Did you know that organizational charts have been around for more than 150 years? You can draw on a comprehensive wealth of experience when creating it. Here you can find out how to do this step by step. The form in which you best set up your organizational chart depends primarily on your goals. What do you want to achieve with the graphical representation? In the beginning, there is the determination of the focal points. The perfect concept requires a thorough organizational diagnosis.
What is an organizational chart?
The definition of the term results from the individual parts of the word that make it up. ‘Organization’ and ‘diagram’ becomes ‘organization chart’. This is intended to show the structure of a company in a clear graphic form.
Synonyms for the term organization chart are, for example, structure, position, or organization plan. This already shows that the focus of such a diagram can vary. For example, you can focus on the tasks of the employees or the structure of the company. However, an organizational chart can also be used to show the current status of processes.
Planning an org chart depends on the purpose you want to achieve with it.
What is an organizational chart for?
The objectives of an organizational chart can vary greatly. Even if the graphic was created for a specific purpose, the overview can be used universally and is by no means tied to this one purpose.
Possible objectives can be:
- Discussion basis for employee appraisals on the subject of career opportunities
- Re-coordinate powers of different departments
- Plan reorganizations or strategy changes
- Review existing processes
- Positive presentation of the company to the outside world
The choice of the appropriate form of representation
Roughly speaking, an organizational chart aims to illustrate the structures, hierarchies, and responsibilities of an organization. The structure of the company can be seen at a glance. The organizational form is reflected in the graphic. The type of presentation is based on this.
The following organizational forms are possible:
- Functional organizations focus on the functions and tasks of each department, such as sales, marketing, or production.
- Divisional line organizations are subdivided according to areas such as products or customers.
- Matrix organizations combine both elements into one model.
- Project-related organizations align their structures with individual projects. The organizational form is flexibly adapted to the respective requirements.
- Customer-centric organizations are process-oriented. Here the core processes or the customer relationships of a company are the focus of the organizational chart.
The organizational chart illustrates the organizational structure
When building the org chart, you need to consider four important parameters that are important to the company structure.
In organizational research, a distinction is made between these four key design criteria:
- Specialization: Who should take on which tasks? How can the areas of responsibility be grouped into departments?
- Coordination: How can the various tasks and positions be coordinated in a meaningful way?
- Management system: Who has what powers within the various organizational units? Who Gives Instructions?
- Decision-making delegation: Who is assigned which decision-making authority? Who is liable as responsible? Where do authorizations end and must they be passed on to higher-level units?
In addition to the structural differences, you have the choice between structure and process for the organizational chart forms. The organizational chart shows the task structure of the organizational units. The flow chart is mainly about the sequence of work processes.
Process or organizational chart?
All organizational charts have in common that they represent company structures. The differences exist on the one hand in the focus of attention and on the other hand in the graphic representation.
| Organizational chart | Flow chart |
|---|---|
| The graphic documents the structure of the individual units. | The graphic documents the spatial and temporal sequence of processes. |
| The assignment of tasks in the respective departments is shown. | Suitable for displaying production processes. |
| The organization chart also shows the communication between the units. | The organization chart can trace every small step of a process. |
| The interaction of the different areas becomes clear in the illustration. | With this type of representation, the effort in terms of personnel or time can be assessed. |
| Vertical display | Horizontal display |
|---|---|
| Suitable for the visualization of hierarchies. | Suitable for visualizing areas of responsibility. |
| Competences, powers, and responsibilities can be illustrated vertically from bottom to top. | Especially with flat hierarchies, the distribution of tasks is presented more clearly. |
| The position of individual employees in a department can be illustrated in an additional bar chart. | The corporate structure can be broken down in detail within the organizational chart. |
This is how an organizational chart is created
When creating an organizational chart, you have many different design elements at your disposal. To ensure clarity, you should limit yourself to the essential features that are essential for a clear presentation.
Symbol
- triangles or rectangles,
- ellipses
- circles or
- diamonds
represent business units, departments, teams, or positions.
Links
Lines or arrows represent interrelationships and track communication channels.
Text elements
- names,
- Contact,
- Tasks,
- Place,
- key figures,
- characteristics or
- departments
are named verbatim and explained where necessary.
Image elements
Icons and photos of people or locations loosen up the design and create clarity.
