Organisation structure of a company can be shown in a chart. Such chart indicates how different departments are interlinked on the basis of authority and responsibility. It is a simple diagrammatic method of describing an Organisation structure. It indicates how the departments are linked together on the basis of authority and responsibility. Such Organisation chart provides information of the Organisation structure at a glance. Organisation chart is like a blue print of a building. It indicates the number and types of departments, superior-subordinate relationship, chain of command and communication. Definition of Organisation Chart.
According to George Terry, Organisation chart is "a diagrammatical form which shows important aspects of an Organisation, including the major functions and their respective relationships, the channels of supervision and the relative authority of each employee who is in-charge of each respective function". Features of Organisation Chart
The definition noted above indicates the following features of Organisation charts:
Organisation chart is a diagrammatical presentation.
It represents the formal Organisation structure.
It shows the lines of authority in the Organisation.
It indicates the channel of communication.
It indicates who supervises whom and how various units are inter-related. Advantages of Organisational Chart.
Brings clarity to the Organisation: The very process of preparing a chart makes the executive think more clearly about the Organisation relationships.
Provides dear picture of the Organisation: Once the charts are prepared, they provide lot of information about the Organisation, both to the members of the Organisation as well as to the outsiders. This information relates to number and types of departments, superior subordinate relationships, chain of command and communication and job titles of each employee.
Facilitates training of employees: Organisation charts are useful in familiarizing and training new employees.
Ensures organizational changes: Organisation charts provide a starting point for planning organizational changes after having discovered the weaknesses of the existing structure.
Provides quick understanding: A chart serves as a better method of visualizing an Organisation than a lengthy written description of it. Limitations of Organisational Chart
Details are not provided: The Organisation chart does not provide all the details of Organisation structure created. For example, the chart will show the line of authority but not the extent of authority.
Informal relationship is not shown: The chart fails to give details of informal relationship available in a firm. In fact, human relationships cannot be shown on a chart.
Updated position is not available: The chart shows the position of Organisation structure when it was formed. It gives a static picture of the Organisation. Changes made thereafter may not be available in such charts.
Fosters buck-passing: The charts tend to foster 'buck-passing' and emphasize only formal channels of communication.
Lacks flexibility: Organisation chart lacks an element of flexibility. Such chart also brings an element of rigidity in the working of an Organisation.
Creates rank consciousness: An Organisation chart leads to rank consciousness among the staff. It destroys team spirit and collective approach on the part of the staff. Types of Organisation Chart
Vertical chart: One of the most popular methods is the vertical chart in which the highest job is shown at the top with other jobs shown in a descending order, connected by lines to show the authority and the line of communication.
1. Horizontal chart: This chart shows the Organisation structure in the form of a pyramid.
2. Circular chart: The top management is shown at the centre of the circle and other management levels are shown in concentric circles.
3. Departmental chart: This chart is devoted exclusively to particular department and gives details of relationships, authority, responsibility, etc. within the department. Uses of Organisation Chart
An Organisation chart facilitates ready reference. It enables the management to find out different positions of authority and their relationships in the Organisation structure.
It provides proper guidance to managers in executing, their assignments and helps them to avoid overlapping and duplication of work.
It provides complete information to understand the character of an Organisation.
An Organisation chart indicates ways to better utilisation of available manpower.
An organisation chart points out the consistencies and deficiencies of an Organisation and enables the management to correct them