During the rampant growth of the Industrial Age, the modern organization chart gave employers structure in a time where real-time communication and collaboration weren’t possible. The organization chart also helped employers to develop a hierarchy, allowing for goals to be properly measured and maintained. In today’s highly communicative and dynamic business world, do organization charts still have importance? We’ll explore this topic in today’s Astronology®.
The Purpose of Organization Charts
Orgcharting.com explains that organization charts serve four purposes:
- Watching Workforce Levels: An organization chart can give the HR department a much-needed bird’s eye view of how departments are staffed. This allows them to maintain appropriate staffing levels and make proper adjustments when needed.
- Budgeting: When organizing annual company activities and addressing departmental needs, an accurate organization chart can assist in preventing overspending.
- Communicating Better: Since the organization chart depicts the relationship of employees within a business, it can help employees to identify who they need to contact for specific directions or questions.
- Defining Roles: Organization charts can help employees to define their roles and clarify how their duties help an organization achieve success.
Do Organization Charts Fit in a Fast-Paced, Dynamic World?
Despite the importance of these factors in today’s workforce, some have questioned if the use of organization charts is becoming outdated. Aaron Dignan explains in his “The Org Chart is Dead” article, “The problem with the not-so-modern org chart is that it presupposes that people generally hold one role, have one boss, and that both of those states are semi-permanent, at least in-so-far as the chart is worth printing and distributing.”
For many of today’s industries, business moves fast and continues to become more dynamic. Depending on the industry, some organizations rely on self-organization and use collaborative software to keep in communication with teammates. In some small organizations, employees may have hybrid responsibilities making it difficult to categorize them on an organization chart. Eric Apps in his TLNT.com article noted “A traditional hierarchy still makes sense for some, but today’s workforce is increasingly requiring companies to launch virtual divisions for fast expansion or to access specific skills.” He also points out that these smaller, adaptive divisions become a “competitive threat” since they do not follow traditional organizational models.
Researching and planning for future design structure adjustments are a must for all organizations, and are even more critical for organizations in faster growing industries. For industries that don’t see as much change, being more flexible with their current organization charts still may be necessary. Perhaps keeping the organization chart on-line, for easy employee access with quick organizational updates, is appropriate.
What about your organization? Share in the comments section below if your organization has addressed concerns over its organization charts!
Richard Virgilio says
At the end of the day it’s a matter of every person in an organization knowing who he or she reports to (who signs the paycheck, who has authority to fire, who he or she is accountable to for performance, and who can direct work) and who reports to him or her (same authorities just reversed). For a complicated position description, that could be a number of lines of authority that “cross organizational boundaries,” requiring coordination and communication between those competing “authorities.” Been there, done that, and is frequently encountered in military circles. As long as it is clear and well-defined it works OK. The most difficult part is finding/naming a “referee” when two authorities conflict. Somebody has to make the call on which side of the line the effort must go. Awareness and understanding of the organization’s mission makes it work.
Cassandra Carver says
Thank you for sharing your thoughts, Rich!