You can see the organization chart of a business as the backbone of the entire company which creates a clear link between the activity of the firm and the different levels of the authority system. Creating the organizational chart for a company it’s healthy and it is the very next thing to do after creating the business plan.

When creating a business, no matter its size, one of the things which you should create or define is the organizational structure. This point is necessary in order to have a healthy functioning business and it’s one of the ways to make clear who is the authority in that firm.

What is the organization chart of a business?

Creating the organizational chart for a company means creating a detailed graphical representation of the operation mode, based on the resources available (or needed/desired) to the company and on the vertical or horizontal subordination relations between the different entities that make it up (we are talking here about departments, but also about individual positions).

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Benefits of creating an organizational chart for a company

  • It defines the workflow vertically and horizontally
  • It highlights the firms’ objectives from managerial point of view. This means that it clears out the departments, positions and the main tasks and responsibilities for those positions
  • It establishes the right communication flow

The bottom idea of having or creating an organization chart of a business is that there are many benefits and it mainly helps you identify which positions are needed, how the dynamic of the company will be, how complex or simple it will be and how you will grow it.

Designing the organizational structure for your business

Depending on the specifics of each type of company, the organizational structure differs from one entity to another.

The organizational chart for a company is made by the manager, together with the director of human resources of the company and the managers of the departments. After preparation, the human resources department has the task of presenting the document to all employees and explaining to them how it will be applied.

In the case of a startup, if you don’t have a partner, it’s going to be mainly only you who will be creating and afterward presenting this chart to the future employees or current ones if you haven’t done this already.

The design of the organizational structure involves a series of elements. Among them, the analysis and correlation of some essential factors, such as the strategic plan that the company pursues, its legal status, the range of activities and resources to be controlled, the geographical distribution of resources and markets.

At the same time, the establishment of criteria for grouping the tasks is made on the basis of the vertical division (establishing the hierarchical levels) and the horizontal one (establishing the specialized tasks, respectively the design of the positions).

Other important elements needed in order to design the organization chart of a business are the design of the departments (by grouping the positions and establishing the relationships between them), establishing the interdependencies, and finally evaluating the functioning of the resulting organizational structure.

An organization chart can be changed at any time, depending on the current needs of the company, so if it is found that the current organizational structure brings limitations in terms of employee productivity and their ability to perform their duties, it can be adapted at any time.

Possible models of an organizational chart for a company

Given the various types of existing companies, the organizational chart should reflect as well and realistically as possible the structure and type of company. In this sense, you have a choice of several organizational chart models based on which you can structure your company.

Vertical organization chart (hierarchical)

If you have this type of organization chart in your company, this will look like a pyramid, in which the top person, the general manager, or the business owner, has the highest level of authority and has subordinates divided into departments.

Within this model, there is also the fan type organization chart, in which, at each management function, there are at most two compartments.

Horizontal flowchart

This flowchart model has a flat, side-by-side structure. Adopting such an organizational chart model creates a sense of independence among colleagues in the company.

At the same time, within this category, there is the circular organization chart, which places the management team in the center, and each segment corresponds to other segments of the circle that represent the name of the compartments.

Matrix flowchart

This flowchart model is a hybrid of the above. It does not place so much emphasis on authority and respect for a hierarchy. This kind of organization chart is used especially in companies where projects are carried out in which employees from all departments are involved.

So which is the best model of the organizational chart to implement for a company?

As you can see, there are several possible models of organizational charts for a company. Depending on the specifics of the company and the culture you want to promote within the company, you will have to choose one of these models (this does not mean, however, that this will be the one that will stay forever).

Regardless of the chosen model, it is necessary for both the managers of the company and the employees to know their role and the tasks they have to fulfill and to do everything for the company and the business to be one that grows, has satisfied customers and is profitable.

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