Major Types of Organizational Charts: Which One Do You Need?

Knowing who is who in the company is an important point for business. In essence, you put them on the map, from the key big players to the smaller "bolts" that keep the company running. This presents a general overview of the organization and keeps everyone informed. As such, it becomes crystal clear who's responsible for what and whom to turn to with a specific request.

And it's not just about creating org charts that look good and are simple to understand. It's equally about establishing an effective organizational structure to help avoid miscommunication, boost internal processes, and make collaboration more effective.

So, where do you start? On this page, we'll overview which types of organizational chart are there, going over when to apply them and how to choose the right one for your specific case.

Kinds of Org Structures

Before we look into the various types of organizational charts, let's dot the i's regarding the kinds of structures that companies commonly opt for and how they differ.

Centralized vs Decentralized

The primary distinction between centralized and decentralized organizational structures lies in the decision-making authority. Many organizations stick to the conventional centralized model that has top-down management, a clear chain of command, and well-defined roles and responsibilities. In this case, a single individual or an executive team are those who make the most important business decisions, which are then passed down.

Who uses it? Oftentimes small businesses or early-stage startups with a limited workforce adopt this kind of org structure, so a single leader can make decisions that are easier to implement. If an organization is rather large, the centralized model can mean less agility and lead to slower decision-making that can negatively impact various processes.

On the contrary, a decentralized org structure distributes authority and decision-making among various managers, departments, and even non-top-level employees. This approach gives teams more freedom to make decisions without the approval of the top management, helping them stay agile and take on more responsibility. Increased autonomy also fosters collaboration and means that teams can react faster. Rapidly expanding companies, those operating on a franchise basis, or those with regional markets often use this type.

Hierarchical vs. Circular

Structures can also be distinguished by how they are arranged. As such, a hierarchical organizational structure often comes in a pyramid format. This kind of work hierarchy chart typically shows the roles in a top-down matter, similar to a family tree. Generally, a single role like the CEO is at the apex of the chart and the chain of command cascades downwards with each lower level implying less authority and level of responsibility.

A circular organizational chart is made up of concentric circles. The leaders of the company are positioned in the innermost circle as the central figures. Information is then distributed outward from the center to other circles instead of passing it down the hierarchy layers. Employees from various departments are less isolated within their specific functions and are viewed as integral parts of a unified entity instead.

Vertical vs. Flat

Finally, the chain of command goes down from a few top-placed leaders to lower tiers in a vertical organizational chart. Every consequent tier that’s lower means fewer responsibilities. This type of structure is used in functional as well as market or product-based charts.

To compare, flat org charts make it possible for individuals to report to multiple managers or supervisors. It has shared decision-making and authority and is sometimes applied by cross-functional teams and org chart types like matrix ones.

Core Elements Most Organizational Chart Types Have

The majority of types of organizational chart that you might come across share pretty much the same set of features or elements, including the:

• key employee information (like the name, photo, and or contact details);
• position held (including the role or work specialization);
• could note the areas of responsibility;
• departments within the company;
• chains of command.

7 Types of Organizational Charts

So, what are the different types of organizational charts? Here's a rundown of the different types of org charts that are most commonly applied by businesses.

Horizontal Organizational Chart

Also sometimes called flat, this kind of org chart is rather simple. It defines few roles, since such structures usually don't have a middle management level altogether. It's typically suitable when the company is at its earliest stages, some people take on multiple roles and have several areas of responsibility. A horizontal org chart is often a starting point, it can then grow to a hierarchical one or other organizational chart type after more people are hired.

• Peculiarities: is rather small and simple, lacks a middle management tier, implies no or little supervision
• Often used by: startups and small businesses with a small headcount
• Best for: early-stage businesses and small companies with few people onboard

Hierarchical Organizational Chart

A hierarchical org chart is often referred to as functional. It's role-based and uses a top-down authority representation that categorizes the company into various departments. It offers a comprehensive overview of leaders and their teams and hints at the possible career paths. As such, it starts from high-level positions and top executives like the C-suite, moving through upper and mid-level roles, and extending down to junior or entry-level employees. This classic org chart type is widespread and most commonly utilized among most companies due to its simplicity of perception.

