The Main Types of Organizational Charts
While most org charts have the same purpose, not all of them are structured in the same way. Over the years, business leaders and theorists have developed several formats to best fit certain needs and management styles.
In this comprehensive guide, I’ll walk you through the most common types of org charts and when you might use each style.
The Classic Hierarchical Model Org Chart
The original and still most standard org chart is hierarchical, meaning it’s set up like a pyramid with leadership at the top. This reflects a traditional, bureaucratic management approach with clear divisions between levels of rank and authority.
Hierarchical org charts start with the head of the organization (usually the president or CEO) at the top of the pyramid. Right below are their direct reports, often senior leadership like the company’s CFO, COO, VP of Operations, etc. Under them are mid-level department heads, who manage teams of lower-level employees.
The defining quality of hierarchical org charts is that authority flows strictly from the top down. Each position reports up the chain of command to the manager directly above them, who then reports up to their boss, and so on. This type of structure emphasizes “sticking to your lane” and managing all decisions through the proper authority level.
When Is A Hierarchical Model Useful?
Hierarchical models thrive in very large companies where highly centralized and standardized management helps maintain control. We’re talking big corporations, global banks, and government agencies; you get the idea. For example, the military relies on a rigid hierarchical command for good reason. When life-or-death missions are carried out by thousands of troops, you need to know exactly who is in charge and where the buck stops at each level.
Features:
- Top-Down Authority: The CEO or president sits at the peak, followed by senior leadership like CFOs, COOs, and VPs.
- Clear Chain of Command: Each employee reports to one direct manager, keeping communication straightforward.
- Specialized Departments: Teams are divided by function—marketing, finance, operations, etc.
When to Use It:
- Large Corporations: Ideal for big companies where standardization is key.
- Government Agencies: Helps maintain control and consistency across vast organizations.
- Military Organizations: Critical for clear command in high-stakes environments.
Example: Think of a global giant like McDonald's. With thousands of locations worldwide, a hierarchical structure ensures that a Big Mac in Tokyo tastes the same as one in New York.
Matrix-Based Org Charts
Unlike strict hierarchies, matrix-based org charts have more flexible chains of command with overlapping workgroups under multiple managers. Rather than siloing employees into departments by function (like marketing, product, engineering, etc), people are shared across interdisciplinary teams focused on specific product lines or initiatives.
For example, a matrix org chart might have a team working on “Product A” with members pulled from engineering, design, legal, marketing, and so on. Those team members still belong to their respective functional groups with individual managers. But for Product A activities, they also report to that dedicated cross-functional leadership chain.
When Are Matrix-Based Org Charts Useful?
Matrix structures are complicated but powerful tools for companies that manage diverse portfolios of products or services. They provide focused oversight for each offering while enabling expertise and resource sharing across the organization. Engineering pros aren’t isolated just working on “engineering stuff” - they flex across different products applying specialized skills where needed most.
Features:
- Dual Reporting Lines: Employees might report to both a functional manager and a project manager.
- Cross-Functional Teams: Teams are assembled based on projects, pulling talent from various departments.
- Resource Flexibility: Expertise is shared across the organization for maximum efficiency.
When to Use It:
- Companies with Diverse Products: Perfect for businesses juggling multiple product lines or services.
- Tech Firms and Startups: Encourages innovation by bringing different perspectives together.
- Project-Based Organizations: Ideal when projects require input from various specialties.
Example: Microsoft often employs a matrix structure to manage its wide array of software and hardware products, ensuring that the best minds collaborate regardless of their home department.
Flat or Non-Hierarchical Org Charts
On the opposite end of the spectrum, flat or non-hierarchical org charts completely avoid the traditional management pyramid shape. These structures have minimal to no middle management layers between leadership and employees.
While still listing areas of responsibility, flat org charts arrange boxes side-by-side instead of different levels. This shows how the company views each role or team equally from a rank perspective. Responsibilities and subject matter expertise differ, but no one person or group ranks higher than another.
When Are Flat Org Charts Useful?
Flat organizations are nimble, collaborative, and well-suited for entrepreneurial cultures. Without bureaucratic hierarchies to navigate, they react fast to opportunities. Junior employees also often thrive with direct access and transparency from company leaders rather than being buried under layer upon layer of management.
Features:
- Minimal Management Layers: Reduces bureaucracy by eliminating middle management.
- High Employee Autonomy: Empowers employees to make decisions without constant managerial approval.
- Enhanced Collaboration: Promotes a culture where ideas can come from anyone.
When to Use It:
- Startups and Small Businesses: Great for fostering innovation and rapid decision-making.
- Creative Agencies: Encourages free-flowing ideas and collaboration.
- Tech Companies: Companies like Valve Corporation thrive with this model, allowing for self-organizing teams.
Example: Valve Corporation, the gaming company behind hits like "Half-Life," uses a flat structure to let creativity run wild without getting bogged down by hierarchy.
Circular Org Charts
A newer format, circular org charts set teams, business units, or workers equally around a central leadership core team or CEO to again symbolize non-hierarchical status. Visually, it looks strikingly like a target with leadership at the bullseye and wings of the organization radiating out from there.
The circular format aims to empower employees and foster innovation by removing internal barriers between functions. Marketing doesn’t throw ideas over the fence for Product to handle or Engineering to implement. Everyone operates collaboratively with the leaders at the core binding it together.
When Are Circular Charts Useful?
Ideally suited for mission-driven organizations, circular models help rally staff toward collective goals and build strong cultures. Accountability rests shared across all levels instead of solely at the top of leadership.
Non-profits often thrive on circular org charts by distributing ownership across equitable cause-focused teams. But even quant-driven corporations like consumer goods giant Procter & Gamble harness aspects of non-hierarchical circles within their matrix layouts.
Features:
- Central Leadership Core: Leadership is at the center, supporting rather than commanding.
- Equal Team Representation: Teams are placed around the center to show equal importance.
- Enhanced Communication: Breaks down barriers between departments for better collaboration.
When to Use It:
- Mission-Driven Organizations: Ideal for nonprofits or companies with a strong shared vision.
- Companies Seeking Innovation: Encourages input from all levels to drive creativity.
- Flexible Work Environments: Supports dynamic roles and responsibilities.
Example: While not exclusively circular, companies like Procter & Gamble incorporate elements of this model to foster collaboration across their numerous product lines.
Why Does This Matter for HR Managers and Directors?
Understanding these org chart types isn't just academic—it's practical. As an HR professional, you play a pivotal role in shaping the organization's structure to align with its goals and culture. Whether you're scaling a startup, managing a large team, or integrating departments after a merger, choosing the right org chart can make all the difference.
Wrapping It Up
Organizational charts are more than boxes and lines; they're the blueprint of your company's culture and workflow. By selecting the right org chart type, you can enhance communication, boost efficiency, and create a work environment where everyone thrives.
So next time you're tasked with drawing up or revising an org chart, consider which model fits your organization's personality and objectives. And remember, just like no two companies are the same, your org chart can be customized to suit your unique needs.
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