Chart that shows the interrelationship of various positions in an organization in terms of authority and responsibility. Every institution or business has a position that shows the position of each person in it. Each position or position has authority and responsibility that are related to each other.
Basically, there are three organizational patterns, namely line organization, functional organization and line and staff organization (organization chart). In an organization, it is very important to have an organization chart. So, what is actually meant by an organizational chart? Come on, take a look at the following explanation of the meaning of Organizational Chart, grameds!
Understanding Organization Chart
An organizational structure or organizational chart is a diagram that visually conveys the internal structure of a company by explaining the roles, responsibilities and relationships between individuals in an institution or organization.
The definition of an organizational chart describes broadly the entire company or drills down to specific departments or units regarding the roles, responsibilities and relationships between individuals in an institution or organization.
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Another definition of organizational structure is a system used to define hierarchy in an organization. This identifies each job, function and where it reports within the organization.
An organizational structure is not standard but can be developed according to the implementation needs of the organization concerned. Because there are many types of organizational structures, each has its own advantages and disadvantages.
The Importance of an Organizational Chart
Organizational charts play an important role in running an organization to avoid role confusion. Because the organization chart provides information on each person’s position, their duties and responsibilities and to whom they must report their duties.
Ultimately, it is important to improve the group’s organizational structure so that its goals are successful. The following is an overview of the importance of an organizational chart, including:
- Explain the responsibilities of each person or member in the organization.
- Explaining positions and coordination to facilitate the flow of communication between teams.
- Explaining the relationship paths between individuals in the organization so that work processes are more efficient.
- Seeing the leadership’s role in controlling and supervising employees.
- Organization chart elements.
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Organizational Chart Functions
A good organizational chart can broadly describe all parts of the company down to each specific department or unit. So the organizational chart has the following important functions:
1. Structure allows for better communication
Communication is very important in the success of an organization, with an organizational structure designed with clear communication channels can help improve good communication. For example, between interrelated departments such as the financial planning and analysis department. Both communicate and report to the Chief Financial Officer and Marketing Officer.
2. Clear reporting relationships
Everyone in the organization needs to understand clear reporting relationships in order to understand their respective responsibilities and to whom they should be accountable. Clear relationships help each party carry out their duties.
For superiors, it can make it easier to monitor the performance of everyone under them. Meanwhile, for employees, it makes it easier to know who to ask for direction or help. Apart from that, everyone can be aware of their position and authority, so they don’t exceed their limits and don’t interfere with each other’s positions, grameds.
3. Growth and Expansion
A company or organization can grow rapidly if each position is occupied by the right people. So, the function of an organizational chart or structure is to regulate how a company utilizes its resources appropriately in terms of managing management talent.
Structure can reveal weak points in an organization’s teams, because a good structure places the right people in the right positions. Over time, the organizational structure can undergo changes, both development and downsizing according to needs.
4. Efficiency in completing tasks
By designing a good organizational structure to facilitate project completion, it helps project managers identify the human resources available to carry out the responsibilities of each department.
5. Know what went wrong
When a project or an organization’s work goes poorly, it can be examined because it is likely that the organization is poorly structured. For example, work that does not meet targets, is completed past the deadline and so on. It could be because the tasks given are not in proportion so that they conflict with other managers.
6. Adjust to company needs
Every company or organization has a different structure according to the company’s needs, so the structure must be created to meet the needs for structuring, development and so on. So, not all organizations can be considered the same because the resources needed by each industry can vary.
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Organizational Chart Elements
Organizational chart elements include:
1. Job specialization
To see the extent to which tasks in the organization are divided into several separate jobs.
2. Departmentalization
The basis used to group jobs together. These can be processes, products, geographies and customers.
3. Chain of command
An unbroken line of authority that stretches from the top of the organization to the bottom and explains who is responsible to whom.
4. Span of control
The number of subordinates a manager can direct efficiently and effectively.
5. Centralization and decentralization
Centralization refers to the degree to which the level of decision making is concentrated at one point within the organization. Decentralization is the opposite of centralization.
6. Formalization
The extent to which jobs within the organization are standardized.
Types of Organizational Structure in Companies
There are 6 types of organizational structures known in a company, including the following:
1. Functional Organizational Structure (Functional Structure Organization)
Functional organizational structure is the most common type of organizational structure used by a company or organization. In a functional organizational structure, the division of work is then carried out based on the function of each management.
These include financial management, marketing and human resources management, production management and others. Every employee who has the same skills and expertise will be grouped into one work unit. This is why this type of organizational structure is very appropriate to be applied to an organization or company that only produces a few types of products or services.
The advantages of this type of organizational structure can reduce company operational costs and make it easier for the managerial team to monitor and evaluate employee performance.
However, implementing this type of organization also results in difficulties in discussing and communicating between one work unit and another. In addition, general management training for employees also has its own limitations.
2. Divisional Organizational Structure
A divisional organizational structure is a type of organizational structure that groups based on similarities in products, services, markets and geographical location.
This type of organizational structure is usually applied to medium to large scale companies because the operational costs incurred will be higher when compared to a functional organizational structure.
