What Is the Meaning Of Organization Tree & Its Importance

Duration: 6-7 minutes

What is an organization tree?

Basically, an organizational tree is defined as the graphical structure of an organization that delineates the working, authorities, and responsibilities of the employees of that particular organization.

We all did that family tree when we were kids, didn''t we? It was in a hierarchical manner starting from our grandparent, then our parents, their brothers and sisters beside them, then their children along with us. That was a good, fun, and not-so-confusing way of knowing the hierarchy of the family, wasn''t it?

Similarly, we have an organization tree. Organization tree refers to the diagrammatic presentation of the hierarchies in the organization starting from the topmost position to the lowest ones.

It helps us easily understand the highly complicated structure of the company. It gives a gist about the managerial levels from the highest to the lowest position.

What are the benefits of an organization tree?

Let''s take a situation: you are supposed to provide the sales report to the sales manager when you are working in the product team. Now, you can''t ask everyone around you obviously, ""Do you know who the sales manager is?""!

Now in this situation, the organization tree will help you out. You can quickly go through the managerial section under the sales department and look who is there at that position.

Sounds quite easy right?

This is how an organization tree is beneficial to employees at a workplace. Let''s see how else it is useful.

• Easy to Understand: The organization tree represents the inner structure and hierarchies of the organization visually. Visuals or graphics help an individual remember complex things easily.
• Quick Onboarding: A new employee who doesn''t know much about the company might not know who they must report to. The organization tree helps the employee clarify their immediate seniors whom they must report to and who are supposed to report to them.
• Task Clarity: Through the organizational tree, employees are able to identify the tasks clearly, which can avoid duplication or overlapping of work. This is a very important advantage of an organization tree since it helps employees in reducing extra work coming their way.
• Distributed Workload: With a decentralized organization tree structure, the manager can easily handle the workload; he knows who he can give that extra work to. It will help the team or department to complete their part for the company on time.
• Improved Performances: When an employee knows better about the work they must do and the responsibilities they are holding, they work in a better and in an easy manner. Organization tree clarifies the employees about their roles and responsibilities thus leading to better performance.

What are the Different Types of Organization Tree?

There are various organization trees, but let''s discuss a few major ones:

• Functional Structure: In this type of organization tree, the employees are organized in functional departments depending upon the similarities in their skill set, tasks, and business activities.
• Divisional Structure: It is quite like the functional structure, but it differs as with this type of structure. We divide our organization''s majors into departments like sales, product, marketing, HR and then we create a structure.
• Team-based Structure: This is the kind of organization tree where the structure is created according to the team working for a similar goal for the organization. They are a little less hierarchical and have a flexible structure.
• Matrix Structure: A combination of both functional structure and the divisional structure. In this, the employees'' reporting relationships are drawn as a matrix or grid, not following the traditional approach for the same.

You can always customize the way you want to create your organization structure as per your needs, vision, and mission.

Frequently Asked Questions (FAQs)

How to create an organization tree?

This process was earlier done manually, taking all day long, but now we have a lot of ease in doing so with the basic tools present in your laptop and phones like Excel. We can create an organization tree. For more advanced versions, we can utilize HRMS suites.

What are the primary elements customarily included in an organizational tree?

Basically, the primary elements to be included within an organizational chart are:

• Work specialization
• Departmentalization and compartments
• Reporting hierarchy
• Responsibilities and roles

How does the organizational tree aid in visualization of hierarchy and reporting structure within an organization?

The organization tree provides the hierarchy of the organization in different ways. It is a visual depiction that presents the flow of the responsibilities and roles from top to bottom positions. In this way, the complex working mechanism of the organization is understood within no time.

What are the errors that should be avoided while designing an organizational tree?

The common mistakes that one must avoid while designing the organization tree are:

• Incorrect representation of hierarchies
• Overly complicated division of departments
• Decentralization of roles and responsibilities
• Designing a complex structure
• Leaving out some people

Conclusion

In this fast-moving world, there is a need for every company to establish modern techniques that will help them make space for themselves in a competitive environment. According to Deloitte''s Report, 92% of the companies believe that redesigning is important for them.

In the final analysis, what we are looking at here is a very erudite write-up answering all our questions with regard to the organization tree, like what it means, what the benefits of making one are, how to create one, how many types of organization trees can be made, and much more.

We hope that we helped to enlighten your knowledge. Keep bringing more in for you! Till then keep reading, keep thinking, and keep HRing!