Organisation Chart

An organisation for example  a car company may have 3000 employees including workers and managers. An organisation chart is a diagram of functions, departrrients and positions of organisation and their relationships. It shows how every employee is related to other employee. Every organisation developes a chart which helps in defining managerial authority and responsibility. Figure 1.5 gives a typical organisation chart. An organisation chart provides following information : 

1. It shows how activities have been divided; for example functional or regional. 
2. It indicates hierarchical distribution of authority in the organisation. It specifies which employee will report to whom. 
3. It establishes communication link between different department and individuals. 

  A Typical Organisation Chart 

The process of making chart enable a manager to avoid duplication of work. A major limitation of chart is that it does not indicate who has greater authority at each hierarchical level. All managers who are placed at one particular level are considered to be equal. Another limitation is that it shows only formal relationships in organisation. However, it is well known fact that informal relationship develops in organisation.