By implementing a divisional organizational structure, your company will have easier management because it breaks down divisions within the company into smaller parts. Meanwhile, the weakness lies in the problem of resource allocation, as well as the distribution of costs that must be incurred by the company.
3. Line Organization Structure
In a line organizational structure, the relationship between superiors and subordinates occurs directly and vertically. Where from the highest management to employees with the lowest positions in the organizational structure, this is connected by a line of command or line of authority.
Therefore, this type of organizational structure is also better known as the military organizational structure. The advantage of using a line organizational structure is that the unity of leadership lies with one person. while the weakness is the dependence on one person in the hierarchical structure. This type of organization is very appropriate if applied to small organizations such as rice shops, tegal stalls, workshops or neighborhood associations.
4. Line and Staff Organizational Structure
This organizational structure combines several combinations of line organizational structures with the principle of command, but the leadership’s duties will be assisted by several staff. Each staff in the line and staff organizational structure has a role in providing suggestions, input, assistance, ideas and new ideas as well as information data needed by their leadership.
The line and staff organizational structure is very suitable when applied to small-scale companies because it has the advantage of ensuring high moral discipline of employees in accordance with their respective job descriptions. However, employee solidarity is still lacking because many of them do not know each other.
5. Matrix Organizational Structure (Matrix Structure Organization)
The matrix organizational structure is an organizational structure which is a combination of a functional organizational structure with a divisional organizational structure with the aim of complementing each other and covering the shortcomings found in the two organizational structures. This type of organizational structure is often known as a project organizational structure because each employee in the functional organizational structure work unit must work on organizational projects assigned to him.
The implementation of this type of organizational structure causes a command system where an employee is required to provide reports to two leaders, namely the leaders in divisional and functional work units.
The matrix organizational structure is very suitable for use in large-scale companies up to multinational companies because of its ability to achieve the level of coordination that is very necessary in responding to the multiple demands of the corporate environment.
However, this structure also has weaknesses. Where sometimes these double demands can cause confusion.
6. Committee or Project Organizational Structure
This type of structure is used by companies, every leadership task and other special tasks must be carried out and accounted for collectively by a group of officials in the form of a board or committee.
The committee organization usually consists of a committee leader (Executive Committee) who is a leader with line authority and a staff committee who are employees with staff authority.
The advantage of this type of organizational structure is that decision making takes place well through joint deliberation between shareholders and the board. Meanwhile, the weakness lies in avoiding responsibility if a problem occurs.
Examples of Positions in Organizational Structure
There are several job titles that will at least always be displayed in an organizational structure. However, it is not limited to the following four positions:
1. Directors
Directors are people who are responsible and have the authority to manage a limited liability company. The board of directors is an important part, its position is at the top of all positions.
In general, a company has one main director, three deputy main directors and six directors. However, this can depend on the type of company and its needs. The board of directors has the authority to make decisions regarding the company.
Directors must also be able to take responsibility for every company decision. The function of the board of directors is to determine the company. For example, what type of business will be developed and what type of products should be produced. Directors are also the people who organize the company’s activity schedule.
2. Manager
The position of manager is a position that is responsible for integrating various variables and characteristics of its employees in achieving company goals. The manager’s job is to make directions and decisions, policies, and develop employee potential in order to advance the company.
Managers are usually positioned in each division or department and are the main managers. For example, marketing manager, HRD manager, production manager and so on. The manager will receive reports from the team leader and other members and then submit them to higher levels.
3. Division or Department
This section is led by the division head who has the task of leading the task areas of his department. There are various departments or divisions in a company’s organizational structure according to the company’s characteristics. Among them are the marketing and sales department, HRD & GA department, production department and so on.
4. Administration and Warehouse
This position consists of accounting, CMT and cashier. His job is to manage the company’s finances and record every expense and income and even take care of matters related to outsourcing .
Steps to Designing an Organizational Structure
1. Design the organizational structure in accordance with the vision and mission
Before creating a company organizational structure, make sure that the vision, mission and goals or targets of the organization have been clearly defined. It is not uncommon for some parties, especially startup companies, to rush into creating a structure without paying attention to clarity about what is expected from the company organization they are building.
2. Design the organizational structure after formulating the business
In creating a company organizational structure, it is very important to know the business goals to be achieved. Formulate what business you will run and what your goals are.
3. Consider the talents and talents of workers
It is mandatory to carry out analysis and observation of the possibility of retaining skills in workers. It could be that your organization has had a lot of talent stored, but it hasn’t been found for company growth.
4. Consider the age of the worker
In forming a company’s organizational structure, the age factor is one that should be considered. That way, you are able to place them in the positions that have been designed.
5. Positions or titles that are not in accordance with employee competencies
Forming the right organizational structure by considering the talents and abilities of workers is ideal. However, when this does not always materialize and causes problems in the field, it is necessary to evaluate the existing structure.
So, that’s about the meaning of an organization chart and its functions. A good organizational structure greatly influences the success of work in an organization.
If Grameds is still confused, and needs references regarding the complete meaning, function and types of organizational charts, you can visit the mudabicara.com. Hopefully this article inspires you!