Organisational chart: definition, types and how to create one in 2026

A company organisational chart is the graphic representation of a business’s organisational structure: a visual diagram illustrating the roles, responsibilities, hierarchical levels and interdependencies between the various functions, areas and people that make up the organisation. The term “organigram” comes from the Greek organon, “tool” or “organ”, and gramma, “writing” or “drawing”: literally, the drawing of the organs. It is not a description of corporate culture, not a process manual and not a performance appraisal system: it is the map of the formal structure, the one that answers the questions “who decides what”, “who reports to whom” and “how authority is divided within the organisation”. A well-designed organisational chart is, as Randstad explains in its guide to organisational management, “a fundamental tool for improving internal communication, clearly defining responsibilities and facilitating human resources management” (Randstad, 2026). A missing, implicit or outdated organisational chart, by contrast, is an operational risk, a governance risk and, as we shall see, a brand risk too. The strategic relevance of the organisational chart is proportional to the complexity of the organisation. In a five-person family business, the organisational structure is often implicit and it works: everyone knows whom to turn to and who decides what, because information flows naturally in shared physical spaces. In a fifty-person business, that implicitness begins to create inefficiencies: overlapping roles, decisions not taken because nobody feels authorised, information that does not reach where it is needed. In a five-hundred-person business, the absence of an up-to-date, communicated organisational chart is a serious operational problem. As the literature on organisational management documents: when people do not know whom they report to, what their precise responsibilities are or how communication flows, confusion, delays and inefficiencies inevitably arise and undermine the achievement of strategic objectives (STRTGY, 2026). In this guide, written by the strategy team at Bliss Agency, you will find:

- the full definition of an organisational chart, with etymology and history;

- the five main types of organisational structure, with their advantages, disadvantages and contexts of application;

- how to read an organisational chart: symbols, lines and conventions;

- how to build an effective organisational chart in six operational steps;

- the digital tools most widely used in 2026 to design and manage the organisational chart;

- the link between the organisational chart and brand governance, the perspective that no Italian guide addresses;

- the 2026 trends and an FAQ on the questions most frequently asked by managers and business owners.

1. The history of the organisational chart: from the army to the agile structure

Military origins and the first industrial representation

The graphic representation of command structures is as old as military organisation: Roman armies had codified hierarchies (legate, tribune, centurion, optio) expressed in chains of command that could be communicated visually. The first modern organisational chart in the proper sense is generally attributed to Daniel C. McCallum, superintendent of the New York and Erie Railroad in the United States, who in 1854 drew a tree-shaped representation of the railway’s organisational structure to solve the coordination problems of a rail network with hundreds of employees spread across thousands of kilometres. Management literature regards the “McCallum Organigramme” as the first documented example of a formal company organisational chart. The chart was published in 1855 by George Holt Henshaw: it was an inverted tree, with the root at the top (management) and the branches at the bottom (the railway stations), a convention that survives unchanged in modern hierarchical organisational charts.

The 20th century: Taylorism, the matrix and horizontal structures

The 20th century brought three revolutions in organisational structure. The first was Taylorism (early 1900s): Frederick Winslow Taylor’s scientific division of labour produced vertical functional structures, with rigid specialisations and clear lines of command. The second was the divisional revolution (1920s-1950s): Alfred Sloan at General Motors invented the multidivisional structure, in which the company is organised not by function but by autonomous product lines or geographical markets, each with its own management. The third was the matrix (1960s-1970s): in large aerospace and engineering companies, a structure took hold that combined functional specialisation with project flexibility, with every employee reporting to two superiors at once (the functional head and the project manager). As iSpring documents in its analysis of organisational charts, in the 1970s “every company produced some version of a matrix organisational chart, which then evolved into horizontal structures designed to foster the autonomy and independence of departments and their internal processes” (iSpring, 2026).

2010-2026: from hierarchy to agile, distributed organisation

The 2010-2020 decade brought disruption to traditional organisational structures on two simultaneous fronts. The first was the agile model, born in software development and later adopted across many business functions: autonomous cross-functional teams, flat structures, distributed decision-making, short planning and execution cycles. The second was digitalisation and remote working, accelerated by the 2020 pandemic: organisational structures had to function without physical proximity, making formal clarity of roles even more critical than in co-located workplaces. 2026 adds a third dimension: AI as a cross-cutting element that reshapes organisational structures by introducing new functions (Chief AI Officer, AI Center of Excellence, AI Marketing team) and redistributing tasks between people and automated systems.

