Organization Tree | Meaning and Definition

What is an Organization Tree?

Organization tree or organization structure refers to a hierarchical system within an organization where each job and its function as well as where one has to report are identified and elaborated. The structure is created to understand the functioning of an organization and facilitate it in accomplishing the goals that enable further growth and success.

An organizational tree is also used to determine the direction of information flow between different echelons within the enterprise. For instance, in a decentralized organizational structure, the power of decision-making rests at various levels of the enterprise whereas, in a centralized structure, the decision-making power is distributed in a top-down direction. An efficient organizational structure/ tree allows enterprises to stay focused, productive, and efficient.

An organizational tree defines a specific hierarchy within an enterprise. It presents clearly the role of everyone to facilitate the accomplishment of the goals of the organization. It helps in understanding how a company should advance. Organization structures are typically illustrated in pyramid-like diagrams or in the form of charts and tables. The most powerful members here sit at the helm of the company while those with the least power perch at the lower levels. 

What if an organization does not have a formal structure? This may pose several difficulties for enterprises, as no one would be certain of their responsibilities or know whom they need to report. Thus, having an organizational tree is instrumental in providing clarity for members and enhancing the efficiency of the organization. It promises more productivity and high performance at every level of the enterprise.