Organizational Chart Best Practices for Meaningful Org Charts | Creately (2024)

An organization chart is a graphical representation of relationships between an organization’s departments, functions, and people. It can also indicate the flow of data, responsibility, and reporting from bottom-up or top-down. Itsusage across the globe is a testament to its effectiveness. Below are some rules for drawing organizational charts and org chart best practices to make your org chart more meaningful and useful.

Importance of Selecting the Right Org Chart to Visualize Your Organizational Structure

Selecting the right type of organizational chart is crucial because it can impact how effectively the organizational structure is communicated, understood, and used within the organization.

Clarity

The right organizational chart helps to provide clarity about the hierarchy, roles, and responsibilities of employees in the organization. It helps employees understand how they fit into the larger structure and who they report to.

Communication

The right organizational chart facilitates communication within the organization. It provides a clear and concise way of communicating about the structure and roles of different departments, teams, and individuals.

Decision-making

It helps in making informed decisions by providing a clear overview of the organizational structure. This can help leaders identify potential gaps or inefficiencies in the structure, which can be addressed to improve overall performance.

Resource allocation

An accurate organizational chart can also help in allocating resources effectively. By understanding the different departments and their roles, leaders can make more informed decisions about where to allocate resources, such as budgets and personnel.

Change management

They are also important for managing change within an organization. As the organization evolves and grows, the chart may need to be updated to reflect changes in the structure, roles, or responsibilities. A clear and accurate organizational chart can help to ensure that all employees are aware of these changes and can adapt accordingly.

Divide and Conquer

Unless you’re a small company with few employees, organizational charts are definitely going to be complex, with possibly many inter-relationship among departments or functions.

For example, a multinational company may have their subsidiaries in different countries/markets that will have a variety of organization structures (depending on market situation and work functions) and the company will have a huge and complex organizational structure.

When yourorganization chart becomestoo large and complex like the one above, it can be split into smaller charts. You can split it by department, project, site, region, etc.

Whatever it is that makes sense to others in your organization. This makes it easier forthe viewer to understand the responsibilities or the expectations of each department.

Breaking down the org chart into small charts makes it becomes much easier to monitor the progress or workload of employees. So that it can be easier to spread work among workers with less load. It also makes it very easier to do a comparative analysis of a situation so that resource allocation can be streamlined to meet the demands of different situations.

Org Chart Software

There are many org chart software available both online and offline that facilitate the creation of various types of organization charts.

When large organizations have multiple organization charts covering their sub-units it is likely to be difficult to study them together at a glance.

With a chart covering several pages it can also be confusing working out the connections between each entity shown in the chart. With Creately as your organization chart diagramming tool, you can avoid this issue using the diagram linking feature. This allows viewers of the chart to see the connections between charts, navigate between the different charts and possibly like to individual employee profiles.

For example, take a look at the below org chart. It shows the top hierarchy of the company. Now click on the highlighted box (the blue right-hand CEO box) and it will take you down to another org chart that further breaks down that department. You can quickly move back to the original chart by clicking the arrow buttons in the bottom toolbar. Go ahead and try it yourself.

Make Sensible Groupings

When organization charts are being broken down into sub-charts, sensible grouping and linking is a must since the connection of each chart and the flowshould be easily understandable to the viewer.

Sensible grouping is done based on how individuals, jobs, functions or activitiesare differentiated and aggregated. The information flow also requires optimizing within each group but at the same timeclearly differentiating it from the other groups.

Structural Linking

Structural linking of the groups should be performed with an integration mechanism (eg: liaison roles, cross-unit groups, integrator roles or projects and dotted lines) to assist with coordinating and sharing of information across groups which will enable the organizations leadership to provide guidance anddirection throughout the organization.

5 Types of Organization Structures

1. Functional Organizational Structure

The most common structure organized according to functions or departments. For example finance, marketing, sales etc. Suitable for small or single programmatic organizations that do not need to manage across a large geographic area.

Benefits of this model are;

• Develops depth of skills in a particular function or department (most jobs are functional in nature)
• Promotes functional innovation, scale and lower costs
• Is simple to do and easy for each department to understand their core responsibilities, and to hold them accountable

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2. Geographic Organizational Structure

This structure is organized around major geographies. Suited to companies which arelarge with multiple programs that often differ across geographies where local differences are critical for success (e.g. regulation, fundraising, economics).

