History of Organizational Charts
The Egyptians are thought to be the first people to use charts to illustrate the division of labor employed for large projects like the building of the Pyramids. Daniel C. McCallum, a supervisor for the Erie Railroad in New York, is credited for introducing org charts to the American railroad industry in 1855. Faced with the railroad’s financial strain and productivity slumps due to a lack of sufficient management, McCallum split management responsibility between the superintendents by having each manage a certain number of employees within his department. These superintendents wrote weekly reports for upper management, who in turn, reviewed the reports and gave further direction to the superintendents to pass on .
McCallum's charts included lines connecting the superintendents to the subordinates, while keeping them structured within each separate division. His chart sketches, resembling family trees much like today’s org charts, were thought to be the first recorded business organizational charts in America. He created organizational charts covering over 500 miles of railroad and their corresponding employees. As the Erie Railroad Company went on to become one of the most successful railroads, others followed McCallum's ideas and copied his organizational charting technique.
Years later, another man named Alfred Chandler continued to develop and promote the concept of management hierarchy in the workplace. Born in 1918, Chandler was a Harvard graduate turned professor. In his book, The Visible Hand: The Managerial Revolution in American Business, he described how implementing a hierarchal structure in an organization would increase productivity and ultimately lower costs. The structure allowed a logical chain of command and increased power, authority and company growth under top management and their subordinates. Chandler is also acknowledged as the founder of the discipline of business history .
Since then, organizational charts have been used in the majority of work fields, including education, government, healthcare, food and beverage, communications, retail, nonprofit, technology, local, state, energy and gas, and transportation corporations. Org charts are used in companies with less than 50 employees to companies managing over 7,500 employees including international personnel. Over the years, there have been many tools for creating organizational charts, including Microsoft Visio and PowerPoint. Today, specific software is available to create organizational charts for all company sizes. What was once was considered an evolutionary tool for workplace management has now become a necessity for any organization.
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