Strategic Use of Organizational Charts

Organizational Charts as Communication Tools

Using charts as a communication tool serves several key purposes:

• Inform members: To inform members of the organization about their position relative to the rest of the organization.
• Structural picture: To provide an overall picture of the structure.
• Onboarding: To enable persons entering the organization to make contact with and understand its structure.
• Career progression: To facilitate the understanding of the possibilities for each person to move up within the organization.
• Stakeholder information: To inform interested parties on the common organization and how it is structured.

Organizational Charts as Analytical Tools

As an analytical tool, charts help to detect flaws in the structure. The most important situations that can be detected are:

• Failure of internal control: For example, functions and cash accounts assigned to the same office.
• Inadequate departmentalization: For example, accounting and sales functions assigned to the same office.
• Lack of unity of command: When two or more people monitor the same office.
• Overlap of control: When two or more charges are assigned responsibilities for the same or similar functions.
• Confusing dependence ratios: When the relationship of authority to an office or person is not clearly determined or is linked to other positions or persons.
• Ordinary subordination: When a charge depends on a single subject, often referred to as "one on one."
• Lack of level definition: When it is not clear where the position belongs in the hierarchy, pay scales, etc.
• Authority confusion: Confusion about the kind of authority that has been assigned to the post: linear, consultant, or functional.
• Unbalanced structure: General structural imbalances.
• Broad scope: When a scope is overly broad, such as when a greater number of subordinates are assigned than can be effectively monitored.
• Inadequate allocation of levels: When a position is assigned a level inconsistent with the remaining places.
• Confusing designations: Confusing functions, categories, or names of the charges.

Limitations of Organizational Charts

The main limitation is contained in the definition, which states that it is a limited graphical representation. Simplicity is a fundamental requirement for the purposes of the charts to be met. Simplicity is the first limitation that must be assumed, even with the risk that the information about the structure remains incomplete.

The diagram represents part of the formal organizational structure; as a matter of graphical convenience, it does not include certain information. The other limitation comes from the fact that the organization must be continually updated; otherwise, we run the risk of the tool becoming negative. Any change in the structure makes the current diagram obsolete. If you continue to use it for communication purposes while it is outdated, it becomes distorted. The only way to combat this negative influence is through constant updates.

Common Forms of Representation

There are several different forms of design. The most common forms of representation are:

1. Vertical representation
2. Horizontal representation