Organizational charts show a company’s hierarchy and structure. They are useful for employees and managers who want to understand the relationships between everyone in the company and their roles and responsibilities. Beyond this, org charts can also reveal a lot about a company’s culture.
Authority and Hierarchy
The layout of an organizational chart shows the hierarchy of authority within a specific organization. It shows who reports to whom and the levels of management in the company.
Why is this important? A tall, rigid hierarchy shows that the company embraces a traditional, top-down, and centralized culture. On the other hand, a flatter structure might indicate that it favors a more decentralized and collaborative culture.
Businesses can use easy organizational charting tools to create a chart to show employees and stakeholders how they view and handle the hierarchy of authority. Once they do, it can reveal other aspects of its culture, as shown below.
It Reveals How Decisions Are Made
Decision-making and who makes crucial decisions is an essential part of a company’s culture. As with authority and hierarchy, an organizational chart can also tell us much about its decision-making processes.
Companies that value top-down decision-making typically have the decision authority resting at the top of the hierarchy. Those with a culture that encourages collaborative or a bottom-up business structure might have a more distributed approach to authority. You typically see this represented in a flatter organizational chart.
It Shows How the Business Creates Its Departments
Some companies value specialization and expertise, while others are more collaborative and agile. Both of these approaches impact their culture, right down to how they hire and create departments.
You might look at an organizational chart and see that it has distinct and separate functions and departments like customer service, marketing, sales, product development, and so on. Such a company likely falls into the first category.
However, companies also create cross-functional teams and departments, which has become very common in the past few years. In this case, they fall in the second category.
An Organizational Chart Shows an Emphasis on Titles
The importance placed on titles also says a lot about the business and can be reflected in its organizational chart. A business culture that emphasizes titles and positions may be more status-conscious, and you will see the title placed conspicuously on their charts.
On the other hand, a business culture that emphasizes roles and contributions may be more merit-based.
It is crucial to understand that this is not always so easy to deduce because what is reflected on their org chart depends on the person creating it. So, the person might add titles, roles, and contributions or omit them altogether depending on how they want the chart to look but not as a reflection of the underlying culture.
Business culture is important because it informs possible hires and interested candidates what type of company they will be working for if hired. Even though organizational charts can help you understand a business’s culture, it is only one piece of the puzzle. You should do more research for a deeper understanding, especially if you wish to apply for a job there.
