What are organizational charts used for within companies?

14 of February, 2025

If you don’t know what org charts are used for, they essentially enable you to understand a company’s structure.

Company org charts are the specific expression of how it functions, thus transforming into an indispensable tool for all kinds of companies.

In this respect, having computer software capable of recording information about all the employees is important. As by using this information, an organizational chart can be quickly and easily developed.

What is a business organization chart?

Theoretically, an org chart is a graphical representation of a company’s organizational structure and human capital.

This tool displays the report line for all employees and positions, as well as the links between the multiple departments.

Even though there are different types of org charts, the purpose of what org charts are used for is to provide clarity to all collaborators so they can have a clear view of the company’s current structure.

This way, it will allow them to identify their role within the company and detect strengths or areas of opportunity.

Why implement an organizational chart in the company?

The org chart, essentially, is a schematic graphic tool. Which will help you see the structure of your organization in a simple way.

This element is informative, and it allows us to represent the company’s hierarchy. And depending on the type of organizational chart used, it even presents the person responsible for each area.

For an org chart to be useful for your employees, it should be easy to understand at a glance. It does not need to display details of all the components of the company. It should focus only on the most important ones.

Finally, it is important to note that the org chart is not fixed, it is like a portrait of the organization at a specific moment. Because of this, this element should be modified as changes appear within the company’s employee database.

Characteristics of org charts

Among the main characteristics of the org chart, we highlight the following:

Clarifies the different levels of hierarchy and authority within the organization.
Represents a company’s organizational structure.
Its design is vertical and linear, although some may have a horizontal format. In this respect, the hierarchy levels are usually represented from top to bottom, as appropriate.
Helps understand a company’s internal communication.
It emphasizes formal relationships over informal ones.
The multiple divisions are connected by directional arrows.

What are org charts used for?

If you’re still wondering what org charts are used for, you should know that there are multiple uses for them, although not all are as apparent. If you don’t know what they are, we’ll detail them for you below.

Better distribution of authority

Org charts help to identify problems in the chain of command that affect communication and competitiveness.

For example, it could show imbalances in the control system or a lack of clarity in the type of authority.

Identify failures in the organizational structure

This tool is used to optimize the management of human resources, as it allows the detection of duplication of roles and tasks.

Also, it highlights relevant functions within the organization that have been overlooked or problems in an area affecting productivity.

Communicate the internal structure

The org chart has a significant communicative function because it indicates employees their position within the company, thus facilitating internal communication.

It also shows them their interrelation with other positions and the possibilities for growth within the chain of command.

Update the personnel system

The org chart not only shows the organizational structure, but also serves to make updates that facilitate information flow and improve business efficiency.

It is a basic element for conducting job description studies, salary administration plans, and, more broadly, for planning and controlling personnel systems.

Business org charts are, in essence, a structure that can be represented in a variety of ways. That is, not only from a graphic perspective, but also according to the type and the amount of information that needs to be displayed.

What are org charts used for? Advantages of using them

By now you should know what org charts are used for, but you might not yet see the advantages of using an org chart. So, we’ll explain them to you.

Easy to visualize

Being a graphic element, the org chart encourages everyone to use it to learn more about the company.

Without this tool, this becomes an exclusive process for the human resources department.

That is, the org chart provides an easy way of visualizing the entire structure of an organization.

Clear responsibilities and hierarchies

Because org charts display a representation of positions organized by hierarchy, they provide a specific idea of who is responsible for each area.

It simplifies the job of superiors when explaining to their collaborators the tasks that each one must take on.

They’re very useful for new employees in the company. It helps them locate themselves quickly within the organization and to get to know all the departments within it.

Facilitates planning

Whether in development processes or personnel adjustments, the org chart makes it easier for the company’s management to have a detailed and realistic idea of the current situation. This makes it easier to identify key people within the company.

An important point is the additional data that the org chart can show to users.

If the management can consult the metrics of the organization from the org chart, it will optimize the planning processes. A process facilitated by functionalities such as People Analytics.

Now you know what org charts are used for. In summary, they are a very important tool within the current business fabric. This is partly due to the clarity it gives to employees when studying and knowing the hierarchy of the company where they work.

You can create org charts using human resources management software like Sesame HR. It is a program focused on the human resources department, specially designed to optimize many processes in your company.

Customer-oriented, both internally and externally, specializing in the definition and implementation of HR policies, as well as talent management, recruitment, and retention. Strong leadership, communication, negotiation, organization, and team coordination skills. Over 12 years of experience in Human Resources.

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iriserrador

HR Content Specialist