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An organizational chart shows how a company’s roles and reporting relationships interconnect. It’s a visual answer to the question: “Who does what, and who do they answer to?”
Clearly defined roles and a clear organizational structure can help businesses work efficiently while minimizing founder burnout.
Dallas-based shirt brand Mizzen+Main experienced this firsthand. The company’s first hires started out juggling many responsibilities, Founder Kevin Lavelle says on the Shopify Masters podcast. As the company grew, they hired for specialized roles and built a company structure that better divided responsibilities.
This article breaks down what a business organizational chart actually is, key elements your organizational chart should include, the five most common types of organizational charts (and when each one makes sense), and a step-by-step process for building one yourself.
What is an organizational chart?
An organizational chart is a diagram that outlines your company’s internal structure. It identifies each role and department, and uses boxes and connecting lines to show how those roles report to one another. Leadership roles appear at the top, and more specialized or lower-level roles appear beneath them.
At minimum, every box on an organizational chart should include a person’s:
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Full name
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Job title
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Department or team, e.g., marketing, fulfillment, customer support
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Reporting line—who this person reports to, and who (if anyone) reports to them
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Contact information, e.g., email, phone number, instant messaging handle
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Employment type, e.g, full-time employee, part-time, or contractor
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Location, if your team is remote or split across multiple sites
For new businesses, an org chart becomes useful the moment a founder stops being the only person who touches every order, customer message, and marketing campaign and starts hiring.
In a June 2025 Shopify-commissioned survey* conducted by The Harris Poll, small business owners pointed to specific signals that it’s time to hire:
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39% said it’s when they set growth goals that stretch beyond what they can personally handle
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38% each cited consistently hitting revenue targets and having enough cash flow to cover payroll
Once you begin hiring, it’s time to make an org chart.
Mizzen+Main’s first hire handled customer service, trips to meet with wholesalers, and general operations all at once. As Kevin says, this wasn’t because the roles were poorly defined. It was because there weren’t enough people yet to handle them separately.
Finally, around the company’s sixth or seventh hire, a single employee took over picking, packing, returns, and exchanges full time; work previously spread across the whole team.
An org chart is what makes that kind of transition intentional instead of accidental. It forces you to decide who owns what duties, rather than letting responsibilities drift based on who happens to be free.
Types of organizational charts
There are three main types of organizational charts—hierarchical, flat, and matrix—and two subtypes—divisional and functional—under the hierarchical structure. Here’s a look at each:
Hierarchical organizational chart
A hierarchical chart is a traditional org chart that resembles a family tree, with the highest authority (e.g., a CEO or company president) at the top, branching down into successive levels of management and employees.
This top-down structure is common in large corporations and provides a clear chain of command (because each employee knows exactly who they report to), a defined structure, and scalability, but decision-making can be slow if requests require multiple levels of revisions and/or approvals.
Departments risk becoming siloed and insulated from one another, and employees may have less autonomy, because new ideas can take longer to reach decision-makers or for multiple stakeholders to reach a consensus.
SolgaardFounder Adrian Solgaard says on Shopify Masters that teams of more than 10 people need a clear chain of command and formal communication channels.
“You need stability in order for things to work correctly,” Adrian says.
Functional organizational chart
A functional chart shows a hierarchical structure where employees are grouped by function or specialty, like marketing, sales, fulfillment, and customer support, with each department led by its own manager, who reports up to a single top executive.
Grouping people by specialty lets them go deeper in their domain and makes it easier for managers to mentor within a shared discipline. Reporting lines within each department tend to be clear, and centralizing similar work can reduce duplicated effort.
Cookware brand Our Place is a good example. As Danielle Hoo, director of digital product explains, the company started as a team of one handling digital product work with an outside engineering agency. Since then, they’ve built out in-house functional teams for engineering, design, digital product, and data, with cross-functional work spanning customer experience, operations, and wholesale.
Because its primary role is to show how roles are divided, a functional org chart shows all current positions in a company, even those that are currently vacant or in the hiring process.
Divisional organizational chart
A company using a divisional org chart is structured around separate divisions or units that operate semi-autonomously. Divisions may be based on product lines, geographic markets, or other specialized sectors of the business.
The divisional structure lets each division focus on its specific market or product, making it more agile and responsive to change. That said, each division may need to duplicate support functions (like marketing or finance), and it may require more effort to keep every division aligned with the company’s overall strategy.
Flat organizational chart
A flat or horizontal org chart depicts an organization with few levels of middle management between staff and executives. In this model, employees often take on more responsibility and get more involved in decision-making. With fewer approval layers, decisions can move faster, and the lack of hierarchy can encourage a more collaborative environment.
