Briefly explain seven of the guidelines to follow in developing an organizational chart? (200+ words)
The organization chart shows the hierarchy in organizational structure and reporting. Organization charts help in picturing relationships between position and reporting,
1. The chair person of the board is also not the CEO or President of the company
This helps to avoid conflict of interest in terms of corporate governance, fair executive compensation, performance management etc.
2. The title president is for division heads
The firm may have separate product or service divisions. The heads of each such division have their own milestones, responsibilities and full control of their division. They are called presidents.
3. The firm has a COO. The COO reports to the CEO.
The COO offers the big picture view of the company, in terms of divisional performances, to the CEO
4. The presidents of the divisions report to the COO.
The COO gets reports on the functions of divisions and directs them
5. The functional heads-CMO, CFO, CIO, CTO, V.P-R&D, V.P-HRM etc report to the CEO
The CEO gets a bird’s eye view of the various functions in the firm through the executives
6. Every executive has only one boss
Reporting to many bosses’ results in confusion in communication, responsibilities sharing, bureaucracy and ego clashes. This also delays decision making. Reporting to a single boss helps in unity of command
7. Decentralize whenever possible using a form of divisional structure
Decentralization in easy communication, quick decision making and empowerment