Even the smallest organization should operate based on an organizational structure to establish reporting relationships, promote good communication and ensure effective work process flow.

With that in mind, it would be beneficial if companies utilize organizational charts. That way people will know the team roles within the organization or institution. Also, the types of organizational chart the company will use reflects the type of organization they have and their priorities.

Best Picks: Organizational Charts

With the use of organizational structure, the roles, relationships, and responsibilities of each team member are clearly laid out.

There are various organizational charts that carry their own advantages and disadvantages. Here are the top recommended charts that may suit your organization.

Hierarchical Structure Chart

This hierarchy chart, also known as top-down structure, is the most popular. Most companies use this to show a traditional business structure. Employees can be grouped according to their function, geography, and product with one superior.


  • It helps define relationships, project organization, and chain of command.
  • It assists in specializing employee’s work.
  • It keeps the employees’ relationships stronger.


  • It can delay project completion due to bureaucratic hurdles.
  • It may encourage the people to work only in their own department and direct supervisors.

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Maky Orel/Pixabay

Matrix Organizational Chart

If your company is composed of multiple teams, a matrix organizational chart is the best to use.  A team can be led by a project manager, but the members still report to a supervisor. With that, the chart can show and operate in a cross-functional method.

Most importantly, matrix organizational structure helps in facilitation, communication, and flexibility. Although, it may create confusion with supervisors.


It improves the communication and teamwork of employees.

  • It fosters employee development on how they coordinate with others.
  • It removes the silos and allows the employees to work in whichever project they fit.


Reporting to a manager or supervisor can be confusing.

  • It may lead to extremely heavy workloads.

Flat Organizational Chart

This type of organizational chart is mostly used by startups and small companies. A flat organizational chart is impossible for huge companies due to several projects and the number of employees.

If the company implements this correctly, they can decide and move quickly. With this structure, there is only one layer resulting in more effective communication. Since middle management is eliminated, employees can work independently and be more productive.

A flat organizational structure works effectively in small companies because employees can be relatively reliable and transparent. But it does not mean that they won’t need to report to their superiors.


There is better and quick communication between employees.

  • It provides development of self-independence among the members.
  • It can save employer costs.


It can confuse the employees about the chain of command.

  • It is limited to small and start-up companies.

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Divisional Structure Chart

In this chart, you can visualize that there are divisions according to geographies or products. Divisional structures are still considered as one of the standard forms. This is because most companies are divided into multiple departments which have specialization in some way.

The primary reason for using this type of company organizational chart is to support independent operational flow. For example, a company has a product division. Then they would need to establish advertising, sales, production, and other staff in each segment. Through an organizational chart that shows divisional structure, it becomes easier to evaluate staff and performances.


It enforces a sense of accountability in the success and loss of the division.

  • It boosts teamwork since they work collaboratively with each other.
  • The employees can focus on their own product and service.


The products from various departments may not be complementary or related.

  • There is a lack of communication among the departments.

Importance of Organizational Charts

Undeniably, an organization cannot function efficiently without proper structure. To kickstart your business, you must establish a structure to indicate the relationship among employees, showing the employee to whom another employee reports. Creating an org chart and presenting this to the team will help them know their roles and tasks. Most importantly, they will learn how to address and coordinate with other people.

The following are the benefits of having an organizational chart.

Employees can easily identify the chain of command.

  • Employees can understand the needs of the company regarding the workforce.
  • It clearly defines the functions and roles of the members.
  • It helps in assessing the workloads of each department and employee.
  • It enhances the coordination and cooperation of the team.
  • The management can easily identify talent gaps within the company.

Creating an Org Chart

With the various types of organizational structures and charts, it can be easy to get lost. Hopefully, the information above helped you navigate and determine which chart is suitable for your organization.

Creating an organizational chart can be challenging. Fortunately, our team here at Venngage can help develop and design your organizational chart. Together we can align your organization’s vision with your employees and members.