Organizational Chart: A Diagram
An organizational chart helps to explain the structure of the organization in the form of diagrams. The organizational charts work as the support tools while defining the organizational structure, culture, and style. These charts are normally designed during the organizational planning or restructuring phase. The organizational charts are structured depending on various categories. They can be created by using various templates in Word, Excel, and PowerPoint. Read ahead to learn how to read through these charts.
The Hierarchical Organization
The hierarchical type is considered the classical form of the organizational charts. Hierarchical organizations are structured in a way where the employees are organized in groups or under functional departments. Each employee will have one clear supervisor. The hierarchical chart for the functional organization is illustrated in the diagram below. The hierarchical chart clearly explains the organizational structure in a simple way. The different groups such as marketing, sales, production, and design are structured with each employee clearly having a supervisor.
The projectized hierarchical chart is created normally for organizations where the teams are often juxtaposed. The teams work on different projects and the projects are managed by different project managers. The project managers will have complete freedom and a great deal of control over these projects. These projectized organizations will also have the supporting functional departments. They often report directly to the project heads or work as a separate functional group to support specific functions. The key advantage of having a hierarchical organization is its reduced communication overhead since each staff has one supervisor and one subordinate.
The Matrix Organization
Matrix organizations are structured as a combination of the functional and projectized frameworks. According to PMBOK (Project Management Body of Knowledge), depending on the level of authority the project managers possess, the strength of the matrix organization is determined. Most of the time, strong matrix organizations will have full-time project managers controlling the entire project life cycle and the project deliverables. Managers supervise functional teams consisting of full-time employees.
In weak matrix organizations, the project managers have limited authority over the projects and the project teams. Most often, these project managers play the role of a project coordinator.
Matrix management is one of the key functions of human resource management. A pool of skilled employees works under the same management but on different projects in the matrix organizations. The key advantage of a matrix organization is its better staffing management. Important individuals with the right skills are placed in key roles and on projects. At the same time, the conflicts in staffing between the functional teams and the project manager is common in such organizations.
The Flat Organization
The flat or horizontal charts are designed for small companies or for individual groups within an organization. In this model, few to nil interaction occurs between the higher management and the staff. The appropriately skilled and trained workers manage the entire organization and are highly involved in decision making. However, this model works the best in small level organizations. As soon as the size of the organization reaches a certain level, managing the organization in a flat structure becomes impossible.
Since baseline employees work as the decision makers, communication and feedback move quickly through flat organizations. The process of decision making is also quicker compared to other types of organizations. However, this structure may not work well if implemented in the global organizations where the size of the company is too big.
Organizational Charts Improve the Effectiveness of Operations
Using the various types of organizational charts discussed in this article works as a vital tool for all types of organizations. These charts improve the effectiveness of the operations by managing change well. The change management is well-organized in these structured organizations which help a lot to polish the operational efficiency.
Another key point is how communication can be improved by using these organizational charts. These charts give a way to provide for structure, so that both the upward as well the downward communication is monitored and managed well. The gap at any point of communication is identified immediately and corrected using the change management processes. The informal communication is also recorded, so that any unwanted or unethical problems are stopped at the beginning.
The visualization of the organizational structure through charts is the easy way to create a successful framework during the change. The clearly defined and structured organizations escaped the recent recession primarily because they had a clearly designed organizational chart. This is how the India based global IT giants like TCS and Infosys survived the recent recession. The organizational charts also help to create the organizational or the work breakdown structures.
- Types of organizational charts retrieved at PMBOK (Project Management Body of Knowledge, Version 3.0)