2. The five types of organisational structure

There is no universally correct organisational chart. The choice of organisational structure depends on the company’s size, sector, competitive strategy, organisational culture and the complexity of the activities to be coordinated (Randstad, 2026). The five main types:

Type	Organising principle	Advantages	Disadvantages	Suited to
Functional structure	People are grouped by specialisation: marketing, finance, operations, HR, each with a functional head	Clear reporting lines; development of specialist expertise; economies of scale in support functions	Risk of silos between departments; slow cross-functional communication; difficulty responding quickly to the market	SMEs with a single product or market; organisations with established processes
Divisional structure	The company is organised by product line, geographical market or customer segment, each with relative managerial autonomy	Focus on market specifics; greater accountability for divisional managers; flexibility of response by division	Duplication of support functions (each division has its own marketing, HR, etc.); possible internal competition for resources	Large companies with diversified products or markets; multinationals operating in several countries
Matrix structure	Combines the functional structure with a project- or product-based one: each employee reports to two managers simultaneously	Efficient use of specialist resources; easier cross-functional communication; flexibility in managing complex projects	Ambiguous authority (dual chain of command); conflicting priorities; high management complexity	Companies with complex, temporary projects; consultancy organisations; large technology companies
Flat (horizontal) structure	Few hierarchical levels, with broad decision-making autonomy for teams and little distance between management and operational staff	Fast decisions; greater employee autonomy and motivation; direct communication across all levels	Hard to scale beyond a certain size; role ambiguity without a clear structure; risk of misaligned decisions	Start-ups; creative organisations; companies with a collaborative culture and small teams
Network structure	A central nucleus of core competencies, with non-strategic functions outsourced to specialist partners, suppliers and collaborators	Maximum flexibility; lower fixed costs; access to the best specialist expertise without bringing it in-house	Reduced control over external quality; risk of diluting organisational identity; coordination complexity	Digital companies; consulting boutiques; asset-light brands with outsourced production

3. How to read an organisational chart: symbols, lines and conventions

Knowing how to read an organisational chart is a basic skill for any manager or business owner. The standard graphic conventions are few and stable:

- Boxes or rectangles: represent organisational positions (roles, functions or people). Each box typically includes the role title and, optionally, the name of the person who holds it.

- Solid vertical lines: represent direct hierarchical authority (reporting lines). Whoever is above the line has authority over whoever is below.

- Dotted or horizontal lines: these represent functional, advisory or coordination relationships without direct hierarchical authority. In matrix structures, they indicate the second reporting line (the project manager vs the functional head).

- Vertical position: indicates the hierarchical level. Roles higher up carry greater decision-making authority. General management or the board of directors sits at the top; operational roles at the base.

- Horizontal position: indicates equal authority between roles at the same level. Two functions at the same level of the organisational chart formally carry the same decision-making weight in the system.

This is the point at which the organisational chart stops being a document and becomes a tool of brand governance: the formal structure states who decides what, and every ambiguity in the chart translates into real ambiguity in day-to-day decisions. The distinction between line (those who produce the company’s core value) and staff (those who support the line with service functions) is another important convention: in large company organisational charts, staff functions (HR, legal, communications, IT) are often shown to the side of the main chain of command, to indicate that they exercise advisory rather than hierarchical authority. This is the point at which the organisational chart stops being a document and becomes a tool of brand governance: the formal structure declares who decides, and every ambiguity in the chart translates into a real ambiguity in day-to-day decisions.

4. How to create an effective organisational chart: six operational steps

1. Define the purpose of the organisational chart. A chart for internal communication (helping employees understand the structure) differs from one for external communication (presenting the organisation to investors or partners), and differs again from one for strategic planning (mapping gaps and overlaps). Before drawing any diagram, be clear about who it is for and what it is for. A properly built organisational chart must be concise, comprehensive and easy to consult (Accademia del Valore, 2026).

1. Gather the structural information. List all existing positions, formal titles, current reporting lines and hierarchical levels. In many Italian SMEs this phase reveals the first surprise: the formal structure does not match the real one. The CEO decides on areas that formally belong to the sales director; the HR manager has no authority over hiring in individual divisions; the marketing manager reports to the CFO rather than the CEO. Documenting the real structure, not the ideal one, is the prerequisite for any useful revision.

