What Is an Org Chart? Types, Benefits, and How It Works

Knowing who’s who and who reports to whom in a company can be tricky. 

You may find yourself working closely with an employee only to not be one hundred percent sure who their manager is, what subteam they’re officially a part of, and what responsibilities are on their plate.

Having this information can ensure better communication with these team members, set realistic expectations, and help build rapport. All of these details and more can be found in an organizational chart.

• What is an organizational chart?
• Pros and cons of using an organizational chart
• Types of organizational charts
• How to create an organizational chart
• Uses of organizational charts
• Get started with Fellow

What is an organizational chart? 

An organizational chart, also sometimes just called an org chart, is a visual representation or diagram of a company’s internal structure. Company organization charts show how teams and departments are organized, depict who is managing which employees, and showcase relationships across an entire company. They can be broad, showing the entire organization from the chief executive officer (CEO) to the summer interns, or department specific, highlighting just one area and its hierarchy. 

These charts are especially helpful as they show who is responsible for which team, make it easier to visualize hiring, staffing, or promotion changes, and allow everyone to understand the chain of command.

Pros and cons of using an organizational chart

No matter how big or small your company is, there are many benefits to using an organizational chart.

For starters, a huge pro is that they help all employees understand your company hierarchy. For managers, an org chart helps visualize how teams work together and where everyone sits in the company structure. For employees, the org chart shows to whom they need to report on projects. This chart clarifies everyone’s role in the company and provides a big picture of the general structure, which, in turn, helps improve communication if a question or concern needs to be raised.

There are some cons of org charts to keep in mind, too. For instance, they can quickly become outdated, so it’s important that when team structures change, these charts get updated as soon as possible. Additionally, they may not always show the full picture, as these charts can sometimes paint a misleading picture of the importance or influence of people at your company.

Types of organizational charts 

If your company is looking to create an organizational chart, there are a few different types to choose from. Some of these types are:

• Hierarchical
• Matrix
• Flat
• Divisional

Hierarchical

Sometimes called a top-down chart, a hierarchical org chart starts at the top and works its way to the bottom, meaning the top of the chart will have one team member—usually the CEO or president. Then, it’ll feed down to other employees based on their roles and have branches for each department and sub-team.

For example, beneath the CEO may be the chief marketing officer, chief financial officer, vice president of sales, and so on. Under each of these employees will be the directors of each department, their corresponding teams, senior managers, and full-time employees. 

Matrix

There’s also the matrix org chart, which shows cross-functional teams and team members who often work closely with colleagues in different departments and report to more than one manager.

This structure is more complex than a hierarchical chart, but it makes it easier for managers to pick employees on different teams or within other departments to work on specific projects or contribute to brainstorms. 

Flat

A flat org chart is a horizontal org chart, meaning it shows few or no levels of management, which helps to promote self-management and decision making from each team member. It also inspires less supervision from management and more involvement from their employees.

While this type of org chart can empower employees, it can be difficult to scale as a business grows. Because of this, a flat org chart is often used for smaller companies that don’t have a strict chain of command. As more departments develop within a company, it’s common to transition from a flat chart to a hierarchical org chart.

Divisional

There’s also the divisional chart, which divides the company based on specific details or criteria. This type of chart could be organized by products, markets, or even geographical locations and regions.

Each division or subgroup in the chart can operate like its own smaller business or branch within the company, and may even have its own sales, IT, or marketing teams. These structures are best used by larger organizations with areas that work independently. 

How to create an organizational chart 

Ready to create an organizational chart for your company? Here’s how to get started.

• Define the scope
• Gather relevant information
• Choose a format
• Input the appropriate structure
• Identify relevant relationships
• Share it with the entire company
• Keep it up to date

1Define the scope

The first step in creating an org chart is to define your scope. This is the why for creating the chart in the first place. Will it be used as an internal reference point for employees so they can better visualize the structure of each team? Or will it be primarily used for management to pinpoint areas of improvement and growth?

Knowing the purpose of the org chart ensures that you include the right information and structure it properly.

2Gather relevant information 

Once you’ve pinpointed the purpose, collect the information you want to include in the chart. This will include identifying all employees within the company, their roles, to whom they report, and their responsibilities. 

Consider using an organization tool to keep all of this data organized as you go.

3Choose a format

Whether you choose one of the types listed above or you decide on a different type of org chart, choose the format that best suits your company structure. 

Looking for one that showcases a functional top-down chart? Go with the hierarchical structure. Need more flexibility? Consider the flat chart.

4Input the appropriate structure

Once all the information is ready to go, add all the employees to your chart. Include as much information as you think is necessary or that you have on hand.

Some companies only include the basics, like names and job titles; however, you could add more details, like contact information (email address and work cell phone numbers), headshots, location (ideal for hybrid companies to show timezones), and even birthdays or work anniversary dates.

5Identify relevant relationships

After all teams and departments are structured accordingly, it’s also useful to identify relationships within teams. This information will make it easy for all employees to familiarize themselves with their own team and other departments and determine how to better work with others within the overall hierarchy.

6Share it with the entire company

Once all the hard work is done and the org chart is complete, it’s time to share it with the entire company and all relevant stakeholders. Encourage employees to inspect the org chart for accuracy and ask for feedback, too. Wherever it’s stored, make sure it’s accessible to all employees at any time–you never know when this information will come in handy. 

7Keep it up to date

No company structure is set in stone–and things can change fast! New employees are hired, current team members get promoted, and some will eventually part ways. For the chart to be useful and relevant, it needs to be updated when these changes occur. 

Uses of organizational charts 

Now it’s time to put the organizational chart to use. Below are five common uses for these charts.

• Restructuring: When employees within teams or departments switch roles or receive promotions, the org chart can help ensure everyone’s talents and strengths are properly used.
• Workforce planning: When a new hiring initiative is underway, these charts can help managers and HR teams identify gaps and other hiring needs.
• Resource planning: This includes reducing inefficiencies by rearranging roles within teams.
• Improving communication: These charts can help employees know who reports to which manager and make it easier to get to know other team members across the organization. Adding employee photos can help a lot in improving communication, especially for hybrid or fully remote companies, since they allow people to connect faces and names.
• Visualizing project structure: A project org chart structures all relevant details of an upcoming project. It allows project managers to see each person’s role, the hierarchy of everyone on the project team, and the chain of command regarding everyone’s responsibilities.

Get started with Fellow

A well-structured organizational chart can help businesses become more efficient, stay connected, and remain informed—and if you want to take all of this one step further, consider using a tool like Fellow for more effective meetings, better meeting habits, and centralized feedback that integrates across your existing tools.

Plus, teams using Fellow can automatically send post-meeting recaps to keep everyone within an organization updated with all the latest information. You can also access multiple useful templates to support you before, during, and after a meeting.

Explore Fellow’s blog to learn more about how you can start making meetings more productive.