• Peculiarities: often illustrates authority in a pyramid-like manner with many leadership levels, delineating authority and reporting chains
• Often used by: various-sized companies that have a straightforward, top-down approach to communication, decision-making, and management
• Best for: companies with clear chains of command, structured management levels with supervisors, and strict reporting lines

Divisional Org Chart

Such types of organizational chart imply showing a part of the organization, not the entire company. For instance, the split could be geographical, regional, industry-based, market-based, product-based, or even differ by customer type. That is, if a company has separate divisions for different regions or more-or-less standalone teams working on a specific product line, you can create separate charts for various business units or segments.

Divisions might even function as separate companies with their own resources, departments, and teams from developers to marketing specialists and beyond, yet report to a central figure of the larger organization. Think mergers or some huge corporations like Samsung, producing everything from mobile devices to home electronics and beyond.

• Peculiarities: the org chart depicts a smaller division of the company as opposed to showing the whole organization's structure
• Often used by: large or enterprise-size businesses, companies that acquired or merged with other companies, companies with multiple products or services split by industry, geographical areas, and so on
• Best for: visualizing standalone units that might have a degree of independence or close to autonomous operations

Team-Based Organizational Chart

As follows from the name, a team hierarchy chart focuses on a particular group of people. For example, it could be task or project-based, outlining who works on a specific product or project. There isn't as much focus on management in such a structure, while collaboration, rapid response to changes, teamwork, and a flexible approach are bigger priorities. That's why this type is favored by companies in the technology or creative sectors.

• Peculiarities: a chart grouping employees based on projects or tasks, has a dynamic nature
• Often used by: those building tech products, creative teams, startups, Scrum teams
• Best for: companies striving for less formality and more flexibility and agility

Matrix Org Chart

Making a multi-dimensional, complex org chart like a matrix lets you get additional information not only on the hierarchy but also additional details, such as who is involved in particular projects using a grid. They are generally applicable for cross-functional teams that pull specialists from project to project once in a while.

Particularly, matrix organizational charts mark the specialist's participation in a project with a dot on the grid and imply that a person might have more than one manager or supervisor (for example, could report to a couple of project managers and the person in charge of their department). Such dynamic organizational chart types are prone to change and might thus entail frequent updates for data relevance. 

• Peculiarities: apart from the hierarchy, could feature an additional grid showing who is assigned to a particular project using dots or other means
• Often used by: companies with large and flexible teams (e.g., marketing, web design, and development departments) to reflect who is part of specific projects 
• Best for: companies with multiple projects and cross-functional teams, as well as outsourcing vendors, consulting companies, or similar spheres

Process-Based Org Chart

Such types of org charts are implemented by those who want to structure the teams or departments based on the specific stages of a workflow that can follow the life cycle of a project. Instead of a traditional vertical hierarchy, this org chart moves from left to right. For example, the product analytics team does its part of the work first followed by design, development, and testing teams.

In this scenario, a higher-level executive oversees all processes collectively while each distinct phase of the workflow is represented by each department that has dedicated employees and its own supervisor responsible for the particular segment. This also implies that a subsequent process cannot start until the preceding one is fully complete. Such a structure puts collaboration in the spotlight, yet may hinder overall efficiency if there's a delay in any of the steps.

• Peculiarities: breaks down the team according to the project creation phases and goes from left to right
• Often used by: teams developing a product, be it software, a physical product, or something else
• Best for: breaking down the people involved in a project by phase

Network Organizational Chart

Finally, a network structure is applied in several cases. For starters, it is useful when there's more than one organization or party that has to be linked, so it may depict not only the internal employees of a company, but also subcontractors, outsourced teams, freelancers, and other partners. Network org charts can also be handy for teams with many satellite offices or locations offsite. Likewise, they may be used for companies that focus on more open and non-hierarchical relationships. Bottom line: such a chart connects the organization's core departments with teams based in different locations and with third-party partners.

