An analysis of the main project organizational structures: advantages, disadvantages, and factors affecting their selection

Abstract

Generally, we can define project organizational structures as organizational forms, based on temporary teams that are created to perform particular tasks and disappear after achieving the established goals. Whereas simple projects may require a limited number of steps and specializations, complex projects may be composed of plentiful of steps and require diverse and different specializations. As the project increases in size and design more units and specializations are added to the organizational structure contributing to both more vertical and horizontal organizational differentiation. Thus, when designing a project organizational structure the following questions must be answered: How many different specializations are included in the design of the project? How are the interrelatedness between the different elements of the project and between the different specializations? How many different activities are to be managed? In this paper, we analyse the three generic project organizational structures that are presented in the extant literature; functional, pure project, and matrix, together with their advantages and disadvantages. Furthermore, the most important factors that should be considered when designing a proper organizational structure are also analysed.