Benefits of this model are;

• Makes available the resources needed to succeed within a geography
• Allows greater customization of programs or services by region
• Enables clear focus with accountability for results by geography
• Enables focus on geographic funding sources

3. Program Organizational Structure

This structure is organized around major projects. Suited for multi-service organizations and foundations, that has programs which are very different from one another (e.g. different customers, economics, etc.) and where the resources and skills needed to succeed by a program are very different as well. However,the factors for each program are similar across geographies.

Benefits of this model are;

• Promotes a depth of understanding within a particular program area and can promote program innovation
• Makes available the resources needed to succeed within a program
• Enables clear focus with accountability for programresults
• Enables focus on funding sources which are often program oriented

4. Customer/Market Organizational Structure

This structure is organized around customers/clients served by the organization. It is suitable for companies who have very different customers who have different service requirements (resulting in different programs provided).

Benefits of this model are;

• Provides focus to be put on the customer, therefore, enabling development of programs tailored to a population’sneeds and ability to get “results”
• Enables clear focus with accountability for results by customer group
• Enables clear focus on most important customers and/or markets

5. Matrix Organizational Structure

This is a structure organized to manage multiple dimensions, e.g. program and geography. Due to the difficulty of managing, this model is NOT recommended to be used.

Benefits of this model are;

• Enables the organization to (at least theoretically) manage multiple organizational dimensions simultaneously

Some of these types can be found in our org chart examples.

Clear Reporting Path / Hierarchy

When drawing an organization chart that indicates the organizational hierarchy, clear reporting paths must be highlighted so that the viewer/employee gets a clear understanding of the reporting structure he/she should follow. One method to use would be using a color coding or visual queues to indicate the reporting path. When it comes to Matrix organization charts where the reporting relationships are set up as a grid, or matrix, rather than in the traditionalhierarchy, indicating clear reporting path is critical for the success of the organization’s operation.

What Are Your Organizational Chart Best Practices?

Hope you found this article on organizational structure best practices useful and that it helped you to make much more effective org charts.

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FAQs

What are the elements of a good org chart?

  • A good org chart should be easy to read and understand. The information presented should be clear and concise, with a focus on the key roles and reporting lines within the organization.
  • The org chart should accurately reflect the current structure and hierarchy of the organization. It should be updated regularly to reflect any changes in staffing or reporting lines.
  • The org chart should be consistent in terms of formatting and design.
  • The org chart should be easily accessible to all employees within the organization. This can be achieved through a variety of means, such as posting it on the company intranet or displaying it in a common area.
  • The org chart should be flexible enough to accommodate changes within the organization, such as mergers, acquisitions, or restructuring.

What factors to consider when creating an org chart for your company?

  • The first thing to consider is the overall structure of your company which includes the number of departments or teams, the roles and responsibilities of each team, and the reporting lines between them.
  • The size of your company will also impact the design of your org chart. A smaller company may have a simpler org chart with fewer layers, while a larger company may require a more complex chart with multiple departments and teams.
  • Your company culture may also play a role in the design of your org chart. For example, a company that values collaboration and teamwork may choose to emphasize cross-functional teams in the chart, while a more hierarchical company may focus on clear reporting lines and well-defined roles.
  • Consider the communication needs of your company when designing your org chart. The chart should be easy to read and understand, and should clearly show how different teams and departments interact with each other.
  • It’s important to consider future growth when creating your org chart. Make sure the chart can be easily updated as your company evolves, and that it can accommodate new departments or teams as needed.

How to correctly format an organizational chart?

  • The chart should be organized in a hierarchical structure, with the highest level at the top and the lowest level at the bottom.
  • Use consistent shapes and colors for each position on the chart to make it easy to read and understand.
  • Clearly label each position on the chart with the job title and name of the person holding the position.
  • Use lines to show the relationship between positions. For example, a solid line can be used to show a direct reporting relationship, while a dotted line can be used to show an indirect reporting relationship.
  • Avoid making the chart too complex or cluttered. Use only the necessary information and keep the design simple.

