Organization Charts: Types, Principles, Advantages, and Limitations

An organizational chart is a diagrammatic representation of the relationships within an organization.  In addition, it shows the various functions and relationships of an organization.

According to George Terry, an organizational chart is a diagrammatic representation of the various functions and their relationships within an organization. It shows the various authority and responsibilities of the employer, for example to play on the betting site in Uganda, who is in charge of the given function. Moreover, it reveals the boundaries of the control and supervision that the organization has over the various functions.

Organization charts can be divided into:

1. Master charts

2. Supplementary charts

The master chart shows the overall structure of an organization, while the supplementary chart provides details about the authority, duties, and relationships within a department.

Types of Organization Charts:

There are 3 methods by which organization charts can be divided:

1. Vertical

2. Horizontal

3. Circular

1. Vertical or Top to Bottom

The major functions are indicated in descending order in a chart, while subordinated functions are shown in ascending positions. In this type of chart, the top and the lowest authority are shown at the same time.

The vertical chart shows the position of the Board of Directors within an organization. The chief executive is also demonstarated in this diagram as the head of multiple functional managers.

2. Horizontal or Left to Right

The highest positions are shown on the left side, while the lowest authority is shown on the right. The flow of authority is shown in the vertical columns, and this is represented by the movement of the authority from one level to another. This type of chart also shows the various functions and vertical levels.

3. Circular

A circular chart shows the position of the supreme authority in the circle, and the various functions and positions are shown in all directions from the center, as indicated by the number of positions. Higher positions of authority imply that the functions are closer to the center, while lower positions imply that the positions are farther away. 

The various positions of authority are displayed in all directions from the center, as indicated by the number of blocks of positions. The lines forming these blocks indicate the channels of authority, similar to what is indicated in other arrangements. The circular chart shows the actual condition of the authority’s flow from the chief executive in many directions.

Principles of Organization Charts:

The following principles should be kept in mind while framing organization charts:

1. One of the most important principles that should be kept in mind while creating an organizational chart is that the top management should follow the line of authority whenever dealing with subordinates.

2. The organization chart should be plain and flexible.

3. The chart should also clearly define the various positions of authority so that no two individuals have the same position.

4. The organization chart should also not be influenced by the personalities of the individuals in it. It should focus on the balance of the organization’s operations and goals.

5. The undue concentration of duty at any point should be avoided.

Advantages of Organization Charts:

1. An organizational chart assists in identifying the various responsibilities and authority of diverse positions within an organization. Additionally, it is also wholesome in smooth working relationships between the various individuals in the organization.

2. The charts are helpful in the decision-making process. They act as a guide to the decision-makers.

3. The purpose of an organization chart is to clearly identify the various responsibilities and authority of the individuals in an organization as well as the support in preventing duplication of duties and ensuring that the procedures are followed properly.

4. An organizational chart can also help in attracting and retaining the right individuals. In addition, it provides an overview of the various responsibilities and authority of the individuals in an organization.

5. The creation of an organizational chart also comes in handy in identifying the various weaknesses and deficiencies in an organization. This is useful for the management to take immediate action to address these issues.

Limitations of Organization Charts:

The organization charts suffer from the following drawbacks:

1. One of the main disadvantages of an organization chart is that it does not show the level of responsibility and authority of the individuals in the organization. Instead, it demonstrates the relationship between the various positions.

2. Another drawback of an organization chart is that it shows the status and position of the organization at various levels. This can make the members feel inferior and lead to a reduction in the team’s spirit.

3. The next disadvantage of an organization chart is that it only shows the formal relationships between the various members of an organization. An informal organization, on the other hand, is very useful as it allows the management to know about the reactions of the people.