By using different colors, you can make the structure of your organizational chart even clearer and emphasize certain elements. With a coordinated color scheme, you can also create references between individual building blocks, even if they are not directly next to each other.
Clarity versus detail orientation
When designing your org chart, at some point you have to ask the question of detail. How deep do you want to penetrate the structures, and how many factors do you want to include in your presentation? Of course, certain elements are essential for a clear message, but the less information your org chart contains, the clearer it will be. The decision for the detailed orientation is a tightrope walk between clarity and meaningfulness.
This decision raises the following questions:
| Persons | Do all employees of the company have to be listed in the organizational chart? |
| Depiction | What shapes (circles, triangles, arrows) best represent the purpose of the org chart? |
| External contact | Do customers and stakeholders have to appear in the organizational chart? |
Once these questions have been answered, the basic structure of the organizational chart can be determined. The individual elements require a sensible subdivision so that they can be displayed clearly
- Customers: Division into major customers, business or private customers, retailers
- Products: Type subdivisions such as standard, special, or mass products
- Tasks: Assignment of the main tasks to the individual departments
- Functions: Main and secondary functions as well as the management
- Relationships: communication channels and information exchange, the spatial proximity of cross-departmental organizational units
Before the organizational chart comes to the organizational diagnosis
If you want to meticulously plan your org chart, Organizational Diagnosis is the right tool for you. By doing so, you demonstrate both formal and informal rules within the system and relate them to your org chart. This makes it clear whether the presentation presents the processes and rules of the company.
The organizational diagnosis is a systematic analysis followed by a description of structures and processes in the company. Such an examination serves as a basis for organizational changes, a basis for personnel decisions, a determination of unused resources, an identification of innovation potential or the examination of the degree of efficiency of an organization. So you can’t create a better prerequisite for a perfect organizational chart.
You have now laid the foundations for developing your organizational chart. The following questions still need to be clarified:
- What purpose do you want to pursue with your org chart?
- Which target group do you want to address with it?
- What topic do you want to address with this?
- What aspect of your business is this explaining?
- What message should the organizational chart convey?
- What information are you trying to convey?
Once all facets have been illuminated and all aspects clarified, the selection of the elements and the form of your organizational chart begins. Once the external design is in place, it can finally be filled with content.
Create the organizational chart
Numerous software tools will help you to create your organizational chart. Extensive programs are available as well as open-source solutions. You can even create your org chart in Word. And it goes like this:
- Open an empty document. Of course, you can also integrate your organizational chart into an existing document.
- Click on the ‘Insert’ tab.
- In the ‘Illustrations’ menu, select the ‘SmartArt’ sub-item.
- A window opens that offers the selection ‘Hierarchy’ in the middle.
- Go on under the heading ‘Hierarchy’, where you will find a total of 13 different organizational chart templates to choose from.
- After selecting the desired template, you can start editing your organizational chart.
- You can change the respective captions by double-clicking on a text field.
- You have now created the basic structure of your organizational chart. Various functions are available for further processing.
- For example, if you click the ‘Add Shape’ button, you can position your fields however you like.
- Here you can also change the colors and adjust your layout again.
Example:
More complex organizational charts can be created, for example, with the Diagram Designer, which you can download for free. The software promises to make drawing organizational charts easier compared to the usual graphics programs. You can drag and drop icons and lines onto the drawing layer and edit them there. You label your fields, connect them, and adjust the size and color of the elements. This is how an organizational chart can be designed individually.
Alternative Organigraph
Modern companies are often so complex that it is too difficult to represent them in a simple organizational chart. Organography, as a more comprehensive tool with expanded options, is intended to remedy this. Additional elements such as nodes, nets, chains, or sets ensure an optimized display. Their goal is to create a detailed pathway map that reveals the multifaceted pathways people follow and interact with in their professional lives today. The more flexible org chart can extend the more static org chart.
Advantages and disadvantages of organizational charts
Of course, like everything in life, organizational charts do not only have advantages. Even if graphical representations can be very useful, some disadvantages should not be concealed.
Here is a comparison of the pros and cons:
Advantages
Structures and tasks can be presented easily The distribution of tasks and responsibilities are quickly apparent Communication channels can be quickly understood
Disadvantages
Complex structures can only be represented to a limited extent in the static organization chart Temporary units such as projects are difficult to represent Changes have to be laboriously added again and again