Definition of Project Organizational Structure

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An organizational structure is a framework of policies and procedures companies use to break their organization into manageable groups. This process involves setting specific job responsibilities, creating a line of authority for managers and creating a decision structure for major business issues or opportunities. A project-style organizational structure is a form companies used based on their functional operations.


According to Reference for Business, project organization falls along the lines of a functional departmentalization. Business owners and managers can create product groups according to the projects a company is working on. Starting new projects will require a new group consisting of employees from departments associated with previous groups.


Setting up an organizational structure based on projects allows companies to put like-minded individuals together in the work environment. These individuals help each other accomplish tasks and activities for the business; moreover, similar knowledge and training also allows these employees to help advance their careers.


Business owners and managers must ensure that they integrate each individual project group within the company. Allowing the organizational structure to remain rigid and not interact can create a divisive environment. Companies with multiple locations may face this issue more than a tightly grouped business.


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