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Why Organizational Charts Are Important in Daily Business?

Imagine an organization, where people don’t know each other and their missions. Can you expect an organization to be effective and productive without any communication or connection between its people? Simply no. That’s the reason we create organizational charts to answer “Who is Who?” and “Who Does What?” questions.

Organizational chart mostly called as “org chart”, rarely called as organigram, organogram, is an illustration of relations between people in an organization. In very basic terms, purpose of an organizational chart is to show map as to where exactly you are in an organization. Correspondingly, your location depends on your function and the role you have taken in the organization. So, we can say that org charts are used to define the role and function of every single individual within the organization.

Let’s look at, what we can discover by looking at an organizational chart.

Understanding the Hierarchy

First, we can understand the structure of the organization which means the hierarchy, the way that people and functions are arranged in order to meet the goals of the organization. It shows the relation of one department to another or company functions to others. So, we can say that an org chart is the visualization of activity flow within the organization such as delegation, coordination, supervision and so on, directed towards the achievement of organizational goals and objectives.

why org charts are important - hierarchy - someka blog

Reporting Lines and Decision Making

Businesses usually keep their HR data in Excel lists. If you do not have one yet, you can check Someka Employee Database Google Sheets template. These lists allow easy updates and keep all the relevant data for the stuff.

Org charts not only clarify the working relations between members but also show the reporting lines between managers and their staff. Thus, it clarifies the path for employees to whom they report directly and contact in case of an issue to be resolved. Furthermore, org charts give a clear and transparent idea about the decision-making flow. Practically, this prevents loss of effort during the decision-making process.


Resource Allocation

An org chart is a great way of showing promotion opportunities to the employees and improving their performance. It encourages employees to move towards the top of the organization. In addition, org charts point out if the resource allocation is being done correctly or not within the organization. Accordingly, it becomes easy to find whether the employee is overloaded or unproductive.

Referred to above-mentioned points, we can claim that an organizational chart is the combination of organization map and visualization of working relations.

How to Create an Organizational Chart in Excel?

There are many ways to create an org chart in MS Powerpoint, MS Word and MS Excel. In addition to this, there are many software for making org charts. Instead of creating an org chart from scratch, you may use ready-to-use org chart templates which will ease your job, like:

Someka Excel Automatic Org Chart Generator

To sum up, every organization needs an org chart. Some of them can be huge some of them can contain only a few people. And creating and maintaining these charts can be a significant workload especially for Human Resources departments.

Recommended Readings:

Questions You Should Ask Before Creating Org Chart for your Company

7 Types of Organizational Chart Structures

How to create an org chart in Excel?

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