Learn All About 7 Types Of Organizational Charts And How To Use Them

In this blog, we’ll cover:

What Are Organizational Charts?
Why Do We Need An Organizational Chart For Our Business?
7 Types of Organizational Charts You Should Know
Examples of Org Chart Templates & A Free Org Chart Template

Organizational Chart definition

Organizational chart templates are a vital visual representation of your company’s, project’s, or business unit’s internal structure. It’s a diagram that illustrates rank, responsibility, including information flow in your company and paints a detailed picture of the internal structure of a business. Org charts, like trees, are spread out into supplementary branches and leaves that define each individual’s role in a company. Org charts have a variety of uses and can be structured in many different ways. They might be used as a management tool, for planning purposes, or as a personal directory.

Organizational Charts are also known as Organograms, Organogram Charts (sometimes spelled Organigrams), and Hierarchy Charts. They’re all the same thing.

Why do you need an organizational chart for your business?

There is a multitude of benefits to creating an org chart for a business of any size.

First and foremost, it establishes authority and strictly enforces the expected communication routes within the organization. This prevents miscommunication and helps employees understand where they are in the hierarchy of the company.

With Organizational Chart Templates, there is complete transparency and 100% clarity to everyone in the company to be on the same page in terms of who is responsible for what, and how should be the information flow within the organization. Documented organization structures also double as a roadmap for current employees to see where their next promotion maybe, improving employee motivation. Additionally, companies that restructure their hierarchy owe it to their current employees to be transparent and upfront about changes in communication and authority by illustrating those changes with a new org chart.
Often, small businesses choose not to create an organizational chart because the employee count is low, or because it seems like a waste of time in comparison to core business functions. In reality, organizational charts for small businesses are a way to future-proof your business as it scales, ensuring consistency and a concrete document to refer back to in case of confusion.

7 Types of Organisational Charts you should know (Includes organizational structure examples which you can download)

Line organizational structure chart

Also known as scalar-type organization structure which shows how the authority flows from the top-most position to the lowest. One of the major disadvantages of the Line Organization structure is that it usually suffers from a lack of expert advice. If the line manager has trouble making a decision, there is no expert staff that he can turn to. Also, the line organization is usually rigid and inflexible. Therefore, typically Line Organization structure is useful where the scale of business is small and the number of subordinates and superiors are few or they are found useful in organizations where primary work is routine in nature which could be highly automated environments where specialized skills are not needed.

Free Line Organizational Structure

View Free Line Organizational Structure
Line organization structure chart tends to simplify and clarify responsibility, authority, and accountability relationships. In a line organization, authority follows the chain of command.

Staff or functional authority organizational structure chart

A functional Organisational chart is one of the organizational structure types which organize staff based on their specific skills and knowledge. In a functional organization structure, the entire organization is divided into smaller departments based on their specialization. For example, an organization structured around functions will have a finance department, an IT department, a marketing department, etc. The departments are managed by experts in that area. This allows for greater efficiency in the work of the employees.

Functional Organizational Chart

View Functional Organizational Chart
So every department has its own head or executive. And the reporting structure can also differ from department to department.

Line and functional Organizational Chart Templates

Most large organizations belong to this type of organizational structure.

Line and functional organization is a combination of line organization structure and functional organization structure. The line Organization structure focuses excessively on authority, and the functional organization divides the firm into various functional departments. To avoid the limitations of both the structures, most of the organizations follow the line and functional organization structure.

In this structure, the authority flows from the top down. The line manager is the one in charge. He is the one with the authority to make all the important decisions of the company. The functional managers are the expert in this scenario. They have the knowledge and expertise of their field and are there to assist their line managers. They have an advisory role in the firm. One of the main advantages is that line managers receive expert advice from functional specialists. So they can leave the planning and research to the experts and concentrate on the execution of the plan.

Line and functional organizational chart

View Line and functional organizational chart
In a line and functional organization structure, both the line managers and the functional managers have their own important roles to play.

Matrix Organizational Chart Templates

Matrix organizational structures are quite popular, as they emphasize efficiency, creativity, and innovation. They combine two or more organizational structures.

Matrix organizational structures are so named because reporting relationships resemble a grid (or matrix) rather than the typical hierarchy. This structure can be thought of as a combination of the functional and projectized approaches of organizing employees in the company. Typically team members report to more than one boss: the head of their department, and the project manager charged with overseeing a specific initiative. RACI chart templates are a popular organizational matrix.

One of the major advantages of this organizational structure is the ease of communication between various departments which often leads to more collaboration, and better, stronger organizations.

Matrix Organizational Chart

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Also, matrix organizational structures foster employee development as employees work cross-functionally with various departments so are exposed to multiple project types and ways of thinking.

Divisional Organizational Chart Templates

The divisional organizational structure organizes the activities of a business around geography, market, or product and service groups. Large corporations, especially large multinational corporations, utilize a divisional structure. This approach is useful when the company has multiple regions or products. The divisional organizational structure provides a great deal of flexibility because each division operates separately and focuses on the most pressing issues facing it rather than being trained by a central authority.

Divisional Organizational Chart

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For each division, there is advertising, sales, production, clerical, accounting, and development staff of its own. This gives a very brief view of the organizational structure.

Project Organizational Chart Templates

A project organization structure facilitates the coordination and implementation of a specific project or product activity. This design uses teams of specialists from different functional areas in the organization which helps in achieving specific results.

A project team chart is a visual diagram to show the team members their roles.

Project Organization Chart

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It helps to understand the relationships between team members, the structure of the project organization, and their relative power positions.

Committee Organizational Chart Templates

A committee organizational structure chart can be defined as a group of members who discuss and develop strategic solutions to problems.

The objective of setting up the Committee is to develop broader organizational goals, finalize plans, and policies for the organization. Such committees are important as the members of the committee bring rich experiences, expertise, diverse perspectives, and information which are not one man’s job.