What Is an Organizational Chart?

An organizational chart is a diagram that visually conveys a company's internal structure by detailing the roles, responsibilities, and relationships between individuals within an entity. Organizational charts either broadly depict an enterprise company-wide or drill down to a specific department or unit.

Organizational charts are alternatively referred to as "org charts" or "organization charts."

Understanding Organizational Charts

Organizational charts graphically display an employee's hierarchical status relative to other individuals within the company. For example, an assistant director will invariably fall directly below a director on the chart, indicating that the former reports to the latter. Organizational charts use simple symbols such as lines, squares, and circles to connect different job titles that relate to each other.

Types of Organizational Charts

Organizational charts are constructed in three main formats.

Hierarchical

This most common model situates the highest ranking individuals atop the chart and positions lower ranking individuals below them. For example, a public company typically shows shareholders in the highest box, followed by the following in descending vertical order:

  • Chairman of the board of directors
  • Vice chairman of the board
  • Board members
  • Chief executive officer (CEO)
  • Other C-suite executives (joined to one another by horizontal lines)

Other job titles that may follow c-suite execs include:

  • President
  • Senior vice president
  • Vice president
  • Assistant vice president
  • Senior director
  • Assistant director
  • Manager
  • Assistant manager
  • Full-time employees
  • Part-time employees
  • Contractors

Organizational hierarchies generally depend on the industry, geographical location, and company size.

Flat

Also known as a "horizontal" chart, the flat org chart positions individuals on the same level, indicating more power equality and autonomous decision-making ability than is typical with employees in hierarchical corporations.

[Important: There is no single correct way to fashion an organization chart, as long as it situates principal officials, departments or functions at the top of the page, with the others below, in descending ranking order.]

Matrix

This more complicated organizational structure groups individuals by their common skill-sets, the departments in which they work and the people they may report to. Matrix charts often interconnect employees and teams with more than one manager, such as a software developer who is working on two projects—one with his regular team manager, and another with a separate product manager. In this scenario, the matrix chart would connect the software developer to each manager he is working with, with vertical lines.

Key Takeaways

  • An organizational chart is a diagram that visually conveys a company's internal structure by detailing the roles, responsibilities, and relationships between individuals within an entity.
  • Organizational charts either broadly depict an enterprise company-wide or drill down to a specific department or unit.
  • Most org charts use the "hierarchical" model, which situates the highest ranking individuals atop the chart and positions lower ranking individuals below them.

Regardless of a company's structure, org charts are extraordinarily useful when an entity is contemplating restructuring its workforce or changing its management complex. Most importantly, org charts let employees transparently see how their roles fit into the overall company structure.