What is the purpose of an organizational chart?

The purpose of an organizational chart is to visually represent the structure of an organization. This tool is essential for illustrating the hierarchy within the organization, showing how different roles and departments are interconnected. By providing a clear visual layout, an organizational chart helps employees understand their own place within the organization, as well as how their roles relate to others. This promotes effective communication and collaboration across different levels and functions.

While outlining employee roles and responsibilities and listing all employees are important aspects of organization, those activities are not the primary function of an organizational chart. Similarly, analyzing company profits and losses pertains more to financial performance than to structural representation, which is why it doesn't relate to the purpose of an organizational chart. The visual aspect is what sets this tool apart as it encapsulates the entire organization’s structure in a way that is easily digestible and can be referred to in discussions about management and workflow.