• Peculiarities: shows all connected parties not only within the organization internally but also freelancers and other partners
• Often used by: international companies based in multiple locations, companies with complex "line-ups" and team composition
• Best for: depicting all involved parties, including external ones

How to Choose Among the Types of Org Charts

Now that you have a better understanding of the different types of organizational charts, here are some recommendations on how to select the appropriate kind for your specific business.

Step 1: Decide on the org structure — The best-fit org chart type will depend on what kind of structure your company has. As described above, it could be flat, hierarchical, decentralized, and so on.

Step 2: Mind the company size — If you're at the earliest stages, a horizontal org chart could be more than enough, and you can later grow it into a hierarchical one. If the company operates in multiple regions or has several more or less standalone products with autonomous teams, you choose in favor of divisional charts. It all goes down to how many people are on board.

Step 3: Identify the chains of command and roles — Which roles do you have and who is responsible for what? Who reports to whom? Keep this in mind when selecting proper organizational chart types.

Step 4: Take care of flexibility and possible expansion — As the company grows, how will the structure expand? Note the probable scaling scenarios to find the chart type that'll be relevant now and in a while too.

Step 5: Mix it around — Remember that you're free to opt for more than one type of organizational chart. If you feel that a process-based and matrix chart could both complement your current processes, you might as well use them along with your "general company overview" hierarchical org chart.

A Lifehack for Making Org Charts

Surely, creating and maintaining organizational charts could be an effort-intensive process. Even with the tons of templates out there, putting the charts together and upkeeping them usually means a lot of manual work. So, how can you make your life easier in this respect? If your team uses Slack as a workspace, you can leave it to OrgaNice, a handy org chart Slack bot.

After adding OrgaNice to your Slack workspace, the bot can generate a dynamic org chart using AI in a matter of a few minutes. It pulls data from the team directory, where employees fill out their profiles with their name, photo, role, contact details, location, and select their manager. Then, you can easily move things around if necessary.

OrgaNice also sends reminders to ensure that the employee profiles are up-to-date, minimizing manual effort. Whenever any information is updated (say, when there's a new hire, layoff, role change, or anything else), the org chart gets automatically updated, keeping the information relevant at all times.

Apart from that, the suite comes with additional features, including an in-Slack system for tracking time off, running employee surveys, congratulating teammates on work anniversaries and birthdays, sending kudos, and more!

Final Thoughts on the Types of Organization Charts

Org charts help depict how a company operates and how internal communication flows within it, including reporting, chains of command, and decision-making. Each type of chart, be it hierarchical, process-based, matrix, or other organizational chart examples we've overviewed earlier is applied to streamline communication and give a blueprint of the roles and responsibilities within a company.

A well-designed organization chart can bring multiple benefits to a team of any size, as it reflects the current business state and can serve as a roadmap for future expansion. If your team uses Slack as a workspace, creating and keeping an organizational chart evergreen can be easier than ever using adding OrgaNice.

This HR tool can not only help you assemble an org chart in minutes but also comes with other valuable tools like the employee vacation tracker, automated birthday celebration bot, and more all in one package. Feel free to reach out if you have any questions. And you're very welcome to check out OrgaNice and use it absolutely free if your team has under 36 people in your Slack workspace, if you have more people on board, try it out for free for 14 days and then switch to affordable user-based pricing afterward.

FAQ

1. What is an organizational chart?

An org chart graphically represents the role and responsibility distribution within a company. It also visualizes the hierarchy and shows the communication pathways, making the leadership and management levels clear. They come in plenty of sizes, types, and org chart styles based on the organization’s size, hierarchy complexity, org structure, business goals, and other factors.

2. What are the 4 types of organizational chart?

There are different types of organization charts, but the four main ones that are most commonly distinguished are hierarchical, divisional, flat, and matrix.

3. What type of chart shows all positions in a corporation?

The hierarchical chart is the classic and most common type of organisation chart that shows the company’s structure in a pyramid based on the employee’s functional positions. It is also called top-down and outlines the reporting relationships within departments and the chain of command.