What is a business organization chart?

A company's organizational chart is an essential visual representation tool for understanding how a company operates. It highlights the hierarchical and functional structure of the organization through its different services, departments or teams. There business management must respect this organization chart.

Concretely, an organization chart details the positions, the links between them with the levels of responsibility, from general management to operational teams. We typically find the distribution between support functions (human resources, finance, legal, etc.) and operational functions corresponding to the core business.

Depending on the size of the company, the organization chart can be more or less complex. Startups generally start with simple structures, while large multinational groups have very developed organizational charts.

Whether functional, matrix or divisional, the organization chart provides very useful insight into the internal functioning of an organization. It constitutes a practical tool to better understand the distribution of roles within the company.

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🥀 Elements that the organization chart of the company must have

First, mention that your flowchart doesn't have to have all of these elements, we're just providing you with an example that may be helpful when preparing your own. In addition, each company has its own structure and needs and, depending on these, we will illustrate it in one way or another.

Here we leave you some of the key elements that this organizational scheme can include.

1. Company General Management

This group of people is responsible for making the decisions that affect the business the most. In addition, many processes go through them, they ensure that all departments work as they should and achieve the objectives. They are the ones who control the heads of other departments below them.

2. Middle managers

As their name suggests, they are placed in the middle of the senior managers and the rest of the employees of the department for which they are responsible. They are the ones who decide on the actions that will directly affect the company.

This is why it is important that they are coordinated between the different middle managers as well as with their subordinates, because communication in this area of ​​the company is essential.

3. Operating personnel

It is the employees who carry out the actions assigned by the supervisors. That is to say, they are in direct contact with the functions of the company. Of the distribution, provision of services, production or other functions that may be performed.

This group of workers will spend more time performing actions that have been requested or at least approved by their supervisors.

4. Support staff

This group of workers, in some circumstances, do not belong to the company, but rather provide support but are contracted out. Make no mistake about it, in the same way we need to include them in our flowchart.

In other words, it is a group of employees who carry out a specific activity that is essential for the performance of the company to be more optimal.

🥀 Should all organizations have an organizational chart?

The answer is clear, having an organizational chart has various advantages, which we will see later, and no apparent disadvantages. Having an organizational chart where all the workers appear is very useful to be able to clearly and quickly visualize the internal structure, the departments and the different roles that each team and each person has.

In addition, it will allow the employees themselves to have better internal communication, since they will know more easily who to contact according to their needs.

This organizational scheme can also be useful for other stakeholders such as customers, suppliers, shareholders, etc., as it can save them time when they need to contact certain groups of people.

Not only that, organization is essential to improve the accomplishment of daily tasks, which will have an impact on business objectives. In fact, it is advisable to prepare it once the business starts its activities, as well as to include it in the business plan.

It also has a great role for new collaborators who join because, at the beginning, they may have doubts about the services with which they should interact. Finally, let us mention that the organization chart is a living tool, that is to say that it must be updated as the distribution of teams evolves.

🥀 Benefits of a business flowchart

1. Analysis of functions and coordination

Thanks to this diagram, you will be able to easily analyze each of the collaborators, their functions and have a global vision which will help you to coordinate them between them. In this way, being able to understand who performs each function, who must supervise each function and which function depends on others.

It is much easier to organize the business, detect possible needs and easily know who we should contact at any time if a task has not gone ahead.

2. Helps to better define goals

With the flowchart, you can quickly understand what goals each department should achieve and track their achievement, as well as any deviations that may occur that ultimately can be redirected with actions.

3. Transparency in internal promotion opportunities

For employees, it is a good tool that allows them to easily visualize promotion paths within the organization. This way, they can feel motivated and want to progress.

4. Facilitates the distribution of tasks within the department itself

For the head of department, it will be much easier to distribute the various tasks to be carried out and to be able to distribute them according to the experience and training of each employee. The middle manager will be able to do this both in general tasks and in more specific tasks.

5. Detection of defects in the structure

The organization chart allows us to see if the processes will develop correctly, taking into account the people and their functions. This will help us visualize if there is a need to incorporate more staff, if there is a task that is not covered or if there are overlapping functions in different departments.

🥀 Types of org charts by organization

Organization chart

This type of organizational chart is generally the most recurrent within companies. It is organized from highest to lowest, i.e. from highest to lowest power, and is useful for understanding who reports to whom.

This diagram is visually very clear but it is true that it is stricter when it comes to determining the functions of each employee.

Matrix organization chart

This type of plan is common in companies that have multiple directors, multiple project managers, or multiple department supervisors. Its advantage is that it allows relationships between services to be integrated in a simple manner and facilitates the understanding of joint projects. in the management different responsibilities.

Flat flowchart

This flowchart is not recommended but may be used by some companies. It consists of eliminating all the middle managers and leaving, in the form of a plan, the managers and the rest of the employees.

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