Company organisation chart: the keys to a clear, high-performance organisational structure
A good organisation chart is like a GPS for your company. You'll be clearer and your teams won't get lost! 🎯
A company organisation chart does more than just show "who does what". It's a strategic tool that optimises internal communication and enhances transparency. And if you think that only large groups like Amazon need one, think again.
From small start-ups to global giants, every organisation has everything to gain from structuring its relationships properly. Let's find out how you can use this tool to transform your day-to-day management.
What is a company organisation chart?
Corporate organisation chart: definition
A company organisation chart is a visual representation, in graphic form, of the hierarchical and organisational structure of a company.
It highlights the relationships between different roles, departments and levels of responsibility, making it easier to understand internal interactions, and by extension, human resources management.
🔵 An organisation chart is made up of several key elements, each with a specific role:
- Boxes or circles, in a way "boxes" that contain the names, positions and functions of staff. They help to identify who occupies which role within the company, and ensure clear visibility of the responsibilities and tasks of each member of staff.
- Connecting lines link boxes or circles to indicate hierarchical or functional links between staff and departments.
- Titles of roles and departments: each section of the organisation chart is often grouped under a title to visually segment the organisational units, making them easier to read.
- Hierarchical levels are represented by the vertical or horizontal arrangement of boxes. They show the distribution of responsibilities and the decision-making weight of the various positions.
What is the purpose of the organisation chart? In short: to clarify roles and responsibilities, optimise internal communication and support strategic planning. More details on the advantages and disadvantages of the organisation chart below. ⤵️
What is the purpose of an organisation chart?
In business, the main purpose of an organisation chart is to provide organisational clarity: it shows who does what within the company. For example, employees immediately know who is responsible for their department or which department to contact to resolve a specific issue. This visualisation eliminates ambiguities and reduces overlapping roles, particularly in companies where several teams are working on similar projects.
💡Other benefits of the organisation chart include:
- improving internal communication, by visually linking services and departments. Example: a marketing department employee wants to obtain financial information. They will know who to contact directly in the accounts department, without having to go through several unnecessary intermediaries.
- better integration (onboarding) of new arrivals, as recruits can quickly understand where they stand within the company.
- greater transparency and trust: staff know exactly who they are accountable to, and avoid any doubts about their tasks. This strengthens the sense of belonging and cohesion within the company.
- decision-making support for managers: for example, by identifying duplication in certain departments, they can restructure or allocate resources where they are really needed, thereby supporting the company's growth.
☝️ But beware, organisation charts also have a few limitations:
- They don't always adapt to changing environments. In a start-up, where roles evolve rapidly, a fixed structure can become obsolete in a few months.
- In large companies, they can quickly become illegible.
- They need to be updated regularly. Every change in the structure must be integrated to avoid confusion. If an employee is promoted or a department merges, the organisation chart must reflect these changes immediately.
Is it compulsory to create an organisation chart?
In France, legislation does not require companies to create an organisation chart. ✅
However, this tool, although optional, offers many advantages in terms of internal communication and human resources management. So, even if there is no legal obligation, adopting an organisation chart is strongly recommended to optimise organisational efficiency.
The different types of organisation chart
Hierarchical organisation chart
The hierarchical organisation chart, often referred to as the "pyramid" chart, provides a clear and stable structure. Each employee knows exactly to whom he or she reports. This model is ideal for organisations that emphasise stability, process control and well-defined responsibilities.
🎯 Example of use: An industrial company like Toyota, where each department (production, quality, logistics) operates separately but is interconnected, benefits from this model to ensure strict process control.
☝️ Limitations: This structure can hamper horizontal communication and limit innovation, prompting some companies to supplement it with more flexible models.
Matrix organisation chart
The matrix organisation chart encourages cross-functional collaboration. It links employees to several managers, for example a project manager and a functional manager, which improves flexibility and responsiveness.
🎯 Example of use: An advertising agency, such as Publicis, could use a matrix organisation chart for its creative teams. A designer could answer to both an art director for questions of style and a project manager for deadlines.
☝️ Limitations: Dual hierarchies can lead to conflicting priorities. Clear communication between managers is essential.
Flat organisation chart
This model promotes direct communication and rapid decision-making. By eliminating intermediate levels, it promotes a culture of autonomy and agility.
🎯 Example of use: A tech startup like Slack at the beginning of its development, where every member of the team is actively involved in decisions.
☝️ Limitations: Without formal oversight, overlapping responsibilities can arise. Clarity of roles is crucial to its effectiveness.
Cloverleaf and circular organisation charts
These innovative organisational charts move away from traditional structures to focus on flexibility and customer-centricity. The cloverleaf model is based on autonomous teams, while the circular model puts the customer at the centre of decision-making.
🎯 Example of use: A company like Zappos, which values self-management and puts the customer at the heart of its organisation, can benefit from a circular organisation chart to reflect its priorities.
☝️ Limitations: These unconventional models require organisational maturity to work effectively.
