An org chart, or organization chart, is a diagram that shows the structure of an organization and the relationships and relative ranks of its departments and positions. A company organization chart is often used by companies to aid reporting and decision-making. It can also help with employee relations. And it’s important when bringing on new hires who need to be oriented to where they fit in their company’s hierarchy.
However, some small businesses opt not to have an org chart at all because they don’t want employees fighting over raises or promotions— or just getting the wrong idea about the chain of command within a company that has very few employees. However, there is no need to worry because Venngage offers a solution to outdated and confusing organizational charts!
In this article, we’ll run you through the 10 types of org charts for small businesses as well as org chart examples and cool templates that you can use.
This type of org chart is more common in larger companies with many subunits, but it’s also used by startups to quickly communicate the reporting structure within the company and where employees fit into that process. It can be especially useful for product development teams or customer service teams who must coordinate their work with other parts of the company, as well as outside partners or clients.
Creating an org chart of this type is most useful when a business has several divisions or departments that all support the core mission of the company, even though they sell different products/services and might have completely different structures inside them.
For instance, if you have an e-commerce site that also has an events division, you might have one org chart that shows how all of your employees are related to each other, and another organization chart for the e-commerce site alone.
Take a look at this Venngage template that shows the two org charts that shows the two divisions of the company:
This is when teams are broken up by area of specialty or skill set. In other words, everyone is either in sales, customer service, or product development. This type of organization can work very well when a business has small- to medium-sized teams that work closely together with a little overlap. That said, it’s not always best for small companies because they risk losing out on top talent who want to shine across the entire company rather than just within their assigned functional area.
Get organized using a functional structure using this template from Venngage:
Project Management Structure
As its name suggests, this type of business organizational chart is organized by projects and workstreams. The upside to this type of structure is that it enables people who work together daily to form teams around common goals or tasks, even if they report to different managers. When the team is organized by projects rather than departments, managers can assign employees based on what specific skills are needed for upcoming projects.
The hierarchical chart is suitable for larger companies, especially those that have a long history and many layers of management or rapidly growing businesses with complex systems like C-Suite reporting that need to be clearly mapped out.
On the plus side, everyone knows exactly where they stand in the company culture and chain of command. However, as a business grows, it can be difficult to implement changes—even if everyone is on board with them—because so many people have a say in how things are structured.
Here’s a Venngage template of a hierarchical structure if you’re thinking of using this for your business:
This type of org chart integrates elements of both matrix structure and hierarchical structure by breaking up reporting lines based on responsibilities or skill sets, but still organizing those teams within larger divisions or managers. It’s only appropriate for organizations that have quite a few employees who all need to work together across products and functions but you want to maintain some kind of overall organization around departments or units.
Informal Management Structure
This org chart is the “do what you want” version. Employees aren’t assigned to any particular managers, team, or department. They work on whatever they feel like working on in an ad hoc manner.
While it’s easy for companies with few employees to do this, it can be tricky for larger companies because there has to be enough trust and buy-in from employees that everyone knows what everyone else is doing and where their work fits into the grand scheme of things.
Here’s an example of this type of chart:
This type of org chart isn’t used very frequently in small businesses, but parallel structuring describes when several teams could do the same job well but only one team is given the official go-ahead by management. The other teams either continue to run as informal groups or disband entirely. This is a costly organizational structure because the main team has to do all of the heavy lifting, while the others are essentially freelancers who don’t have any guarantees about their employment status—they might even get laid off if wider business changes occur.
Here, people aren’t assigned to specific teams or divisions; instead, they coordinate with different members based on projects and workstreams via email, video conferencing, or similar means of communication. This type of org chart works well for small companies that tend to be more distributed (e.g., employees that live in different cities or countries), but it can cause confusion and slow down work if there’s high turnover or new hires who need to get up to speed on how the company does things.
This type of org chart is ideal for small companies with a flat hierarchy where employees tend to work in small, task-oriented groups rather than reporting to managers. Within each team, whoever has the most expertise or experience is tasked with leading that group until they feel like passing the leadership baton onto someone else within the group. It can be difficult to manage this type of structure because “team leaders” don’t actually have any more say than their peers— which means some employees might not take them seriously from a management standpoint.
For more templates of Venngage diagrams, check out our library containing hundreds of samples to get you started. Venngage includes a drag-and-drop feature, which means you can finally say goodbye to dull documents, outdated data, and confusing organizational charts or flow charts!