What Are Structure Charts?

Structure charts demonstrate the hierarchy between units.
Structure charts demonstrate the hierarchy between units. (Image: Ryan McVay/Photodisc/Getty Images)

Structure charts are frequently used in the business world as a way of organizing information into easily digestible concepts and information. Structure charts can be simple or complex and can be hand-drafted or created by time-saving software. Regardless of the end-result, structure charts enable businesses to see the big picture and aid in management decision making.

A structure chart is a way of organizing units within a hierarchy in a top down manner. Each unit is connected to the unit(s) above, below or adjacent to it by the use of a line to indicate a relationship between the units. In some instances, the unit is related to all of the surrounding units with each unit serving a separate and distinct function. It is common for companies to develop and maintain organization charts that show how the company is structured (i.e., who reports to who, how information flows, department responsibilities) and what divisions exist within the overall company.


Structure charts can be created according to the drafter's preferences, but some types are commonly used. Functional organization charts are structure charts that have each unit linked to a specific function within the company such as public relations, sales and research and development. Product organization structure charts are structure charts that have each unit representing a product made by the company; underneath that product, subsequent units represent the various divisions that support the product. Matrix organization charts are structure charts demonstrate the relationship between company employees and superiors. Finally, geographic organization charts can be used to show how each region fits into a company's overall operation.


Structure charts can are beneficial to visual-spatial learners and to those working outside of the structure. Visual-spatial learns grasp depicted concepts faster than by words. A structure chart allows them to instantly see the big picture and to see the interplay of relationships in the whole. Structure charts also help outsiders to easily ascertain how the company is arranged. For example, corporate attorneys frequently rely on structure charts to gain a basic understanding of how a company is organized. Inside a company, structure charts allow managers to make budgeting and resource allocation decisions as well as acquaint them to the company's employees and their responsibilities.


Many software companies offer organization structure chart software. The software allows the user to input basic information, such as the name of a department or employee title, and then creates the chart. The user is able to choose the chart's colors, design and can even opt to include pictures in the chart.

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