1. Choose the type of structure. Of the five main types described in the previous section, identify the one most consistent with the organisation’s size, strategy and culture. If the company is growing rapidly, its current structure may not be the best one for the next phase: the moment you draw up the organisational chart is also the moment to assess whether the organisational structure is still fit for the strategic objectives.

1. Build the hierarchy from the top down. Start at the apex (board of directors, CEO, general management) and work down level by level, adding the first-level functions (the CEO’s direct reports), then the second-level functions, and so on. Keep the number of direct reports for each position manageable: more than seven or eight direct reports for a single manager rarely makes for effective management.

1. Check consistency with actual processes. A properly designed organisational chart must reflect the reality of decision-making processes, not what one would like it to be. Submit the draft to managers from different functions and ask whether the reporting lines drawn match those actually in operation. The discrepancies that emerge are valuable information: they show where the formal structure does not match the informal one, which is often the source of the main communication and coordination problems.

1. Keep the organisational chart up to date. A chart last updated a year ago and never revisited is often more harmful than having no chart at all: it communicates a structure that no longer matches reality, creating confusion for anyone trying to find their way around the organisation. Maintaining the chart should be assigned to a specific function (typically HR or the CEO’s office) with a defined review cycle (typically every six months, plus at every organisational restructuring).

5. Tools for creating an organisational chart in 2026

Tool	Type	Strengths	Suitable for	Indicative cost
Lucidchart	Web-based SaaS	Professional templates, real-time collaboration, integrations with G Suite and Microsoft	Distributed teams, complex organisational charts	€8-16/month per user
Microsoft Visio	Desktop + cloud	De facto standard in enterprise companies with a Microsoft ecosystem; very powerful	Enterprise companies with a structured IT function	€5-15/month (Microsoft 365)
Miro	Digital whiteboard	Real-time visual collaboration, excellent for workshops and structural brainstorming	Agile teams, organisational workshops	Basic plan free; Pro €8-16/month
Canva	Web-based design tool	Aesthetically refined templates, easy to use, high-quality visual output	SMEs and professionals without technical skills	Free basic; €13/month pro
OrgChart / ChartHop	Dedicated HR tool	Integration with HRIS, automatic updates from HR data, structural analytics	Companies with a structured HR function and centralised data	From €5/month per employee
Notion	Collaborative workspace	Organisational charts integrated with documentation, processes and OKRs in the same tool	Start-ups and agile teams with a documentation culture	Basic plan free; Pro €8-16/month

6. Organisational chart and brand governance: the link nobody names

There is a structural relationship between the organisational chart and brand governance that most guides to organisational charts ignore entirely, yet which is operationally critical for any company with a significant brand: the organisational structure determines who makes decisions about the brand. And if that structure is implicit, ambiguous or out of date, brand decisions are made without a clear system, producing inconsistent communication, a diluted identity and the loss of brand equity over time. In practical terms: who approves the tone of voice of external communications? Who decides whether a new product is consistent with the brand’s positioning? Who has the authority to change the visual identity system? Who manages a reputational crisis, and through which approval chain? Without these answers codified in the organisational chart and in the brand governance system, these decisions are taken differently every time they arise, by different people with different criteria. The result is the communication fragmentation that silently erodes the brand equity built up over years of consistency. The risk is particularly acute in three situations typical of the life cycle of Italian SMEs. The first is biographical concentration: in companies founded by a recognisable entrepreneur, every brand decision is taken by the founder, often with no formal, documented process. When the founder is absent, or when the company grows beyond what one person can directly oversee, the system breaks down. The process of founder-independent branding starts precisely here: formalising in the organisational chart and in the Decision Framework who holds authority over brand decisions when the founder is not operationally present. The second is generational transition: a change of leadership is the moment when brand decisions risk being redefined unilaterally by the new leadership, with no system to ensure continuity of values. The generational continuity of the brand requires brand governance responsibilities to be explicitly documented in the organisational chart and in the governance documents before the change of leadership. The third is the M&A transition: in acquisition due diligence, the clarity of the organisational chart and of the brand decision-making system is one of the factors that affect valuation. A company without an up-to-date organisational chart and without a clear allocation of brand responsibilities is perceived by the buyer as riskier. Bliss Agency’s Brand Advisory M&A always includes reviewing and formalising the organisational chart and the brand governance system as part of preparing the company for the capital transaction. Brand governance is not a function separate from the organisational chart: it is the system that assigns brand responsibilities to specific functions and roles within the existing organisational structure. A company with a clear organisational chart and documented brand governance is a company that can grow, change leadership and face crises without losing the identity it has built over time.

