Org Design, Org structure

What is an Organigram?

By: Tim Brewer

An 'organigram' or 'organogram' is a visual representation of the structure of a company. In other words, it’s an organizational chart.

Both spellings are used interchangeably. Neither is wrong. Though for clarity, organizations will usually pick one spelling and use that uniformly.

Stemming from the 1950s, the word “organigram” is more commonly used in the UK than in the US. The term 'organizational chart' - or org chart -  can be substituted. 

Rather than worrying about which term to use, it’s more important to understand what an organigram is, how to use it in the workplace, and how to develop one efficiently. 

What is an Organigram Useful for?

An organigram aims to show the way an organization works, depicting the relationships between employees in the company, as well as the hierarchy. This is a useful tool for several reasons.

Succession Planning

For your HR Department and executives, the organigram offers a wealth of information on every position in the company. This allows them an overview of the current employees and their skill sets.

It’s a useful tool to help visualize internal options when positions become available. For example, if a management position opens up, the hiring manager can easily see which employees beneath that position might be an excellent fit for the promotion.

New Hire Onboarding

The organigram shows each position in the company, who they report to, and where they fit into the scheme of the hierarchy. As a tool, new employees can use this information to help them learn their coworkers’ positions, understand their own position better, and get acclimatized with the people on their teams.

New Job Creation

Because organigrams are visually appealing, they offer a great deal of information at a glance. For workforce planning, the organizational chart can be used to easily pinpoint areas where new staff members or position creation is needed.

Interactive Org Chart - use tools to zoom, view job details, etc... © Functionly

An Organigram, by function

In the example above, a small business (11 staff) is split into four departments, made up of team member specialists (such as IT, marketing and sales). 

You can click on the people to see their titles and departments. (See below for a free trial offer to start using these powerful, but easy-to-use drag and drop org charts.)

The Root of the Word 'Organigram'

The word may be confusing to some people because it's not used in everyday business.

At its root, “organ” refers to the organization. And “gram” refers to the graphic representation or communication of the organization.

When you put the word together, it simply means a visual representation of how the company or organization is structured.

Types of Organigrams

There are four basic types of organizational structures. They are functional, divisional, matrix, and flat.

Your organigram is created based on the structure of the business. The main design feature is to showcase what the hierarchy is and how the workflow for the company is managed. This streamlines communications for staff and management.

  1. Functional. In a functional structure, all of the specialties are grouped together. So you would have departments for marketing, finance, sales, and IT, to name a few.
  2. Divisional. With companies that have several services or products, employees might be separated into divisions. For example, a clothing manufacturer may separate people based on the type of clothing – men’s wear, women’s, children’s, and accessories.
  3. Matrix. The matrix model uses both the functional and divisional models and may have people working across either function or division to cross-train and best use employee resources.
  4. Flat. In the flat model, there is no or very limited hierarchy. Employees do not answer to managers and supervisors but instead work autonomously. There may be one CEO or owner in these types of organizations.

In most structures, there will be a hierarchy. The chart clearly notes which employee supervises who and who each employee’s direct superior is. This reduces potential confusion around authority because it’s clearly organized in advance. It also streamlines communication and makes it clear who has the ultimate authority in projects and oversight.

The Importance of an Organigram

Whether you call them organizational charts, organograms or organigrams, these diagrams are essential to document the structure of a company.

For smaller companies, they can provide a good overview as you scale and grow to help develop the most productive positions and concise job descriptions. For larger companies, this is an essential tool for management and new hires.

Free Trial Offer of Functionly

Now you know what an organigram is, why not have a go at creating one for your own organization? Put people in their positions, and consider an overview of the reporting lines, accountability and departments. 

It’s a great idea to build an org chart to visualize your structure and clarify roles and responsibilities. 

Sign up for Functionly today with a free trial offer to get started with creating your own organigram.

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Feature Image: Organigram from 1943 - the National Archives office, Wikipedia, Creative Commons.

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