Organizational charts explained: a beginner’s guide

An organizational chart maps out a company’s workforce, including its team structure, workers’ reporting relationships and employees’ responsibilities.

Done well, an org chart can be a lot more than just a map. A good organizational chart (org chart) can streamline business processes and help employees excel in their roles. It can be a resource for support, collaboration and team building.

Read on to take an in-depth look at org charts and to learn how to make a successful one for your company.

What is an organizational chart?

You might hear organizational charts referred to as org charts, organograms, organigrams or hierarchy charts. They all essentially refer to the same thing: a visual representation of a company’s internal structure.

An org chart maps out the employees within an organization, grouping them by team and showing how employees relate to each other.

Org charts illustrate reporting relationships and chains of command to give a simple overview of a company’s organizational structure, its hierarchy and how each employee fits into the big picture.

What should an org chart include?

An org chart contains information on verticals, teams, reporting relationships and individual employees. For each employee, an organizational chart might show their:

• Name
• Photo
• Contact information
• Job title
• Responsibility

The chart may use lines, arrows and other symbols to illustrate professional relationships and hierarchy among individual members.

Why are org charts important?

An org chart gets new hires up to speed, keeps longtime employees informed and builds confidence among investors. Having an organizational chart is particularly handy for companies with remote workers because it maps out the whole distributed workforce, including each remote employee’s role and the overall chain of command.

Any employee should be able to turn to the chart to answer questions such as:

• Who’s on the leadership team?
• How do I fit into my company’s organizational structure?
• Who can answer my questions about (insert specific subject)?
• Who reports to whom?

Organizational charts should also tell employees how downsizing, promotions and other organizational changes might affect them. When it’s designed well, a chart can even communicate a company’s values and philosophies, such as its positions on inclusivity, collaboration and hierarchy.

Limitations of organizational charts

• Org charts can easily become outdated as companies restructure and employees shift roles
• Charts may only show formal reporting relationships, excluding the nuances of informal professional relationships within a company
• Updating an org chart can be laborious, complex and time consuming, depending on the tool used to create it
• Organizational charts may not clarify management styles, communication methods and how each manager interacts with their team

Types of organizational charts

We all know how powerful graphics can be. A picture is worth a thousand words, right? (Well—if you use the right picture.)

To get the most out of an org chart, you must first decide on its design and how to visually represent your company’s organizational structure.

Hierarchical/top-down

This type of org chart starts with one person—typically the company’s president or CEO—at the top. It then takes on a pyramid shape that represents the workforce hierarchy. The higher you’re represented on the pyramid, the higher you are in the hierarchy.

• Pros: This format offers clarity on the lines of authority and communication. Employees can easily understand their roles, teammates and reporting relationships. A hierarchical org chart also provides employees with a defined path for professional growth.
• Cons: This structure offers limited flexibility in terms of hierarchy and may create silos that could hinder cross-functional collaboration and innovation.

Divisional structure

This layout is similar to the hierarchical chart but breaks down a large company’s structure by product line, geographic location or another grouping method. Large companies with independent departments that control their own resources often use divisional structure charts.

• Pros: Divisional structure provides more flexibility to respond to market changes. It also gives more autonomy to each division within a large company.
• Cons: Like top-down org charts, divisional structure charts could lead to siloing, hinder cross-functional collaboration, and make it difficult to spot duplication or overuse of resources.

Matrix

A matrix org chart uses a grid to show relationships among cross-functional teams. This layout illustrates how employees work with others from different departments and how they report to multiple supervisors. It gives managers visibility to select people from different departments to work on a project.

• Pros: This structure helps break down silos and foster cross-department collaboration.
• Cons: Reporting to more than one manager or business unit can create confusion or conflict among employees.

Flat/horizontal

A flat or horizontal organizational chart takes the focus away from employee hierarchy. All members have a similar amount of power, with fewer hierarchical levels in the company. This design is most common among small businesses with simple structures, where employees often have more responsibility, wear many hats and are more directly involved in decision-making.

