1: What is an organogram?
It is a structure with CEO/Promoters at the top followed by the department heads and managers. 
• The structure tells you about who is heading which department and with how many reportees.
• On the other hand, reportees also get to know about their manager.
• Due to the structure, everyone has the clarity of their role in the company.
2: Case Study
With the help of this case study, you will understand the difficulties a company faces if it does not follow an organogram in the organisation.
• For example, an entrepreneur started a company with good products and services.
• When the company started, the entrepreneur was taking all the important decisions related to the manufacturing, marketing, etc. all by himself.
• When the company started growing, new people were hired.
• These employees directly or indirectly were reporting to the business promoter.
• On the basis of skill and competency, he hired 3 to 4 good mangers but the work pressure still remained the same.
• This is happening because there is no clarity of which manager is responsible for which work and who will be reporting to them.
• Also, the biggest mistake committed here is that the CEO is directly asking for work from the reportees of the manager.
• The reportees also get confused about the fact that if they are reporting to their manager or the CEO.
• Also, reportees do not listen to their managers as they feel confused if they should listen to the order of the manager or CEO.
• The impact of this confusion is seen on the commitment of the employees as they are getting orders from 2 different places and are getting scolded too. The employees don’t feel like working in such an organisation.
• Managers are also unable to get the work done from their employees and are changing frequently.
• Employees also don’t know who their boss is as the owner or CEO is making all the decisions.
• Also, at the time of appraisal, the top management decides the appraisal on the basis of their memory.
• Therefore, if you see such practices in your organisation, you need to make a structured organogram.
3: Steps for creating an organogram
• In a flow chart, mention the name of the company’s owner and CEO at the top in a box.
• Below their name, mention different departments like purchase, operations, sales/marketing, etc. of the company in various boxes.
• Below that, classify the name of department heads. They should be an expert in handling their department and their designation and salary should be the highest in their department. Also, all these department heads should be directly reporting to the CEO of the company.
• Mention managers that are positioned under the department heads.
4: Golden rules of organogram
• Span of reportee:
• Each manager should have a minimum 1 and maximum 5 to 6 reportees under him and this is known as span of reporting.
• A manager’s work is to get the work done from others and if he has no reportee under him, he will have no managerial skills to show, and therefore, at least 1 reportee is necessary.
• Also, a maximum 5 to 6 reportees should be there otherwise it becomes difficult to manage as a manager not only allocates the work to his reportees but also checks their work, takes the follow-up, provide training and also listen to their problems.
• If the number increases from 6, the manager comes under pressure and faces problems at the time of appraisal.
• Manager should understand reportees work and guide them:
As the manager won’t have the knowledge of the work, the reportee won’t listen to him.
• Manager’s salary should be hirer that his reportee:
It is important to maintain this balance in an organisation.
• Designation of manager should be higher than his reportees:
If you are a senior manager, another senior manager cannot report to you but a manager can.
• Performance of a manager should be dependent on his reportees:
• At times, when a manager is getting an appraisal, a question arises that the numbers belong to his team and what role has the manager played in it.
• This is not right as if you are the manager of the sales department, you have your own target but you are also giving a push to your team to improve their performance.
• Avoid dual reporting:
One manager can head 2 departments but 2 managers should not head a single department as this slows down the decision making process and effects the unity of a company.
• Managers should meet all the reportees at least once in a month:
And if there is a scope of improvement, feedback should be given to them.
5: Steps for implementing an organogram
• Avoid cross-reporting:
• You are an entrepreneur and you got an idea of marketing, you called all the reportees along with the managers and told them the idea.
• Also, you told the next steps and allocated the work.
• Now, you have diluted the power of your managers as the right way was to conduct a meeting of the managers only.
• If your managers will tell the idea to reportees, they will also feel that their manager always comes up with a plan and they will follow it properly and it will also increase the respect of a manager.
• Also, the manager will also feel that the CEO respects his talent and involves him in big decisions.
• Don’t break the chain of command:
• Any information or change of policy should reach the reportees through the manager.
• This way, the reportees feel that the manager is keeping an eye on their performance and they do their work with complete dedication.
• Increments and promotions need manager involvement:
• You cannot keep the managers of your company out of this practice.
• As a manager understands his team well and knows who deserves to be promoted.
• Therefore, the final decision should be taken only after the involvement of a manager.
The chart of an organogram is not a paper that is made once and is kept in a file. It should be used again and should be changed accordingly. The right structure of your business can help in the implementation channel for any decision.
If you don’t make an organogram and follow it, 3 Cs of a company or 3 important pillars of a company, which are commitment, clarity, and community can weaken. Therefore, if your company will not go the customers and employees will not prefer to work with you.
After watching this video, make an organogram of your company and you will see that you would be able to make many decisions about your company easily.