Types Of Project Organisational Structure For The Workplace

Indeed Editorial Team

Updated 27 December 2022

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When fulfilling a goal or project for a company, it is important to properly design the project's layout. A proper layout can help to complete a project more efficiently and clearly define a hierarchy for the project's employees. An excellent way to design a project layout is through the use of organisational structures for it. In this article, we discuss what project organisational structure is, why they are important and list several types of structures along with how you can use them for your own projects.

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What Is A Project Organisational Structure?

A project organisational structure involves using different ways to divide and coordinate groups of employees and individuals. It is often a hierarchy that defines various positions and lists the tasks that you can accomplish to achieve a professional goal or complete a project. These structures help run projects smoothly and in an orderly manner.

Types Of Project Organisational Structures

Here are eight types of organisational structures for projects and how companies use them:

Line structure

Smaller companies that have fewer employees to delegate tasks might use a line organisational structure. This structure simplifies and clearly defines the hierarchical structure of a company, so there is no confusion as to who is in charge. This can help employees and managers communicate more quickly with one another and complete their work faster with more efficiency. For example, the leader of the structure is the company manager who oversees the sales, marketing and development managers. The sales and marketing managers work alone in their department, while the development manager oversees the research manager.

There are several managing employees of the company, because the company is so small, the line organisational structure is a simple way to define the hierarchy of the company and define each role.

Functional structure

The functional organisational structure can be fairly common among corporations and businesses. The leader of the structure is the company manager and the employees working for the company are grouped based on their specialisation. For example, the company manager may sort the groups into:

  • Human resources

  • Customer service

  • Research and development

  • Quality assurance

  • Sales

These specialised groups formed through a functional structure make up different departments and sections of a company, allowing it to operate more efficiently. Each department produces its own work and reports to its own manager. That manager then delivers their completed tasks to the company manager.

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Matrix structure

The matrix structure uses two types of managers that can delegate tasks to employees across departments: the project manager and the functional manager. The functional manager focuses on operational and technical management within their own department. They work hard to ensure their employees are working as efficiently as they can so the project managers can do their job more effectively. The project managers focus their abilities on project planning, execution and completion. They often work with several employees from different departments.

There can be many functional and project managers throughout a company, each with their own assigned task or department. These managers then work together, combining and sharing their resources to fulfil the company's goals. For example, a company might have a research, sales and marketing department, each with its own functional managers. The company then starts three different projects, each with its own project manager. Those project managers work with the functional managers and use resources and employees from each department to complete their respective tasks.

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Line and staff structure

The line and staff structure is a combination of both the line structure and the functional structure. It is another example of a system that you might see being used by many companies and organisations. The structure has a hierarchy of managers that work with several specialised groups. These groups report to their respective managers and those managers then report to their own supervisors.

For example, the production manager who oversees the specialised production teams, such as the research and development staff and the technical experts, has the duty to report to the company manager who oversees the specialised financial and technical advisor groups. Each manager has their own groups to oversee, like in the functional structure. In the line and staff structure, each manager gets a rank slightly higher or lower than the other, so they are not equal.

Organic structure

An organic structure is a fairly undefined and decentralised organisational system. It allows the employees to work together towards a common goal with no authority from a major leader. If this type of system involves a project manager, they generally work to provide some form of structure, but may not have any power over the project's staff. This structure is beneficial to a company that works in a quickly changing market, allowing it to be more adaptable.

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Divisional structure

The divisional structure uses techniques from the functional structure and applies them to multiple divisions within a company. For example, if a company has multiple locations around the world, they might use a divisional structure to create a functional hierarchy at each separate location. Each location works as its own division and has specialised groups that help that division function.

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Project structure

An organisational structure for a project is a temporary structure that is used when a company needs to start and complete a specific project or goal. This structure works with a project manager as the leader who then oversees distinct groups and departments that each have a specific task or duty.

For example, if a company needs to create a piece of technology to do their work more efficiently, they might create a project with a research team, a hardware development team and a software development team. They then hire a project manager to oversee and manage each team and execute a plan to complete the goal.

Virtual structure

A virtual organisational structure uses a clearly defined structure system but implements it remotely. This allows the company to work more easily from multiple locations and hire employees with strong knowledge and expertise from all over the world. Companies that deliver a virtual product often benefit the most from virtual teams. It allows each of their employees to use any resources they require without needing them to move to a new physical location.

For example, a social media marketing company might use a virtual structure to complete a majority of their work because their company's product does not require all of their employees to be physically present.

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Why Are Project Organisational Structures Important?

Organisational structures can be an important part of your project management for several reasons, including:

Grouping by ability

Organisational structures can also be helpful in grouping individuals and employees to help the project run more efficiently. Grouping allows the project to:

  • Sort individuals into specialised groups

  • Create smaller groups for quicker work

  • Delegate tasks more easily

By sorting employees into specialised groups, the project can create smaller units that all share expertise or specialisation. This can help the project with certain tasks that are better suited for the specialised groups. For example, if a group of employees specialise in 3D printing and design, they might create a prototype product. They can then pass on the prototype to another group of employees who specialise in finding product faults and testing them.

By creating smaller groups of individuals, the project managers can delegate more tasks to more groups with the hope of a quicker completion time. For example, if a project manager wants to complete the research of a product's benefit to customers, they might delegate specific research topics to different groups in the organisational structure. The individual groups then have less work to complete and once each group is done, the project manager can compile all the research into one cohesive document.

Related: A Guide To What A Business Hierarchy Is And How It Works

Defining who is in charge

When working on a project in a company, organisational structures help determine who employees report to in the workplace. Determining who employees report to is important because it can create a clear ranking system that employees can reference in case they have a concern or question and they are not sure who to ask. It also can help managers determine to who they can delegate tasks.

Determining how a structure works is also important because it can show who has the power to make important decisions. In a centralised structure, the power to make plans and decisions remains with the head of the project. This means no other managers or supervisors can make decisions or choices without the project manager's approval. In a decentralised structure, the project manager gives some of their powers to lower-level managers and supervisors, allowing them to make important decisions quickly and equally without approval.

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Defining responsibilities

Another important reason to use organisational structures is their ability to communicate rules, responsibilities and procedures. By generating a clearly defined structure and grouping for a company project, the project managers can better inform those groups of their tasks and plan out how to complete the project efficiently.

Related: 19 Essential Project Management Skills To Master

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