When it comes to your business, it can be hard to keep things in order. There are so many moving parts when you run a business.

You have to keep your clients happy. You have to work with your employees in such a way that they want to put their best foot forward. You have to make sure that you’re bringing in enough money to meet your overhead.

Organizational Charts

Keeping all of that straight in your mind and in actual practice can be very difficult. That’s why there have been numerous strides made in the business spheres that will allow you to maintain order and know what’s going on in your organization.

They are called organizational charts.

Organizational charts can come in many different forms, but they’re mainly meant to help keep order in your company. At the end of the day, they’re meant to help.

You just have to find the organizational chart that works best for you.

What An Organizational Chart Is

An organizational chart shows the internal structure of an organization or company. This can take on several different shapes and there are different formats for the chart.

On the charts, the employees and positions are represented by boxes or other shapes, sometimes including photos, contact information, email and page links, icons, and illustrations. Straight or elbowed lines link the levels together.

There are hundreds of thousands of templates online that you can use to create your organizational chart. There are organizational chart software programs online and there are many that you could find in books at your local library, as well.

The organizational chart creates a clear visual depiction of the hierarchy and ranks of different people, jobs, and departments that make up the organization.

Just so you know, organizational charts can be known by many different names, including org. charts, organograms, organogram charts, and hierarchy charts.

Types of Organizational Charts

Depending on where you look, you might find some different information about how many types of organizational charts exist in the world. At the end of the day, you can boil them down to three main types: hierarchical, matrix, and flat.

This article will now go further into the different types of organizational types.

Hierarchical Organizational Charts

When it comes to most business structures, the type of organizational chart is the most common. This is where the term “hierarchy chart” comes from.

A hierarchy is where one group or person is at the top (such as a CEO or the big boss), while those with less power are beneath them, in the shape of a pyramid.

To help with the image of this organizational chart, picture the idea of a common monarchy. Most of these types of monarchies have a king or queen at the top.

When it comes to this organizational system for your business, the CEO is the monarch. With a hierarchy, members typically communicate with the person they report to and anyone who reports directly to them.

This means that if you’re at the bottom of the totem pole in one of these organizations, it’s very hard (and almost impossible) for you to speak to anyone above your level.

Matrix Organizational Charts

Another of the main three types of organizational charts is the matrix organizational chart. This type of chart is usually only seen when individuals have more than one manager.

So, if your organization has teams or different divisions that work on different aspects of the same project, this might be the organizational chart that you should look into.

For example, an organization could have a team of graphic designers who all report to the head graphic designer. In this specific example, the graphic designers are also working on other projects that are likely headed by a separate project manager.

In this case, the graphic designers will have two managers. Those two managers will be notated on the matrix organizational chart.

Flat Organizational Chart

The flat organizational chart is also known as the horizontal organizational chart.

The flat organizational chart has little or no levels of middle management. This particular type of organizational chart typically consists of two levels: the top administrators and the workers.

In companies like this, the workers have more responsibility and are more directly involved in decision-making. For smaller company structures, it might be good to start with this particular type of organizational chart.

How Do Organizational Charts Work?

When it comes to determining the connections in your organization, there are specific ways to define them on the chart.

Connections on the charts are sometimes called “relationships” or the “chain of command,” and it is these connections that typically depict the connection between supervisor to subordinate. It can also show off lateral relationships and show people at the same level of the company who typically might exist in the same business space.

When these connections are set up by lines, they are called line relationships. You might have solid lines that depict the main lines of authority and then dotted lines which can be used to show secondary lines of authority (such as middle managers).

There are no specific rules that you have to follow when you make your organizational chart. All you have to do is make sure that you can understand the format of your chart. Make sure that all the symbols and lines that you’re using make sense to you so that you can explain them to your employees as well.

The clearer you are about the organizational structure, the easier it will be to make your formal relationships clearer.

Pros and Cons of Organizational Types

Although specific organizational types can be helpful in specific situations, you may find that different organizational charts have distinct advantages and disadvantages.

Make sure that you know what the pros and cons are for each of the organizational types so that you can choose the one that works best for your organization.

Hierarchical Organization

In a hierarchical, vertical, top-down organization, lines of authority and communication should be clear.

It was mentioned before that a hierarchical chart is most in line with a monarchy. However, another way to imagine it is that you can think of the military.

When it comes to the business spheres, imagine a chief executive and C-suite executives. Then, it’ll work down to directors, senior managers, middle managers, team leaders, and team members.

The strength of this particular hierarchical structure is the clarity and stability of this system. Every person who is a part of this system can know exactly what their role is, and they’ll be able to know exactly who they report to.

However, on the flip side, this hierarchy isn’t able to be very flexible. This particular system is very rigid, which means that it’s very hard to change it or make shifts in the structure if a project calls for it.

Once you put this specific hierarchy into place, it’s very hard to shift it, no matter how urgently you need to. So, if a project suddenly needs multiple managers, and it requires that people split into different teams, the entire system can fall apart.

The different layers of management can also become very bloated in this type of organization because as people want to elevate their position, they might reach a plateau that they can’t get promoted from. This means this organizational chart might end up with a bunch of middle managers and a few laymen.

Matrixed Organization

As you’re able to see from the matrix organizational chart, it’s much easier to have cross-departmental relationships in this specific system.

People can be more fruitful and cooperative in this specific system, and you can even see it from how the organizational chart flows.

On the flipside, especially when it comes to making the organizational chart, this particular system can create confusing loyalties. A person may want to believe in their immediate boss but might not play so well with a different department’s boss.

Flat Organization

When it comes to the flat/horizontal structure, most layers of management are cut out which means that close relationships happen between the top and the employees. This is typically a specific element in smaller companies and organizations.

However, as you’ll eventually find out when you make a flat organizational chart, if your organization is too large, it can be very hard to create that small network and close bonding experiences.

In this specific system, employees might feel better about teamwork and autonomy within their projects, but if any problems crop up between any of your employees, it becomes much more obvious.

If you only have four people on a project and half of them can’t work together, you may not have much of a project to work on.

Organizational Chart Limits

One of the biggest issues of organizational charts is that they can quickly become out of date. Especially if you have a large amount of turnover in your company and a lot of things that are frequently changing, it can be hard to keep your chart accurate.

Although online chars are easier to update than printed ones, it’s still very easy to have your chart become out of date if you forget to update or add even one person.

It’s possible that you can use automated systems and other editable online programs to try and keep it accurate, but these charts will tend to only be accurate for the official relationships. With these charts, it can be hard to notate the unofficial relationships that may come to life during daily work.

Organizational charts are a necessity, but they also have various issues. Just make sure to choose the right chart for your organization and make sure to keep it updated.

It’ll help with efficiency and making sure that your company continues to work in the best way.