Organization Charts and their Uses

An organization chart is a diagram that visualizes the formal structure of an organization as well as the relationships and relative ranks of its positions.

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It can be a great way of showing detailed organizational hierarchies including defined employee profiles, departmental structure, new vacancies, newly hired employees and any recently added or re-structured departments.  A good Organization Chart importantly shows the most convenient way of interaction between different departments and members of staff.

Organizational hierarchy

Every organization, whatever its size, has an organizational structure of some sort.  These can take several standard forms and the various models have been categorized as follows:

  • Hierarchical structure (typical for the small, entrepreneurial organization)
  • Line-staff structure
  • Functional or Departmental structure (based on function, products/service, customer type, geographic region)
  • Matrix structure (dual reporting lines).

Which type is used by an organization will depend on the circumstances and the structure of the company, but any of these formal structures can be visualized by creating an organization chart.

Uses of an organization chart

Having an organization chart helps new employees understand what should happen within the firm, including responsibilities, communication channels and lines of authority. However, a traditional organization chart can sometimes struggle when trying to cope with the changing boundaries brought about by outsourcing, IT, strategic alliances and the network economy.  Using Microsoft Visio to create one allows the chart to adapt to changes of this nature, and as an out-of-date organization chart is not only not useless but can be detrimental, this is a critical feature.

Organizational structure

Organizational charts say a lot about the organization at a glance including responsibilities, communication channels and lines of authority.  These considerations should be taken into account when deciding on which structure to adopt.  An Organization Chart’s prime function is to help a business analyst effectively visualize the company structure as well as the division of works when performing business analysis.

Diagramming software

It isn’t necessary to indulge yourself in maze of defining organizational hierarchies and chalking-out structure when using software to create an Organization Chart, as you just need to specify the column & row headers, along with data you need to import and the Wizard will automatically create a chart for you.  Visio and other diagramming software will define organizational hierarchies with specified credentials of each employee, categorized in their corresponding departments.  It is even possible to accommodate large organizations by putting the shapes for each department, section or division on separate pages and linking them to a central overview page to simplify the process and make it possible for non-technical personnel to understand the structure.

Adding more details and editing chart

After the chart is created, it can be resized or moved to accommodate additional elements.  This makes it easy to re-structure the chart according to the latest departmental changes, the newest arrivals and departures in personnel and any mergers or changes due to market forces such as outsourcing.  You can add shadows, change the fill color of the boxes, and change the border and line styles in your organization chart.  Microsoft Visio has a huge range of additional formatting features, including Themes, Styles and Colour schemes that can personalize the chart, and a variety of different formats to make it easy to share.


When the USA was being developed and railways spread across new territories, additional miles of track were laid which made the railroads more costly to operate.  Effective planning and organizational structure would have reduced this, and in addition, the management who needed to ensure that the structure was managed efficiently would have benefited from using organization charts.

The organization chart symbolizes how Western industry has evolved from being a “one-man” enterprise to become a corporate body in which the creation of organizational capabilities is necessary for survival.  The main purpose of an organization chart is to show the hierarchy of departments and employees working in organization along with how they are interconnected and what the chain of command is.  The modern organization chart is not only a diagram, but also a reference used in other parts of the company or organization.

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