Organizational Charts Are Not Organizational Structure

The organizational structure is not defined strictly by organizational charts. In other words, organizational charts do not an organizational structure make. This seemingly obvious point is sometimes forgotten. The organizational chart is a one-dimensional description of the organizational structure chiefly for purposes of being able to begin to explain the structure to third parties or internal parties who are unfamiliar with actual activities performed, how the personalities of the position occupants influence behavior, and how the organization actually strives toward completing business goals (Gibson, Ivancevich, & Donnelly, 1994). Organization charts show formal reporting relationships much like a road map show roads but none of the detailed topography or actual flow of communication traffic. An organizational chart can be deceptive because it masks the immense complexities of how the organization works to accomplish the goals for which it was designed.

The actual organizational structure is a highly complex and abstract concept. Organizations are structured around four basic organizing principles:

• Division of labor;
• Bases of departmentalization;
• Department size;
• Centralization of authority.

Decisions by the founders and executive management have determined the structure of the organization. Moreover, these decisions were/are influenced by the managers themselves, job designs, differences in individuals, job competencies, technology transfer, environmental uncertainty and overall corporate strategy. The structure of the organization and its resulting effectiveness is influenced by many factors and exerts an influence on employees, customers and the environment.

Reference

Gibson, J.L., Ivancevich, J.M., & Donnelly, J.H., Jr. (1994). Organizations: Behavior, structure, processes (8th ed.). Boston, MA: Irwin.