearly demonstrating who oversees what and how different teams fit together.
When it comes to creating org charts, visual clarity is key, but they specific layout of the document is organized to reflect the unique structure of a business. Many charts use labeled boxes, straight lines, and 90-degree angles to show relationships or chains of command. These boxes may include names, photos, and relevant contact information.
5 types of organization chart
Not every business has the same internal structure. Because of this, there are different types of organizational charts to represent these varied business structures. Here are five of the most common types of org charts businesses use to show how their organization works:
1. Hierarchical
A hierarchical organization chart is the most common type of org chart—used to depict one of the most popular kinds of internal structures within companies. Typically, the highest-ranking roles are at the top of the chart, while the entry-level roles are at the bottom. Each role in between sits at a different level based on seniority.
An example for this type of org chart use is the CEO of a corporation occupying the top box, followed by the C-suite executives who report to the person in that role. SVPs, directors, managers, full-time employees, and part-time employees would then follow.
2. Flat
Sometimes referred to as horizontal org charts, flat charts are mostly used in companies where middle management is minimal or non-existent—so this type of org chart can be effective for small businesses. Some organizations, including companies like Facebook, are moving to a flat structure to decentralize decision-making and empower employees. According to LinkedIn, 40% of organizations are likely to shift to a flat structure by 2026—highlighting the popularity of this type of organizational framework.
These types of organizations tend to regard employees as equal contributors who have lots of autonomy and responsibility. This means that the org chart will usually have only one or two levels.
3. Matrix
For this type of org chart, a business’ organizational structure is much more complex than the others. It’s usually suitable for cross-functional teams with multiple managers or businesses with employees who work on multiple projects. The CEO and senior management officials will still appear at the top of the chart. Managers will appear below them, and team members will appear below those managers. Vertical lines will then connect those team members to the other managers they report to.
4. Divisional
As its name implies, this type of org chart is used for organizations that operate with different corporate divisions. These divisions may be geographical or based on different businesses under the same legal entity. Some organizations also divide teams by the product they’re responsible for.
In a divisional org chart, the CEO will still appear at the top. Then, each division will be arranged hierarchically in its own separate column.
5. Network
Network org charts are best suited to companies with a less traditional and more flexible structure. They illustrate a network model that focuses on open communication and decentralized decision-making. Businesses with this kind of structure tend to rely heavily on freelancers, independent contractors, external partners, or a very collaborative, project-based workforce, so the chart is used to demonstrate the relationships between internal departments and external entities.
Uses of organizational charts
Organizational charts aren’t just nice to look at—they have a variety of functional uses for just about every company. Here’s what they can do for you:
- Assist with internal communication, especially when charts include contact info. You can even add photos so people to connect faces and names
- Enable better workforce planning, including tasks like arranging the details of a new recruitment program
- Help new hires get familiar with their team during onboarding so they know where to go for support
- Aid with restructuring, for example if people are switching roles to better utilize talents
- Improve operational efficiency by showing employees how teams work together
- Provide a visual representation of roles to assess skills gaps and hiring needs
- Demonstrate how changes (such as promotion) will affect the organization
- Provide information about roles and chains of command to regulatory bodies
- Assist with succession planning to know who’s ready to move into leadership
- Identify collaboration or cross-training opportunities
You don’t have to let your org charts sit in a binder either, never to see the light of day again. Showcase them on company websites or put them on display on-site to help your employees and anyone else that visits understand how your team connects with each other, gain support, and better understand your organization.
What are the pros and cons of different types of org charts?
The different types of org chart have various advantages and disadvantages. To help you choose the best one for your company, let’s go through the pros and cons of each:
- Hierarchical
- Clear chain of command
- Easy to understand who is responsible for decisions
- Stability and predictable workflow
- Can be rigid and slow to adapt to change
- Layers of management can bloat the organization
- Communication may be slower and more complicated
2. Flat
- Encourages collaboration and teamwork with close relationships between management and employees
- Workers often feel more autonomous, empowered and engaged
- Decision-making can be faster and more efficient due to fewer layers
- Less practical for large organizations
- Role ambiguity can create confusion
- Conflicts may arise more easily and have a more pronounced negative impact as work is shared among fewer people
3. Matrix
- Encourages effective cross-department collaboration
- Can optimize resource allocation
- Employees gain exposure to different people and areas of the business
- Reporting lines can become confusing
- Potential for conflict between managers
- Conflict of interests can arise, and loyalties can be divided
4. Divisional
Focused attention on specific products, markets, or regions
Decisions can be made faster within divisions
Easier to evaluate performance of each independent division
- Duplication of resources can occur across divisions
- Divisions may compete instead of collaborate
- Higher overall costs can be required due multiple divisions
5. Network
- Encourages collaboration and information sharing across extended networks
- Highly adaptable to changing business needs
- Highlights key relationships and communication flows
- Less clarity on authority and accountability
- Can be complex to maintain and understand
- Decision-making may be slower without defined reporting lines
5 tips to create an org chart
Creating an organizational chart doesn’t have to be difficult. However, it does require a bit of preparation. Here are five steps you should take as you seek to create a helpful org chart for your company.
1. Determine the purpose
What (or who) you intend to use the org chart for will determine how it’s structured and what gets included. Here are a few questions to ask:
- Is this something you want to give to new hires during onboarding to help them know who to contact with questions?
- After restructuring, do you want each individual department to know how the new internal structure works?
- Who will be responsible for maintaining and updating the org chart?
The answers to questions like these will determine the number and type of org charts you need.
2. Figure out who’s who
Before you can create a practical org chart, you need to know who’ll be included and what role they play in the organization. If you have old org chart examples from previous years (and the internal structure hasn’t drastically shifted since they were published), you can use those as a starting point.
If not, you may need to sift through all the employees in the system and include their roles or ask someone for help. If you plan to include specific names, photos, and contact information, you should gather that information at this stage.
Make sure all names are spelled correctly and contact information is updated, especially if a particular employee has recently moved roles or divisions.
3. Pick a platform
Creating an org chart using an app is much easier than drawing it by hand. If you use an HRIS like BambooHR, you’ll easily be able to import and synchronize your HR data.
These organizational chart software integrations will ensure your chart is easy to make and also accurate. They also make it much easier to include photos and contact information in each box.
4. Consider a template
Using an org chart template can be a great way to help you figure out how to structure your document. When looking for the best template to use, make sure you choose one that’s aligned with how your organization operates. For example, you wouldn’t want to use a flat org chart template for a company with a hierarchical structure.
5. Update as needed
All organizations change with time. In some cases, the entire internal structure shifts due to changing employee or CEO sentiment. Other times, it’s simply a matter of people getting promoted, making a lateral move, or retiring from the company. No matter the reason, you need an easy way to keep the organizational chart updated.
Creating org charts on a digital platform can help you do this easily. If the software integrates with your HR management software, you may be able to generate automatically updated charts and share with your employees whenever things change.