7. The 5 Ws of the company organisational chart

- Who: Any organisation with more than one person and a structure of responsibilities to clarify. Formally, the organisational chart is a mandatory tool for companies subject to certain regulations (health and safety at work, D.Lgs. 81/2008; privacy roles under the GDPR). Strategically, it is an effective management tool for any organisation with more than ten to fifteen people.

- What: The graphic representation of the formal organisational structure: roles, responsibilities, hierarchical levels and reporting relationships. It is not a chart “of people” (which changes every time someone joins or leaves) unless by choice: it can represent roles regardless of who holds them at any given moment.

- When: When the company is founded (to clarify the decision-making structure from the outset), at every significant organisational restructuring, at every change of leadership, before an M&A transaction or a generational handover, and whenever strategic responsibilities are updated. At a minimum, an annual review.

- Where: Within corporate governance documents (articles of association, organisational manual), communicated internally to all employees, available to managers on HR systems, and shareable selectively with partners, investors and supervisory authorities. Many companies publish simplified versions of their organisational chart on their corporate website.

- Why: Because clear reporting lines, precise definition of responsibilities, fewer organisational conflicts and more effective communication between departments are the direct benefits of a well-structured organisational chart (Geoclever, 2026). Because organisational transparency promotes clarity about career paths and helps build a solid corporate culture (Accademia del Valore, 2026). And because without a documented structure, critical decisions, including those on the brand, are taken without a system, producing inconsistency over time.

8. 2026 trends: the organisational chart in the age of AI and distributed work

New AI functions in the organisational chart

In 2026, the most advanced organisations are adding new functions dedicated specifically to artificial intelligence to their organisational charts: Chief AI Officer (CAIO), AI Center of Excellence, AI Marketing Lead. These are not decorative roles. They carry specific operational responsibility for AI system governance, output quality, compliance with the European AI Act and the integration of AI into business processes. In companies that have not yet formalised these functions, different teams make decisions on AI use in a fragmented way, with a risk of both operational and brand inconsistencies. Bliss Agency covers this territory through Corallo AI, its operational artificial intelligence division, which supports companies in the structured integration of AI into their marketing and communications processes.

The fluid organisational chart: structures stable in their principles, adaptive in their teams

The most significant organisational trend of 2026 is not the end of hierarchy but its recalibration: the most effective organisations have stable structures at the level of functions and strategic responsibilities (who decides what) and fluid structures at the operational level (how teams are assembled for specific projects or objectives). The 2026 organisational chart is no longer a static document that changes every time someone joins or leaves: it is a hybrid system with a stable core (the structure of functions and responsibilities) and a flexible periphery (the composition of project teams). Modern tools such as OrgChart, ChartHop and HRIS integrations make it possible to manage this duality by updating the variable component automatically, without having to redraw the entire organisational chart by hand every month.

Regulatory compliance as a driver of formalisation

In 2026, two pieces of European legislation are accelerating the formalisation of organisational charts, even in SMEs that previously did without them. The CSRD (Corporate Sustainability Reporting Directive) requires the documentation of ESG governance responsibilities, including the formal designation of roles responsible for sustainability. The AI Act (EU Regulation 2024/1689) requires the designation of those responsible for high-risk AI systems, with a documented chain of accountability. Both require certain functions to be explicitly mapped in the organisational chart and in governance documents: not as a bureaucratic exercise, but as a system of responsibility that an external audit can verify. Bliss Agency’s business advisory includes an assessment of whether the organisational structure is adequate against these regulatory requirements.

FAQ: Organisational charts, the most frequently asked questions

What is an organisational chart, in simple terms?

An organisational chart is a visual diagram showing the structure of an organisation: who does what, who reports to whom and how roles and responsibilities are divided. It is the “map” of the organisation, answering the fundamental questions about hierarchy and the distribution of decision-making power. Each role or function is represented by a box; the lines connecting the boxes indicate reporting and authority relationships. A well-made organisational chart is concise, comprehensive and easy to consult (Accademia del Valore, 2026).

What are the most common types of organisational chart?

