The Importance of an Organizational Chart


Organizational Charts, often known as Org Charts, are graphic representations of the structure of a company. These charts clearly illustrate an organization’s structure and highlight the ties shared by each individual employee. These insights assist employees in determining who to report to and verify that managers are correctly allocating duties and responsibilities among their team members.

The book E-Myth Revisited by Michael Gerber shows that organizations which use interactive and actionable Organizational Charts, receive lots of new, additional benefits that boost productivity and streamline communication.

Carry Out Administrative Duties

To begin, Organizational Charts enable executives and managers to execute administrative activities, while also viewing organizational demands at a glance from a single page. Such users can examine open opportunities, apply for such openings, complete performance reviews, file remedial actions, and more. In fact, executives and managers may speed up activities that normally take a lot of coordination - and back-and-forth communication - by conducting these actions directly from the Organizational Chart.

Clearly Show the Chain of Command

It’s easy to lose track of the line of command in firms with hundreds of people. Understanding the chain of command within a company is critical for identifying who to report to when various scenarios emerge. Employees can use organizational charts to easily identify all team leaders inside of their organization. By making this information available to all employees, the amount of time spent deciding who to pass information on to is reduced.

Recognize the Needs of Your Workforce

Organizational Charts make it simple for executives to understand labor demands, by providing a bird’s eye view of their staff. Executives can assess which areas need more people and which departments are overstaffed. This knowledge makes it easier for managers to balance their teams and ensure that they have enough people to meet their goals and objectives.

This article is part of our
Business Coaching blog series. At Dataczar we talk to a lot of small businesses. We’ve found a few books that we keep recommending time and again. To better help our customers, we’ve added a Reading List for Small Businesses to our website. We encourage every small business owner to read and keep these timeless business books on their office shelf.