What Is the Purpose of an Organization Chart?

Ryan McVay/Photodisc/Getty Images

The main purpose of an organization chart is to show the hierarchical structure, or chain of command, within an organization. It is a useful management tool that helps organize the workplace. In general, the charts place the top official or department at the head of the chart, with others following below in levels.

An organization chart, or org chart, visually divides any organization into different levels of authority. Each box in the chart depicts a department or position, with those on the same level being of equal rank. The chart illustrates relationships between departments and people within an organization. It makes it easy for people to comprehend the structure of an organization, especially a large one, and is common in any organization with over five members.

Most org charts are pyramid-shaped. For example, a large organization may have four directors reporting directly to one department head. In this case, the first level of the chart would depict the department head and the next level the four directors. Below the directors would be their subordinates.

Besides providing an easy-to-understand overview of an organization, org charts are useful when companies undergo major change or restructuring, as in the case of a merger. They are also useful when shifting resources or adjusting the structure of large teams.