The five main types are: the functional structure (organised by specialism: marketing, finance, HR, etc.), the divisional structure (organised by product, geographical market or customer segment), the matrix structure (a combination of functional and project-based, with a dual reporting line), the flat structure (few hierarchical levels, high team autonomy) and the network structure (a central core with functions outsourced to specialist partners). Each type has specific advantages and disadvantages: the choice depends on the organisation’s size, strategy and culture.

How do you create a company organisational chart?

Creating an effective organisational chart involves six stages: define the purpose of the chart (whom it serves and what for); gather the actual structural information (not the ideal one); choose the type of structure best suited to the company’s stage; build the hierarchy from the top down (from senior management to operational teams); check consistency with the actual decision-making processes; and plan regular maintenance. For the graphic design, the most widely used tools in 2026 are Lucidchart, Microsoft Visio, Miro and Canva.

Is an organisational chart required by law?

In Italy, the organisational chart is mandatory within the limits set by specific legislation. Legislative Decree 81/2008 (Consolidated Act on Health and Safety at Work) requires the formal designation of roles with safety responsibilities, which typically implies an organisational chart documenting those responsibilities. The GDPR (EU Regulation 2016/679) requires the designation of a Data Protection Officer and the documentation of data protection responsibilities. The AI Act (2024/1689) requires the designation of those responsible for high-risk AI systems. Outside these specific obligations, the organisational chart is not formally mandatory for all companies, but it is a governance tool strongly recommended for any organisation of significant size.

What is the difference between a functional and a divisional organisational chart?

The functional organisational chart groups people by specialism: all the marketing professionals together, all the finance professionals, all the operations professionals. Each function has a head who reports to general management. It is the most widespread model in SMEs and in organisations with a single product or market. The divisional organisational chart groups people by product line, geographical market or customer segment: each division has its own management and its own functions (including its own marketing, finance and operations). Each division reports to general management or the holding company, but operates with relative autonomy. It is the typical model of large diversified companies and multinationals.

Sources

- iSpring, “Organigramma aziendale: tutti i tipi e come crearli (2026)” (April 2026): types of organisational chart, history of the evolution from the matrix structures of the 1970s to horizontal structures; tools for workforce management. Verified source: https://www.ispring.it/blog/organigramma-aziendale

- STRTGY, “Organigramma Aziendale: cos’è, tipi, come crearlo e utilità strategica [2026]” (January 2026): the strategic importance of the organisational chart, advantages and disadvantages of each structure, organisational problems linked to a lack of structural clarity. Verified source: https://strtgy.design/glossario-strategia/organigramma-aziendale-cose-tipi-come-crearlo-e-utilita-strategica-2026/

- Randstad, “Organigramma aziendale: come progettare la struttura giusta” (2026): five main types of organisational structure and their operational characteristics; the organisational chart as a tool for improving internal communication and human resources management. Verified source: https://www.randstad.it/gestione-risorse-umane/gestione-del-personale/organigramma-aziendale-come-progettarlo/

- Geoclever, “Organigramma aziendale: cos’è, tipologie, modelli e come crearlo”: the benefits of a well-structured organisational chart (clarity of roles, fewer conflicts, more effective communication); symbols and graphic conventions. Verified source: https://www.geoclever.it/articoli-blog/organigramma-aziendale/

- Accademia del Valore, “Organigramma aziendale: definire la struttura organizzativa dell’azienda” (April 2026): the organisational chart as an organisational map and a tool of corporate culture; criteria for an effective chart (concise, comprehensive, easy to consult); organisational transparency and career paths. Verified source: https://www.accademiadelvalore.it/2026/04/02/organigramma-aziendale-definire-la-struttura-organizzativa-dellazienda/

- Bsness.com, “Esempi di Organigramma Aziendale: Modelli e Guida Pratica” (July 2025): practical examples of organisational charts for different types of company; downloadable templates; definition of the organisational chart as a graphic representation of roles and reporting relationships. Verified source: https://www.bsness.com/bp-blog/esempi-organigramma-aziendale/

- Societaria, “Organigramma aziendale: definizione, tipologie e come crearlo” (November 2025): classification of structures by function, product, process and territory; levels of authority, command and control in the organisational chart. Verified source: https://www.societaria.it/finanza/controllo-di-gestione/organigramma-aziendale-definizione-ed-esempio-funzionale-335820/

Scritto il 3 October 2026 · Aggiornato il 5 October 2026