Advantage and Limitation of Organizational Chart

Principle & Practice of Management

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Advantage and Limitation of Organizational Chart

The following are the important organizational chart advantage and disadvantages :

Organizational Chart Advantage

1. Clear organisational relationships: Charts define organisational relationships clearly. They instruct employees regarding jobs assigned and show how the jobs are related to others in the organisation. [ Organizational Chart Advantage ]
2. Better understanding of objectives: Formal charting helps executives think about organisational arrangements in an objective way. Structural deficiencies, communication gaps, fuzzy authority lines, inappropriate spans of control, overlapping positions, etc. are all brought into the limelight. If charts are not available, many of these structural defects defy identification and may prove to be costly at a later stage.[ Organizational Chart Advantage ]
3. Helpful in training: Charts are useful training devices. The specific requirements of each position in the organisation are spelt out in detail and the incumbents know in advance as to what is expected of them and prepare themselves accordingly. [ Organizational Chart Advantage ]
4. Helps in providing useful information: Charts provide useful information to outsiders interested in contacting the ‘right person’ in the organisation. [ Organizational Chart Advantage ]


1. Updating is difficult: Charts show organisational relationships at a point of time and quickly become obsolete and outdated unless revised frequently.
2. Fails to depict inner working: Charts fail to show human relationships in the organisation. They only show the surface of the structure, not the inner workings.
3. A hindrance in team building:
Charts make people overly conscious of being superiors or inferiors, tend to destroy team feeling and give persons occupying a box on the chart too great a feeling of ownership.
4. Rigidity in relationships: Formal charting introduces rigidity in relationships. Moreover, by laying the boundaries for each position, charts promote empire building tendencies. Each position holder would be interested in guarding his territories carefully and if possible, enhance by overstepping his authority. Formal charting promotes inflexible attitudes leading to conflicts between position holders.
5. Prohibitive preparation costs: The costs of preparing, disseminating, storing, updating and studying charts are prohibitive.

Organizational Chart Advantage