Best Practices Org Charts Organization Charts

Organizational Chart Best Practices for Meaningful Org Charts | Creately (2024)

FAQs

What are the best practices for org charts? ›

10 Tips for Perfect Organizational Charts
  • Format the chart to fit on a single page. ...
  • Group people with the same title into one box. ...
  • Make all boxes the same size and space them evenly. ...
  • Show assistants with a side bar below the manager. ...
  • Put the title of the position first, then the name of the person occupying it.

How should an org chart be organized? ›

Perfect for showing a traditional business structure, the hierarchy chart starts with the C-Suite at the top, then it's broken into departments or divisions. Within each division, you'll list senior management, middle managers, senior staffers, mid-level personnel and junior staff members.

How to design an efficient organizational chart? ›

Steps to Structuring a Company Organization Chart for Success
  1. Define the Objectives of the Organizational Chart. ...
  2. Identify Roles and Responsibilities. ...
  3. Structure According to Hierarchy or Function. ...
  4. Add Details and Contacts. ...
  5. Update Regularly.

How do I make my org chart look professional? ›

Use a mix of horizontal and vertical text boxes to fit more into your chart. Group people with the same title into the same box. Space boxes evenly and ensure text box sizes are consistent. Text box on an organizational chart.

What are two rules that should be followed when constructing an organizational chart? ›

The chart should be organized in a hierarchical structure, with the highest level at the top and the lowest level at the bottom. Use consistent shapes and colors for each position on the chart to make it easy to read and understand.

What is the best layout for an org chart? ›

A top-down organizational chart is typically used in businesses where there is a clear chain of command and a hierarchical reporting structure. This is the most common org chart orientation you'll come across, since most organizational structures are set up in a top-down reporting hierarchy.

What 5 things does an organization chart display? ›

The business organization chart shows new employees the instant they come on board, and how they fit into the company. Using the org chart app, they can quickly learn who is who, who does what, who works where, and who they need to get to know.

What are the 4 types of organizational structure? ›

Types of organizational structures include functional, divisional, flatarchy, and matrix structures. Senior leaders should consider a variety of factors including the business's goals, industry, and culture before deciding which type of organization is best for their businesses.

What is the difference between org chart and org structure? ›

An org chart is based on people, while an org structure is based on functions. Org structures outline the responsibility, accountability, and authority for each role in the company. Unlike org charts, they don't change often. They're based on the overall function and vision of the business, so regular changes are rare.

What are the things that an organizational chart must have and why? ›

Organizational charts use simple symbols such as lines, squares, and circles to connect different job titles that relate to each other. Regardless of an organization's structure, org charts are extraordinarily useful when an entity is contemplating restructuring its workforce or changing its management complex.

How should an org chart be structured? ›

Org charts are typically structured in a pyramid shape, and arranged hierarchically with the head of the company at the top. Lines are used to connect individuals to their manager or supervisor.

What does good org design look like? ›

Good Organization Design involves not only changing the systems by which people work, but also supporting people to adapt successfully. For example, your analysis might persuade you to move to a matrix structure. But that won't succeed unless people get support to work outside their former departments.

How to prepare an organizational chart? ›

On the Insert tab, in the Illustrations group, click SmartArt. In the Choose a SmartArt Graphic gallery, click Hierarchy, click an organization chart layout (such as Organization Chart), and then click OK. To enter your text, do one of the following: Click in a box in the SmartArt graphic, and then type your text.

What are the best practices for chart titles? ›

The title of the chart can be descriptive (e.g., include variables and time periods covered) or informative (e.g., specify the intended message of the chart). Axis titles should be descriptive. The title should be clear and help the reader better understand the data presented.

What are 5 uses of an org chart? ›

Org charts depict an organization's hierarchy, which can clearly identify seniority and lines of authority that ought to be followed. It can also show which roles are responsible for what tasks, divisions, departments, or regions. This can remove ambiguity and improve communication.

What are three functions of an org chart? ›

Uses of org charts
  • Organizational and supervisory communication. , such as helping employees know who reports to whom, or helping people get to know each other across the organization. ...
  • Restructuring. , such as switching roles in a team to better utilize everyone's talents.
  • Workforce planning. ...
  • Resource planning. ...
  • Genealogy.

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