Business organisational structure

Project management organisational structure

Guide

Project management structure is becoming increasingly common. In a project organisational structure, you arrange your business around dedicated teams that work on a particular project.

What is a project based organisational structure?

The project structure involves taking a member of staff out of each functional department and placing them in a temporary project team. This team then works on one specific task.

This structure can be useful when developing a new product or entering a new market. A business that usually has a functional or customer-based structure can use project management to complete short-term objectives. In this structure, a project manager usually:

  • has the decisive authority over the task
  • leads a team of staff from different departments to complete a project

The individuals on the team work directly for the project managers.

The advantages of a project organisational structure

Some businesses may benefit from using a project management organisational structure all the time, especially if they need to be flexible and agile in their operations.

A clear benefit of a project structure is that you have more control over the team. However, there are many other advantages. For example, such a structure can:

  • facilitate a multi-disciplinary or cross-functional way of working
  • flatten a business' hierarchy
  • create a strong team culture and sense of identity
  • ensure a business is organised according to its core activities
  • make better use of employees' skills
  • make it easier to schedule work with dedicated resources

The disadvantages of a project organisational structure

While the project structure is probably the simplest structure of all, it's worth keeping in mind some possible downsides. For example, the project organisational structure can:

  • blur organisational lines, since it effectively removes staff from their functional jobs
  • suck up resources and staff to work on a single project, rather than wider objectives
  • confuse lines of accountability as employees may report to several different managers

Project organisational structure can also prove expensive, as having a dedicated project team can often lead to high costs. This is likely to work best for big and short-term projects.

Other common ways of structuring a business include hierarchical organisational structure, a matrix organisational structure or organisational structure by product.