12 Must-Have Executive Summary Templates | Visme
Structure is vital for an organization to function effectively. It informs everybody which department and under whose leadership they belong.
With these pieces in place, you and others clearly understand their responsibilities as part of the whole. You also know which teams to reach out to and who to approach for issues outside your scope.
If you want to develop an organizational structure for everybody to know, this post is for you.
It dives deep into what an organizational structure is, the different types and the elements that make it up. The article then discusses how to create an organizational structure using Visme’s org chart template.
Let’s start!
An organizational or org structure outlines a company’s reporting and leadership hierarchy. It is where you can find the CEO at the top, followed by the department heads below and rank and file at the bottom.
It depicts how roles and responsibilities intersect and how information flows across the organization. These all have a direct effect on how the company operates.
An org structure is function-centric. It groups people in the organization based on their purpose, i.e., marketing, sales and engineering, and their respective key performance indicators (KPIs).
Once establishing your organization structure, it remains unchanged unless there’s a change in strategy or execution lifecycle.
On the other hand, an org chart is people-centric. It communicates the title and job description of your organization heads.
Also, you must frequently update an organization chart. This is true, especially if you work in a company where job titles and roles keep changing among employees.
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An organizational structure is composed of four basic elements or building blocks:
The chain of command refers to a system in which each employee reports to one manager instead of several. This streamlines business process flows and makes communications more efficient.
Managers delegate tasks to the most suitable employees and provide details, deadlines and other relevant information. If an employee encounters an issue, they report back to the manager, who either takes ownership of the problem or consults another manager higher up the chain of authority.
Departmentation or departmentalization happens when functions, teams and offices are grouped to form a department.
Departments, such as the HR or Finance departments, are designed around employees' tasks. But a company can also be divided based on geographies or product lines.
This organizational structure element boils down to who’s involved in the decision-making. Centralization occurs when a small group—typically top executives and senior managers—makes all the decisions. Middle managers have little or no say.
In a decentralized structure, on the other hand, middle and lower-level managers make the decisions. Employees also sometimes participate in the decision-making process.
Span of control refers to the number of employees one manager can efficiently handle. The size of the workforce generally determines it. But other factors affect the span of control, such as:
Pyramid-like or top-down organizational flowcharts usually come to mind when someone mentions the phrase “organizational structure.” But in reality, traditional hierarchical structures are just one type and several more exist.
Below are other organizational structure types you must know:
In a matrix structure, employees and teams report to multiple managers: a functional manager (department head) and a project manager. Project roles and teams are not permanent in a matrix-style structure, and employees who juggle multiple projects report to multiple project managers.
This structure best suits organizations that run several projects at once. It allows them to be efficient and flexible.
In a circular or round organizational structure, the highest-level executive sits at the center of the circle. From there, other top-level positions revolve around it. The outermost rings of the circle represent entry-level staff and individual contributors.
This less conventional organizational structure shows the organization as less authoritarian than traditional top-down, hierarchical structures.
In a flat or horizontal org structure, there are very few or no levels of management between top-level managers and employees.
Startups and small businesses usually embrace this org structure type. And because practically none or very few steps separate staff from executives, employees maintain a high level of autonomy. This means decisions can be made at the employee level.
A network organizational structure involves a temporary or permanent arrangement between organizations within a network. They do this to maximize resources, decrease costs, and improve efficiency.
Examples are organizations that outsource their digital marketing functions to agencies or brands that partner with factories to produce certain parts of their products.
In a functional organizational structure, employees are grouped according to their specific organizational functions. A department head independently manages each department.
For example, customer support representatives report to the customer service manager, art directors report to the advertising manager, and sales reps report to the sales manager.
A product-based divisional structure groups employees according to the products they produce. Large organizations with large business units often use this approach, and each business unit has the functional departments necessary to support a specific product.
For example, a large appliance company may have Home and Business divisions. Each division then has its sales, marketing, and production departments. Other functions, such as finance and HR, may be managed by the organization centrally.
In this type of org structure, departments are created based on industry, market, or customer type. A market-based organizational structure benefits large companies that offer products or services to specific market segments.
