A Guide to Organization Chart & Structure for Businesses

Managing Organizations with Organization Chart & Structure

To effectively manage an organization, it is essential to rely on clear planning and organizational structures to ensure smooth operations and achieve organizational goals. In this article, we will introduce you to a key tool that helps improve organizational management: the "Organization Chart & Structure."

What is Organization Chart & Structure ?

The Organization Chart & Structure, also known as Org Chart, is a visual representation of an organization's management structure and hierarchy of positions. It helps to understand the distribution of authority, responsibilities, and roles of each department and individual within the organization clearly. Essentially, the Organization Chart acts as a compass that guides employees to better understand their roles, know who they report to, and collaborate effectively with others.

Types Organization Chart & Structure

Typically, organization charts come in various types, each suitable for different organizational structures and work formats. Here, we'll discuss three main types commonly used by many organizations:

• Hierarchical Chart: This is the traditional structure, displaying a top-down hierarchy. It's suitable for large organizations with clear departmental divisions and job roles.
• Flat Chart: This structure is horizontal, reducing hierarchical levels and emphasizing collaboration. It's suitable for small organizations with high flexibility.
• Matrix Chart: A blended structure where employees have both primary reporting lines and secondary lines reporting to project managers. It's suitable for organizations with cross-functional projects.

The Components of Organization Chart & Structure

• Hierarchical Levels: These represent the levels of authority within the organization, ranging from top executives down to operational staff.
• Departments/Divisions: Departments or divisions depict the segmentation of tasks and responsibilities according to different functions, such as Marketing, Accounting and Finance, Human Resources, etc.
• Job Titles: Job titles specify the positions and roles of each employee within the organization.
• Lines of Authority: These illustrate the relationships and reporting lines between superiors and subordinates, outlining the flow of authority and responsibility.

However, designing a good organization chart & structure should consider important principles such as clarity, comprehensiveness, avoiding duplication of roles, and effective communication. Additionally, there should be regular reviews and adjustments to the organizational chart to align with changes and expansions in the organization's future.

The Benefits of Using Organization Chart & Structure?

Help to clarify the organizational structure

• Employees understand their roles, responsibilities, and accountabilities: Because the org chart clearly shows what tasks each department is responsible for, who they report to, and who they need to collaborate with.
• Employees understand the hierarchy within the organization: Knowing who is who, who heads which department, and who has decision-making authority.
• Help employees work with purpose: When they understand their roles, responsibilities, and accountabilities, they can work with a purpose aligned with the organization's goals.

Enhance organizational efficiency

• Facilitate effective communication: A clear organization structure promotes efficient communication flow because it eliminates unnecessary steps and bureaucracy. This enables more effective communication among individuals within the organization.
• Promote coordination between departments or divisions: By illustrating how departments or divisions relate to each other, the org chart helps teams coordinate smoothly. It shows how they are interconnected, facilitating efficient collaboration.
• Accelerate goal achievement: When communication and coordination are efficient, teamwork thrives. This leads to quicker goal achievement as tasks are completed more effectively and efficiently.

Facilitate organizational growth

• Support organizational scalability: Having an organization chart & structure serves as a tool to assess the current state of the organizational structure and determine if the organization can expand further. If any areas of the structure require improvement to better adapt to market conditions and business needs, adjustments can be made promptly.
• Smoothen business expansion: With an organization chart & structure defining roles and responsibilities, each employee knows their responsibilities, reducing redundancy in tasks. This enables business expansion to proceed smoothly and efficiently, with minimal obstacles.

Assist in HRM (Human Resource Management)

HRM involves managing human resources, and designing an organization chart & structure aids HRM in the following ways:

• Facilitate workforce planning: The organization chart & structure provides HR with an overview of the organizational structure, allowing them to analyze workforce needs, plan recruitment, development, and retention strategies effectively.
• Enhance performance evaluation: A clear organization structure enables HR to set Key Performance Indicators (KPIs) and evaluate employee performance more accurately.
• Manage compensation: Having an org chart allows HR to establish appropriate salary structures and benefits packages tailored to each position within the organization.

Assist in HRD (Human Resource Development)

While HRM involves managing services, HRD focuses on the "development" of human resources, and organization chart & structure are equally beneficial for this aspect of work. For instance:

• Facilitate effective communication between HR and employees: In a company with a flat organizational structure, HR can choose communication channels that best fit the organization structure, such as email or MS Teams.
• Employees feel a sense of future with the organization: An Organization Structure conducive to development provides employees with opportunities for learning, skill development, and career growth, fostering a more conducive environment for personal and professional development compared to organizations with unclear structures.

Choosing the appropriate organization chart & structure depends on various factors such as the size of the organization, the nature of products or services, the business environment, and even the organization's strategy. Additionally, considerations should be given to interdepartmental coordination, power distribution in decision-making, and internal communication to ensure smooth operations and efficient goal attainment.

To improve the organization, it's crucial to start with internal management. And Jenosize can assist you! We offer "HappyWork," a human resource management system for HR and modern organizations. With features tailored to HRM and HRD tasks, HappyWork makes HR management easier than ever before. Try it for free today!