Organisational Chart
A graphic representation of how authority and responsibility are distributed within a company or other organization is also called an org chart. An organisational chart is a diagram that shows the structure of an organisation as well as the relationships and relative ranks of its positions. The term “chart” refers to a map that helps managers navigate through patterns in their employees in an organisation. Charts help organise the workplace while outlining the direction of management control of subordinates. Increasingly a necessary management tool, organisational charts are handy when companies reorganise, embark on a merger or acquisition, or need an easy way to visualise a large number of employees.
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”.
An organisation chart is a graphic representation of formal authority and division of labour relationships. To the casual observer, the term organisation chart means the family tree-like pattern of boxes and lines posted on workplace walls. Within each box one usually finds the names and titles of current job holders. To organisation theorists, however, organisation charts reveal much more.
Advantages of Organisational Chart
1) Brings Clarity to the Organisation: The very process of preparing a chart makes the executive think more clearly about the Organisation’s relationships.
2) Provides the Picture of the Organisation: Once the charts are prepared, they provide a lot of information about the Organisation, both to the members of the Organisation as well as to the outsiders. This information relates to the number and types of departments, superior-subordinate relationships, chain of command and communication and job titles of each employee.
3) Facilitates Training of Employees: Organisation charts help to instruct and train new employees.
4) Ensures Organisational Changes: Organisation charts provide a starting point for planning organisational changes after having discovered the weaknesses of the existing structure.
5) Provides Quick Understanding: A chart serves as a better method of visualizing an organisation than a long written description of it.
Disadvantages of Organisational Chart
1) Details are not Provided: The Organisation chart does not provide all the details of the Organisation structure created. For example, the chart will display the line of authority but not the extent of authority.
2) Informal Relationship is not Shown: The chart fails to give details of informal relationships available in a firm. Human relationships within an organisation cannot be shown on a chart.
3) Updated position is not Available: The chart shows the position of the Organisation structure when it was formed. It gives a static picture of the Organisation. Changes made after that may not be available in such charts.
4) Fosters Buck-passing: The charts tend to foster ‘buck-passing’ and emphasize only formal communication channels.
5) Lacks Flexibility: The organisation chart lacks an element of flexibility. Such a chart also brings an element of rigidity to the working of an Organisation.
6) 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 employees.