For example, a small team or an early-stage startup might use a flat org chart to keep decisions and communication moving quickly before departmental layers become necessary.
The flat organization chart does bring challenges:
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Managers can end up with a broader span of control than they can effectively handle
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Without a clear hierarchy, employees may be unclear about their roles and who gives final approvals
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There may be fewer obvious opportunities for upward career progression
Bluboho’s Natalie Westlake says on Shopify Masters that her company operates with a flat structure and an open-door policy. This setup allows leadership to receive immediate feedback from store and office staff, giving employees direct input on decisions and brand strategy.
Matrix organizational chart
A matrix org chart shows an organization where individuals report to more than one manager, such as a functional manager and a project manager. A matrix organizational structure allows for more dynamic allocation of people across projects.
It suits businesses that run short-term or overlapping projects requiring specialized talent from more than one team. If mishandled, though, different projects may end up competing for the same people and resources.
How to create an organizational chart
- Define your purpose
- Gather information
- Choose the chart type that matches how you actually work
- Build your chart
- Share your chart and schedule periodic reviews
- Use your org chart to assign responsibilities
Building your first organizational chart doesn’t require special software—just a clear sense of your team’s roles. Here’s how to put one together:
1. Define your purpose
Before you draw a single box, decide why you need this chart. Are you clarifying roles as you make your first hire? Onboarding a new team member so they know who owns what? The answer matters.
Truvelle Founder Gaby Bayona started out making wedding dresses solo in her apartment. Her first hire was a seamstress she met through her mother, brought on after a wholesale order from an Ottawa retailer became more than she could handle alone.
“I realized that I had reached my peak and what I could physically do since I was the one making everything myself with my own two hands,” Gaby says on a Shopify Masters episode.
An inflection point like Gaby’s is the kind of trigger that can prompt you to define the new roles you require and start drafting your org chart.
2. Gather information
List every role in the business, even if you’re currently covering several of them yourself. Your title might be “Founder,” but that could also mean “head of marketing” and “customer support” for now. For each role, note the name, title, and reporting line, and decide upfront whether contractors or fulfillment partners belong on the chart.
3. Choose the chart type that matches how you actually work
You might start with a simple hierarchical chart, with the founder at the top. But if responsibilities are split more collaboratively, a flat chart may represent reality more accurately than a traditional pyramid. Pick the org structure that fits how work flows on your team, not just the most common template.
4. Build your chart
Build your org chart using a simple drag-and-drop tool like Google Slides, Canva, PowerPoint, or a dedicated diagramming tool like Lucidchart or Miro. Add a box for each role and connect them with solid lines to show reporting relationships, keeping the design clean and easy to scan.
5. Share your chart and schedule periodic reviews
Share your chart with your team and solicit their feedback. Then, keep revisiting the chart to make sure it remains relevant. Even a two- or three-person team’s chart can go out of date within weeks of a new hire or a shifted responsibility. Like your vision statement, you want your org chart to remain perpetually useful rather than fade away as a one-time exercise.
6. Use your org chart to assign responsibilities
Once you’ve mapped out your organizational chart, put it to work for your business.
Shopify’s roles and permissions system lets you translate your chart into admin access. From Settings > Users in your Shopify admin, you can assign each staff member a predefined role (e.g., product designer, marketing lead, customer support specialist, or online store manager). You can also combine roles to match a hybrid position, so a worker’s access lines up with the responsibilities on your chart instead of defaulting to full store access.
As you hire more employees, you can keep assigning roles to staff, controlling what each team member can see and do in your store once your structure is in place.
*Survey conducted by The Harris Poll from June 5–14, 2025, on behalf of Shopify.
Organizational chart FAQ
What is in an organizational chart?
An organizational chart is a visual diagram that displays the internal structure of a company, outlining the reporting relationships, roles, responsibilities, and relative ranks of its employees and departments. Many charts also include contact information, employment type, and location, especially for remote or multi-location teams.
What tools can I use to make an org chart?
You don’t need specialized org chart software to build a chart of your own. Simple tools like Google Slides, Canva, or PowerPoint work fine for small teams, while dedicated diagramming tools like Lucidchart or Miro have templates built specifically for organizational charts as your team grows.
What are the three types of organizational charts?
The three most commonly cited types are hierarchical chart, flat chart, and matrix chart. Hierarchical charts may be divided into two types—functional charts, where teams are divided by specialty (design, engineering, etc.), and divisional charts—where they’re organized by the project or product they’re working on.