• Pros: This approach encourages closer relationships between executives and employees and empowers all team members to take leadership and be decisive.
• Cons: Companies have limited potential to scale within this structure. As organizations grow, they often move to hierarchical or matrix org charts.

How to create an organizational chart

Let’s run through the step-by-step process of creating an org chart for your company.

Determine your company’s organizational structure

Clarify your organization’s structure before you begin building a chart. Lay out how your company’s departments relate to each other on a high level.

Identify roles and relationships

Understand your company’s chain of command. Identify each employee’s span of control, and outline each business unit’s specialization. Then, map out reporting relationships among all employees. You can gather this information by surveying team members or working with the HR department.

Choose the right organizational chart type

Now that you understand your company’s structure on both a high level and an individual employee level, it’s time to pick an org chart design.

Your chart should mirror the organization’s reporting relationships, reflect decision-making processes, and comply with the company’s size and growth plan.

Know your audience

Understanding the audience for an org chart can help you decide how much detail to include. For example, an org chart containing details on each individual in the company may be limited to internal use. A simplified, high-level version might be more suitable for external parties.

Best practices for designing org charts

Keep your org chart simple, uncluttered and easy to understand. Use shapes, colors and line styles to distinguish hierarchy, relationships and process flows.

Highlight key roles and functions to help readers quickly identify critical personnel and understand the company’s organizational structure. Regularly update the org chart as the team and structure evolve. An outdated chart could cause confusion and errors.

Best tools and software for creating org charts

Various tools and applications can help you build and maintain an org chart. Any tool you use should integrate with your company’s existing productivity platform to ensure that everyone has access to the org chart for efficient communication and collaboration.

• BambooHR works well for small businesses and HR departments
• ClickUp incorporates an org chart tool into its management platform
• Deel lets users apply filters to understand how teams work together and who can answer their questions
• Lucidchart offers intuitive features and is best for large organizations
• Slack Atlas uses profile pictures, location information and fun facts to build a well-rounded portrait of each member of a Slack workspace.

How to use an org chart

A good organizational chart promotes collaboration and makes it easy for colleagues to find and understand each other’s roles. You can use a well-made org chart to:

• Onboard new employees: Demonstrate employee responsibilities and reporting relationships to new hires
• Manage growth and change: Visualize how teams grow and interact to inform hiring decisions
• Improve clarity: Understand how employees fit and interact within their company’s organizational structure
• Enhance communication: Empower team members to ask questions and take initiative by providing a deep understanding of various roles and reporting relationships
• Facilitate resource allocation: Allocate resources based on team structure and capabilities
• Streamline processes: Identify redundancies and inefficiencies in the organizational structure

Maximizing the power of organizational charts with Slack

Organizational charts do more than map out a company’s workforce. They can provide powerful context to help employees collaborate and communicate effectively.

Providing context with Slack Atlas

Slack Atlas uses profile pictures, location information and fun facts to build a well-rounded portrait of each member of a Slack workspace. Employees can use Atlas to learn about a colleague before direct-messaging them on Slack. Informing employees about one another helps build strong professional relationships in remote workplaces, boosting both morale and productivity.

Integrating organizational charts in Slack

Atlas provides searchable profile information and a dynamic org chart to encourage connection and promote transparent collaboration in Slack. Employees can learn about their colleagues and their company’s organizational structure right in Slack, where they’re already working.

Tracking org chart changes and updates in Slack

Atlas syncs with HR tools to populate employee information via Slack’s SCIM API, ensuring that every profile stays accurate and up to date. Workspace administrators can make specific profile fields editable for employees to add their unique spin.

Org chart security in Slack

When you’re handling employee information, data security is a must. Atlas uses the same enterprise-grade security and identity-management capabilities central to the Slack platform, focusing on security governance and risk management. 

The power of an org chart at your fingertips

Slack Atlas is available in all markets and languages supported by Slack. You can access Slack Atlas on the Enterprise Grid plan at no additional cost. It’s also available as a paid add-on to the Business+ plan. Learn more and start using Atlas today.