After reading this article you will learn about Organisation Chart:- 1. Meaning of Organisation Chart 2. Use of Organisation Charts 3. Disadvantages.

Meaning of Organisation Chart:

An organisation chart is a graphic means or a record depicting vividly the formal organisation structure and shows the formal superior-subordinate relationships. A chart is a blueprint of company organisation: its functions, lines of authority, and key positions.

It shows who supervises and controls whom and how the various units are interrelated. It gives visual ideas about formal relationships by showing the main lines of authority, the main lines of communications, and the flow of authority (downwards) as well as the flow of accountability (upwards) throughout all the levels of management hierarchy. It also points out job titles on the management level.

Use of Organisation Charts:

A master chart shows key positions in the managerial hierarchy. A subsidiary chart gives additional details of organisational information. These charts are included in the organisational manual. They have many uses and advantages.


They are used in orienting and inducting new employees as well, as in training programmes. An organisation chart gives us adequate information merely at a glance. Written description may not give such ideas at a glance.

An organisation chart can tell us many things:

(1) It can tell us what activities are performed and who does them.

(2) There is a clear reporting relationship pointing out who is accountable to whom.


(3) It defines the scope and limits of the job — explaining tasks to be performed at each position.

(4) It indicates the extent of authority a position holder can exercise.

(5) It describes for each job the interaction the position has with every other position. We know the interrelationship of all positions.

Disadvantages of Organisation Charts:

Misuse or wrong application and understanding of charts may result in certain disadvantages:


(1) Relationships shown on the chart may be out of date.

(2) It cannot represent precise human relationships between the boss and his subordinates.

(3) It may introduce rigidity into the relationships.

(4) It may create unwanted buck-passing and formal communications.


(5) It cannot reveal the real relationships in the informal organisation structure.

(6) Expenditure incurred on the preparation and dissemination (spreading widely) of charts may not be worthwhile in the light of their benefits.