A guide to 9 organisational chart types and their benefits

By Indeed Editorial Team

Published 25 April 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

It can sometimes be difficult to know the role of every employee and the lines of hierarchy in a business, especially if it's a large organisation. Organisational charts are a useful tool for showing this information in a way that's clear and easy to understand. There are several different types of organisational charts that businesses commonly use and knowing about the options can help you to choose an appropriate organisational chart type or more easily understand the organisational charts you see. In this article, we explore organisational chart types and their benefits.

9 organisational chart types

There are nine common organisational chart types that you're likely to see when you're at work. Understanding how each type works can help you to choose the right style for your organisation and can help you to understand the organisational chart that your employer uses. The ideal type of organisational chart depends on the structure and nature of a business. Some companies might have multiple organisational charts to illustrate different relationships within the business. These are some of the organisational chart types you're most likely to see:

1. Hierarchical

A hierarchical organisational chart shows a traditional business structure and typically has a pyramid shape. The most senior members of staff are at the top of the chart. This then moves down through managers to more junior employees. The structure of this type of chart means it's easy to modify if the business expands or staff members change. A hierarchical organisational chart is usually useful if the organisation has many teams that work under the guidance of different managers. Charts like this can help managers to form closer relationships with their teams and retain greater control over their departments.

Related: Hierarchical structures: definition, how it works and examples

2. Divisional

A divisional organisational chart separates a company's activities or functions into different divisions. Divisions could be geographical, market-based or product-based or based on their position within the business' supply chain. A geographical divisional chart might focus on different regions or territories where the business operates. Market-based charts focus on a particular market or type of customer and all of the staff members and teams who serve that market. A product-based chart centres around specific product lines. This type of chart can be beneficial for organisations that have dedicated teams working on specific products they offer.

Related: What are the pros and cons of divisional structures?

3. Multi-divisional

A multi-divisional organisational chart is a type of divisional organisational chart that shows how subsidiary companies relate to their parent company and to each other. Typically these charts include less detail about individual employees because it would make them too large and complicated. They usually only show contact information and other details about the most senior staff. This is because this type of chart relates to the organisation of entire companies in relation to each other instead of concentrating on individual employees and their relationships.

Related: How to create an org chart in Excel (benefits and features)

4. Matrix

A matrix organisational chart is useful when employees report to more than one manager or supervisor. One manager might be responsible for general project management whilst the other oversees specific tasks and activities. A matrix chart groups members of staff together by their specialisms and departments. Having two lines of hierarchy can give greater flexibility. With matrix charts, businesses can communicate and share resources more easily between different teams and departments. It also gives a more dynamic overview of the company.

Related: Matrix organisational structure: advantages and disadvantages

5. Horizontal or flat

Horizontal or flat organisational charts reduce the levels of management so that more junior employees are close to the leadership team. It's suitable for companies that have few levels of middle management and this type of chart is popular with start-ups and new businesses with fewer staff. Some horizontal charts might only show senior management and then all other employees instead of including details about everyone in the organisation. This type of chart creates less hierarchical pressure and may help employees to be more productive and autonomous. It also encourages open communication and cooperation between staff members.

Related: Hierarchical vs flat organisational structure (basic guide)

6. Network

A network organisational chart can be useful if a company has more than one worksite with different leadership at each one or if they collaborate closely with another organisation. Businesses that outsource some work to contractors or freelancers might also use a network organisational chart to show the workflow. This type of chart is decentralised and can show complex working relationships in a simple way and helps employees to understand the organisation's workflow and processes. They can sometimes make it more challenging to understand the business' lines of hierarchy and can be difficult to design.

Related: What is outsourcing and how does it work? (Plus advantages)

7. Team-based

Team-based organisational charts show teams or departments that work together towards a common goal. This is also sometimes called a functional organisational chart. This type of chart is less hierarchical than some of the other options. It can aid problem-solving and decision-making and makes it clear what each employee is responsible for. Team-based charts group employees together based on their area of expertise and prioritise experience and specialism over the level of seniority. This can make it more challenging to identify the hierarchy within the business.

Related: How to create an organisational chart in PowerPoint (with tips)

8. Circular

The circular organisational chart type follows a hierarchical structure but uses a circular shape to depict this. The most senior staff are on the inner rings of the chart with more junior staff on the outside rings. You can represent senior leadership at the centre of the chart. This type of chart encourages communication and sharing of information. They present a hierarchy but in a less traditional manner. Circular charts make it easier to indicate collaboration between departments or employees but it can sometimes be confusing for people who are more familiar with seeing a hierarchical chart with a vertical structure.

9. Process-based

Process-based organisational charts communicate the flow of different work processes throughout the organisation. They usually focus on a specific process rather than the entire business. This might mean that the business needs multiple process-based charts. Aside from depicting the responsibilities and tasks of individual employees, it shows how these responsibilities relate to and interact with each other. Process-based charts are straightforward to change and adapt. This makes them a useful option for promoting speed and efficiency within the business. They're helpful for understanding a specific part of the company's work but can isolate different processes from each other.

Related: How to create an organisational chart (with types)

What are organisation charts?

Organisational charts are clear visual representations of an organisation's structure and hierarchy. These charts indicate who works for the company, their roles and responsibilities and the organisation of teams and departments. Organisational chart types might focus on a specific department or division in the business or might convey the entire structure of the company. They usually show how different individuals and departments connect to each other, for example showing a manager's direct reports.

  • Organisational charts often follow one of a few specific structures but some organisations create their own customised organisational charts to suit their needs. Depending on the type, organisational charts can fulfil a variety of different purposes. They may only include basic information like names and job titles or they might be more complex. Some of the elements that an organisation chart might incorporate include:

  • images

  • photographs

  • illustrations

  • contact details

  • reporting details

Related: A guide to functional structure: benefits and disadvantages

What are the benefits of organisational charts?

There are various benefits to having an organisational chart and companies use them for a variety of reasons. These charts are helpful because they make sure that everyone within the organisation and other important stakeholders, understands its structure and hierarchy. Companies often provide new employees with a copy of the organisational chart when they start. It's also a useful tool to find out who to contact about a specific question. Organisational chart types also helps to build familiarity and help different members of staff to get to know each other. Some of the other benefits of having an organisational chart include:

  • It makes the responsibilities of each employee clear.

  • It helps the leadership team to accommodate business growth and changes such as restructuring.

  • It helps employees to understand how they fit into the organisation.

  • It acts as a visual staff directory with contact information.

  • It helps to visualise the structure of the business and its hierarchy.

  • It can be useful for planning staffing changes and restructuring.

  • It helps employees to understand staffing or structural changes.

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