Standardised organisation chart
Conforming to international standards, this chart guarantees a rigorous and uniform presentation of the organisational structure. It is particularly useful in highly regulated industries.
🎯 Example of use: A pharmaceutical company such as Pfizer uses a standardised flowchart to meet the requirements of regulators and ensure clear and accessible documentation.
☝️ Limitations: Although very clear, this model can lack flexibility and prove too rigid for structures undergoing major transformation.
How to draw up a company organisation chart in 6 steps?
1. List all the company's functions
Start by listing all the positions and functions in your organisation. This step ensures that you don't forget anything - or rather, that you don't forget anyone 👥 - and lays the foundations for your organisation chart.
Our advice: include all departments, teams and sub-divisions, even those that seem obvious.
Example: if you're in an SME, you could list functions such as "Sales Manager", "Support Technician", or "HR Assistant".
This comprehensive list ensures that each position is fairly represented in your diagram.
2. Define the responsibilities of each role
For each function identified, clarify the main responsibilities and associated tasks. This helps to avoid overlap and reinforces understanding of the roles.
Example: A "Marketing Manager" might be responsible for digital strategy, managing advertising campaigns and monitoring KPIs.
See also: How to create the perfect job description + template and example
3. Map hierarchical relationships
Next, establish the relationships between each role and position. Who reports to whom? Who are the direct and indirect managers? Organise the roles in a pyramid or matrix, depending on your structure.
Example: In an IT department, a "Developer" might report to a "Project Manager" who in turn reports to the "Technical Director".
A clear representation of hierarchical relationships avoids ambiguity and improves internal communication. 🤝
4. Add cross-functional relationships
Don't forget to represent cross-functional relationships for a complete view. These connections indicate employees reporting to several managers or working in conjunction with other departments.
Example: A "Project Manager" may work with the marketing department on a campaign and report to the technical department on another project.
5. Formatting the organisation chart
Once you have collected the data, use a dedicated tool such as Canva, Lucidchart, SmartArt or a simple Excel spreadsheet to create your organisation chart. Adopt a clear and attractive layout:
- Use colours to differentiate between departments. 🎨
- Choose simple, uniform shapes (rectangles, circles).
- Add legends or annotations if necessary to clarify certain points.
6. Update regularly
A static flowchart quickly loses its relevance. Schedule regular revisions, especially in the event of organisational changes. Set a frequency for updating (e.g. every quarter) to keep the flowchart up to date and useful.
Example: In the event of a promotion, new recruitment or restructuring, adjust the organisation chart immediately.
Examples of organisation charts: Google
The organisational chart of tech giant Google illustrates a complex hierarchical structure adapted to its many divisions and departments. At the top, CEO Sundar Pichai oversees the company's main branches, each headed by a high-level executive. For example:
- Thomas Kurian is responsible for Google Cloud, a strategic division for the company.
- Neal Mohan heads up YouTube, the major video platform.
- Fiona Cicconi is in charge of human resources as Chief People Officer.
This organisational chart, which you can see below, shows an organisation by functions and departments, with people in charge of specific areas such as search, advertising and product innovation. This structure allows Google to operate efficiently despite its size, by delegating the management of divisions to specialist leaders.
What is the best tool for creating an organisation chart?
An Excel or Word template for a (very) small company
For a very small company or SME, an Excel template or a Word document, many of which are available free of charge on the internet, may suffice. These office tools offer basic functions for creating simple organisation charts.
You can use the shapes and connectors to represent your structure clearly, without the need for advanced technical skills.
☝️ However, as your business grows, these tools quickly show their limits. Every change, such as a promotion, recruitment or transfer, requires a manual update. This is feasible for a small team, but with a more complex organisation, it becomes time-consuming and unreliable.
Using dedicated organisation chart software
For medium-sized to large organisations, it's best to opt for dedicated software such as Lucidchart, Visio or Canva. These specialist solutions are designed to handle complexity and offer advanced options.
For example, you can work on the flowchart at the same time, with several people: ideal for companies where teams are spread remotely or where projects evolve rapidly.
This software also offers a library of customisable templates, adapted to the needs of different sectors. And there's no longer any need to update everything manually: some of these solutions integrate with HR or project management software, synchronising data so that the organisation chart stays up to date automatically. 👏
If your business already uses the Microsoft suite, Visio can be a great choice thanks to its easy integration with Office 365. For a more creative and visual approach, Canva is ideal and remains affordable. If you have a penchant for automation, then you'll be more attracted to Lucidchart.
The company organisation chart, a strategic asset for structure and communication
A well-designed company organisation chart is much more than a simple hierarchical diagram. It brings clarity, structure and fluidity to internal communication, helping each employee to situate his or her role and understand the interactions between departments.
For human resources, it becomes a strategic lever. By visualising skills requirements and facilitating succession planning, the organisation chart supports better talent management. In the face of frequent reorganisation, it provides a solid basis for adapting the organisation to change.
In short, the corporate organisation chart is an evolutionary tool which, if used properly, can transform the organisational culture and reinforce growth.
Article translated from French