Organizational Chart Skills

Best Organizational Structure for Small Business

As for a small company, the organizational structure chart must be concise and complete so that the whole company can move forward, with the least expense, normally and smoothly.

The responsibility of every fragment is as the following:

Best Organizational Structure for Small Business

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5 Elements of Organizational Structure Design

The organizational chart is a kind of diagram used to show the layout of personnel in a company, which tells us all the links between anyone in the organization. With this awesome chart, you can check for useful information as quickly as possible. It’s convenient for stuff to cooperate with each other. There are 5 key elements you have to keep in mind when drawing an organizational chart.

Work Specialization

Work specialization means the specific degree the employee has acquired. This element is often used to measure how task in an organization has been assigned to each person for most of the time the entire job cannot be done by one individual. Work specialization plays an important role in the direction of assignment distribution. That’s why specialization is called one of the most significant elements in organizational chart structure design.

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Adminitration Department Org Chart Example

The administration department org chart is a graphical illustration of the roles and structure of this department. Administration department is very crucial in an organization that every department could not live without. It’s responsible for maintaining day to day administrative services in order to help the company run smoothly. Here is a simple administration department org chart template created based on functions.
administration department org chart

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Benefits of Org Chart: Little Known Facts

Benefits of Org Chart

Org charts can benefit business a lot; therefore they become very popular with enterprises. Here are the top reasons why people use org chart.

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Main Disadvantages of Functional Organization Structure

In the functional structure, such as shown in the following Facebook organizational chart, functions are separated into different groups, resulting in some defects. Here are the major disadvantages you must consider:

facebook-organizational-structure

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Main Advantages of Functional Organization Structure

Functional organization structure is optimal for small businesses or companies producing standardized goods or services.

Functional Organization Structure Main Advantages:

  1. Offers a high level of specialization.
  2. Employees are possible to become experts.
  3. Staff working skills can be effectively improved.
  4. could enhance the work efficiency and productivity due to the specialized skills and technology.
  5. Employees are highly motivated as they see clearly their career path within the functional units.
  6. Functional specialization can minimize the cost of operation.
  7. Leads to high-quality technical problem-solving.

vertical org chart

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Functional Organizational Structure Introduction – Advantages and Disadvantages

When referring to the functional organizational structure, employees are grouped based on their roles and functions, resulting in functional units such as marketing, HR, finance, etc. Generally, the heads of these specialized units will report to the top management of the company. According to the company’s size, the functional units might be further divided into smaller units. The sub-division type of organizational structure seems to be the most common organizational structures that many companies have applied.

construction company org chart

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Org Charts for Easier HR Management

Besides illustrating the workforce, org charts can be applied by HR managers to handle some other basic work more easily. See how they help below.

Specify Work Responsibilities

In addition to the basic information, org charts can be used to illustrate more details about staff such as work responsibilities. When duties responsibilities are clearly delineated, they can be fulfilled more efficiently. If a certain process goes wrong, the person in charge can be found out at once to seek for remedies.

Visualize Work Relationship

With the reporting relation clearly shown, the working relationship can be understood at a glance. For example, in a project, one should figure out whom to partner with, whom to report to and who can offer help.

Org Charts for Easier HR Management

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Showing KPI in Org Chart

KPI is shorted for key performance indicator. It is a type of business metric used to evaluate factors that are crucial to the success of an organization. It demonstrates how effectively a company is performing to achieve key business targets and let organizations know if they are on track. A KPI is a performance measurement tool, it can be associated with an org chart. By presenting the KPI in an org chart, you can clearly identify the quantifiable performance measures for each position.

Here shows a road construction company’s organizational chart:

Road Construction Company Org Chart

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Basic Principles of Organizational Structure

Organizational structure is the framework of a company through which individual work can be effectively coordinated and managed. A good organizational structure should be developed based on the following principles:

Strategy-oriented

The ultimate goal of organization design is to achieve the strategic objectives. Therefore, the design should aim at serving to reach the goals. It should be designed with the optimal position arrangement that makes the most benefits for the final goals.

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