For example, a large software company may set up divisions that specifically handle retailers, educational institutions, healthcare organizations, etc.
This type of org structure is designed according to geographical locations or regions. It generally applies to large enterprises, such as big-box retailers with several branches or a chain of quick-service restaurants operating in multiple areas worldwide.
This structure type comes with several benefits, including the ability of geographic divisions to respond to local market preferences or conditions.
Process-based organizational structures are designed around processes and how the various activities employees perform affect those processes. Because processes impact different parts of the organization, this structure improves relationships between people.
Examples are divisions around order fulfillment, research and development, and customer acquisition—or, in hospital or hotel settings, housekeeping.
Visme is an all-in-one design tool that enables users to create professional-looking visual content no matter their level of design proficiency. The tool makes it super easy for anyone, regardless of their skill level, to put together visually striking design projects. This includes presentation slides, educational infographics, branded templates and your organizational flowchart.
Speaking of which, below is a step-by-step guide on creating an org chart using a template from Visme.
The first thing you have to have is a Visme account. If you already have one, sign in. If not, sign up for a Visme account.
After signing in, click Create New on your dashboard, select Project from the items in the drop-down list, then choose Charts/Graphs or any other item to take you to the Templates page.
Pro Tip: If you’re new to Visme, take the time to review the training guides to familiarize yourself with the tools available on the platform.
On the Templates page, type in “flowcharts” in the search bar, then select “flowcharts” under Categories. Visme will show you a list of all available templates you can use.
Of course, you can create from a blank template if you want, but we recommend using Visme’s customizable org chart templates to save you time and energy. The search bar is your friend. Use it to find the best template for your project.
Once you’ve chosen an org chart template, you’re ready to customize your chart to suit your needs. Use the horizontal and vertical toolbars on the right side and the Navigation menu on the left to add elements such as stock photos and videos, text, and icons.
You can even add animation effects and interactive features, as well as embed external online content to make it more interesting.
Pro Tip: Right-click on an element in the Edit screen to perform actions more quickly, such as adding a comment, editing text, duplicating, deleting, cutting, copying, and pasting, among others.
Once you’re satisfied with how your org chart looks and feels, you can download it to your computer as a JPG, PNG, or PDF file. You may also publish and share it online in just a few clicks.
Pro Tip: Write a brief description of your project before sharing it so everyone knows the content.
How an organization is structured says a lot about its operational procedures, communication flows, culture, management and people.
The right structure streamlines communications and maximizes resources. It also eliminates redundant processes and enables effective collaboration among teams. On the other hand, a haphazardly designed one can bring chaos and cause your company to fail.
Before deciding on a structure for your organization and implementing it, take the time to create an organizational flowchart. This way, everyone involved can more easily visualize and understand it.
To do this, sign up with Visme and take advantage of free org chart templates to create an organizational flowchart within minutes!
Changing an organization’s structure often causes disruption and can be chaotic for everyone involved. Reasons for updating your org structure may vary, but typical signs it’s time for a change include:
Yes, but all organizational change should be thought out carefully before it occurs. Do it wrong, and you can set your company’s progress back instead of propelling it forward. Do it right, and you’re poised to reap huge benefits.
That said, organizational restructuring should only happen once a sound business strategy is firmly in place and everyone in the organization understands why you’re doing it. Reasons for changing an existing organizational structure can include:
Your organizational structure must align with your business goals, processes, company culture and the products and services you offer. When that happens, internal processes will be much more streamlined and efficient.
On the other hand, an org structure that doesn’t fit may result in the following:
Organizational structures can be altered and redefined according to business needs. If you think your current structure no longer serves you, it may be time to make some improvements. To do that, here are some questions:
Also, communicating your plans to restructure the organization and listening to feedback are important.
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About the Author
Christopher Jan Benitez is a freelance writer who specializes in digital marketing. His work has been published on SEO and affiliate marketing-specific niches like Monitor Backlinks, Niche Pursuits, Nichehacks, Web Hosting Secret Revealed, and others.