5 Types of Organizational Charts To Help Improve Your Business

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In this day and age, the organizational chart is a crucial aspect of business planning. It is so vital that it can structure successful businesses with quality corporate goals. As a result, using an organizational chart has become a commonplace practice in any industry.

However, not everyone is a master of creating an org chart. Fortunately, there are available online tools like Venngage to help aid you in this task. In no time, you can create a structured org chart using ready-made templates and the Venngage diagram.

Without further ado, here are five different types of organizational charts used by most corporations today:

The Traditional Organizational Chart

This type of organizational structure is quite popular among companies that possess hundreds or thousands of employees. Typically speaking, this formalized plan typically involves dividing staff members into departments and sub-departments for easy governance and management purposes.

Take a look at this sleek Venngage traditional organizational chart, for example:

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This traditional approach works exceptionally well for large-sized corporations with numerous employees and departments.

Of course, this type of organizational chart is not without its limitations. It typically requires a significant amount of time and effort to create and maintain. Thus, creating an org chart that is both functional and accurate can be challenging for many companies.

The Advanced Organizational Chart (AOC)

More recently, there has been a growing increase in the number of small businesses adopting the advanced organizational chart. They utilize this company organization chart as their primary business planning strategy. 

To explain, the AOC uses the traditional organizational chart as a baseline. However, it adds three other components:

The job descriptions contained within this type of organizational chart are quite often unrealistic. They are there to give employees an idea of the requirements needed in their new position.

This advanced organizational chart uses exceptionally professional language when describing each role within the business structure.

Firstly, instead of dividing staff members into different departments, the AOC divides employees based on roles and responsibilities. Secondly, each role comes with unique job descriptions that are both realistic and highly detailed. Finally, the AOC utilizes a clear communication structure that details the handling of communication inside the company.

However, note that most senior roles within an organization typically use only approximately 25% of their time on these primary tasks. The other 75% gets spent carrying out non-essential tasks not mentioned in their job description. As such, companies need to reevaluate any newly developed role before putting them into practice.

The Matrix Organizational Chart

As previously mentioned, the organizational chart is relatively easy to read. However, this fact also makes it rather simplistic. As such, many companies find that they rely on third parties to create a functional organizational structure.

For example, a company possesses employees based in three different countries (e.g., the other one is China). Using a traditional organizational chart would make it difficult to track any progress taking place within each department. Performing this would require costly research tasks.

Thus, instead of reinventing the wheel, these organizations typically utilize matrix organizational charts. It’s thanks to their versatility and flexibility when dealing with business issues (especially global ones). The matrix organizational chart uses “matrices” to organize staff members based on their location and role within the company.

Below is a Venngage template you can modify to fit the matrix organizational structure:

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Further, a matrix organizational chart is suitable for any corporation, regardless of size. It is especially beneficial for corporations with offices or branches located in two or three different locations throughout a country. This type of organizational chart allows them to look into how well each department is performing without extra costs.

The C-Level Organizational Chart

In today’s business world, there are typically four major corporate positions. The President/CEO, the Vice President (VP), the Chief Technology Officer (CTO), and the Chief Financial Officer (CFO). In addition, four other C-level positions serve as a form of liaison with the CEO. These positions include:

COO, who acts as a liaison between the CTO and the CEO. The Chief Strategy Officer (CSO), who acts as a liaison between the Chief Marketing Officer (CMO) and the CEO.

The Chief Human Resource Officer (CHRO), who is responsible for all human resources related to company-wide policies. Lastly, the Chief Compliance Officer (CCO), who ensures that the organization is properly following laws.

As seen from this list, many of these roles aim to bridge communication barriers within companies. In fact, reports say that one of the biggest inefficiencies within organizations is poor communication.

Furthermore, this type of organizational chart allows corporations to evaluate how various teams are working together. It enables them to track teamwork in solving problems and completing projects more effectively.

The Functional Organizational Chart

Opposite to using a matrix structure, some companies use functional organizational charts due to their increased ability to adapt. Most importantly, they are especially beneficial for large companies that employ thousands of staff members. It divides the employees based on what they do rather than where they work. 

Organizations who opt for this type of organizational structure typically do so for two reasons:

●  Primarily, this type of organization gives all employees equal footing within the company regardless of seniority or gender. By ensuring that all members receive the same treatment, organizations can reduce management costs and increase overall employee happiness.

●  Secondly, this organizational structure allows employees to specialize in their particular field while contributing towards a company-wide cause. For example, an administrative assistant highly skilled in computer graphics may often get asked to design handouts for various purposes.

We refer to this form of cross-training as “horizontal training.” It allows experts within a certain field to share their knowledge with others. Furthermore, it increases the general quality of a company’s services while still increasing efficiency due to their shared knowledge base.

Below is an excellent template from Venngage that you can use to create a functional business organizational chart:

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However, there are inevitably some drawbacks behind functional organizational charts. It mainly revolves around causing employees to feel alienated among their group of peers.

It is especially true if the company they are working for has a large number of staff members. As a result, it can be difficult for employees to stand out when establishing themselves in new social circles.

Now that you have identified the different types of business organizational charts, it’s time to make a choice! Whatever you choose, rest assured that Venngage will guide you throughout the entire designing process. Good luck!

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