ORGANIZATION CHART

The organization chart graphically shows reporting relationships using a series of boxes and lines. The boxes represent positions and lines that reflect the reporting relationships.

You can draw an organization structure based upon function, region, product, or a combination thereof. Whichever one you choose, however, the organization chart should seek to achieve several objectives.

First, it should streamline operations. The chart should reflect minimum layers to meet managerial needs. Too many layers produces waste and breeds inefficiency.

Second, it should maximize resource usage. No chart should contain positions that contribute little or nothing toward achieving an organization’s goals and objectives.

Third, it should improve communication and reporting relationships. No chart should contain a structure that obscures reporting relationships by having, for instance, a position reporting to more than one supervisor.

Fourth, it should reflect an optimum level of responsibility and accountability. For instance, a supervisory position should have no more than ten people reporting to it and not less than five. Too many reflects a span of control that is too wide, and too few reflects a span of control that is too narrow.

Fifth, it should contribute to attaining organizational goals and objectives. If you can’t explain how your organization chart will help contribute to meeting organizational goals and objectives, then change it. If the chart leads your organization in a different direction, you’ll have performance problems.

An organization chart offers several benefits. It clarifies reporting relationships and identifies responsibilities. It also clarifies communications and enables structuring in a manner that increases effectiveness.

for Developing an Organization Chart

• Identify the functional and process units.
• Identify the reporting relationships within each functional and process unit.
• Maintain effective spans of control with each functional and process unit.
• Ensure that, overall, the entire organization has clear reporting relationships and effective spans of control.