Hierarchy Chart: Definition, How to Build One, and Advantages

The most common kind of organizational chart is a hierarchy chart. A hierarchy has one group or person at the top, with individuals with less influence underneath them. In a hierarchy, members usually communicate with the person they report to and anybody who reports directly to them.

A hierarchy chart depends on various aspects such as Function, Geographical Region, and Product. These factors are a vital component for designing this style of an organizational chart. As a result, various models have emerged.

  • Firstly, a hierarchy chart organizes personnel according to their functional roles. Employees can, for example, work in finance, technology, human resources, or administration.
  • Secondly, they organize staff according to the geographical region in which they operate. Employees in the United States, for example, are classified differently by state. In a multinational corporation, employees are organized by the country they operate.
  • Finally, if a firm offers many goods and services, a hierarchy chart will assign staff to each product or service.

How to make a hierarchy chart

Define your purpose and scope 

Before you begin creating your hierarchy chart, you should decide how you intend to utilize it. For instance, if you’re planning to use the chart to determine who’s who, it’s good to include photos and contact information. Furthermore, if you intend to chart your entire organization, you will need to create multiple charts.

Gather the information

After you’ve defined your purpose, it’s time to gather the information you’re going to include in your chart. You might be able to utilize an existing personnel list or an obsolete chart as a starting point.

Some important things you should gather include photos of employees, their contact information, their role in the organization, and any other materials that help fulfill your purpose. It’s a great idea to collaborate with your HR team to identify and establish the lines of accountability for your chart.

Figure out the right platform to make your chart 

You have many options, including Microsoft Word, PowerPoint, or even excel. We recommend using online whiteboards to build and display charts as they allow you to work collaboratively with your teams online. 

Design the chart

  1. Begin with the highest-ranking position in the organization. Then list the second layer, then the third, then the fourth, and so on. It’s a great idea to work on this collaboratively with HR; if you’re using online whiteboards, you can share a link and add them to the board.
  2. Remember to connect the employees with connectors as you list them in the hierarchy chart to illustrate their relationship. If you wish to include extra information, such as staff duties and responsibilities, include it in the chart as well. 
  3. Finally, Fresco has pre-set color themes that enable you to customize your diagram as desired. Use different colors, for example, to emphasize the various departments in your org chart.

Update the chart regularly.

The business landscape is very dynamic, and things are constantly changing. You’ll need the means to maintain your hierarchy chart up to date efficiently. Maintaining your charts becomes considerably easier with a collaborative online platform like Online Whiteboards.

Advantages of Hierarchy Charts

Below we’ve discussed the advantages of using hierarchy charts:

Displays a clear reporting structure 

The benefit of a hierarchy chart is that it has clear lines of power. This allows an efficient flow of information and improved communication between the various functional groups in an organization.

Improves flow of information

Hierarchy charts allow employees to understand who to report to and who to contact if they have an issue or a question. With this information, someone from one department can contact the relevant person in another department right away. This efficient flow of information is especially beneficial in large organizations with several departments.

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