03/17/2025 - Articles
Project Organization Forms
The project organization form is one of the keys to a project's success. Structuring workflows, effective collaboration between team members, and a clear distribution of tasks – all of this depends to a large extent on choosing the right project organization form. The three main forms of project organization are the staff project organization, the matrix organization, and the projectized organization. However, the possibilities are endless. Here you will learn about the advantages and disadvantages of the project organization forms and when which form is suitable for your company and your project landscape!
Contents:
- What is a project organization?
- Why do you need a project organization?
- What project organization forms are there?
- Why is the project organization form important?
- Spoiled for choice: Which project organization form is right for what?
- Project organization for international projects: Be sure to note
- Project management software for every type of organization
- Conclusion: The importance of the right project organization
What is a project organization?
A project organization is understood to mean the entirety of the organizational units, the structure and the organizational regulations for the execution of a specific project. The following definition can be found in DIN 69901-5:2009-1:
DIN definition of project organization
3.75 Project organization (en: project organization) structural and procedural organization for the execution of a specific project. Note: The project organization can consist of components of the existing company organization and is then only supplemented by project-specific regulations.
A project organization can be graphically represented as an organigram in a tree structure that is embedded in the entire company structure. However, the project organization not only regulates the structure and processes of the project, but also defines the rules and tools. The project organization officially exists only for the duration of the project and is then usually dissolved. In practice, however, specific project organization forms that have proven themselves for handling different project types are established in companies or other organizations.
Why is a project organization needed?
Clear team structures, especially in the form of project organizations, are crucial for successful project management. An effective project organization consists of:
Project management (responsible for managing the project)
Project team (responsible for operational project work)
Steering committee (superordinate decision-making body)
A transparent organizational structure is essential for a project to run successfully and integrates seamlessly into project management.
The project organization forms the hierarchical framework of a project, defines the vertical flow of information and the authority of the people involved. It determines who makes which decisions, from whom approval is obtained and to whom the decisions are forwarded. Thus, it describes the structure of formal power relations.
A project manager therefore devotes himself to the aspects of the organizational structure and works to establish and implement the most suitable organization for his project right from the start.
What project organization forms are there?
A project organization form refers to the structural arrangement of people,resources andresponsibilities required to carry out a project. The selection of the appropriate organizational form depends largely on the project size, available resources and the willingness of management to delegate decision-making authority.
There are five basic forms of project organization, although usually only the middle three are referred to as typical project organizations:
Line project organizationThe project is carried out within the existing line organization, with employees being assigned to the project tasks in addition to their regular tasks. | |
Staff organizationA project staff supports the project management, while the line organization remains largely unchanged. | |
Projectized organizationIn this case, a separate team is formed for the project, which has all the necessary resources and decision-making powers. | |
Matrix organization / task forceEmployees report to both functional superiors and the project manager, which breaks up a clear line structure. | |
Project companyAn independent company or subsidiary is established for the project implementation, which acts independently of the parent company and independently takes over resource management and decision-making processes. |
Practice shows often mixed forms, in particular the staff and line project organization are combined to the staff line organization to ensure a coordinated project implementation. But let's take a closer look at the basic forms to get to know their specific advantages and disadvantages.
1. Line project organization: the integrated one
The line project organization is a specific form of project organization in which a project is incorporated into the structure of a line organization. In this form of organization, the project manager is directly under the head of the department from which the project arises.
The line organization is characterized by a clear hierarchy and a close link to the primary structures of the company. The project manager takes over the coordination of project goals, deadlines and costs, and is usually responsible to a superior. The spatial and temporal concentration of the project team, as well as the extensive authority of the project manager, characterize this form of organization.
Advantages of line project organization | Disadvantages of line project organization |
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Areas of application of the line project organization
| Line project organization is often used in plant engineering, especially for large-scale construction projects. The project team's concentration in terms of space and time enables efficient coordination of construction processes, while the clear link to the specialist department ensures smooth integration of expertise. | |
| In building construction and civil engineering, the line project organization offers advantages for large construction projects such as bridge construction, road construction or building complexes. The direct integration of the project into the corresponding specialist departments facilitates collaboration and promotes targeted implementation. | |
| In research and development projects, the line project organization enables targeted collaboration between interdisciplinary teams. The proximity to specialist departments promotes the exchange of expertise, which is particularly advantageous for innovative projects. |
2. Staff project organization: the minimally invasive
The staff organization is a specific form of project organization that is often confused with the weak matrix, the influence organization. In the staff organization, the project manager has neither technical nor disciplinary authority over the project staff. The project manager is not responsible for the course of the project, its costs and its outcome, but takes on the role of gathering and distributing information. Essentially, the project manager has a coordinating role and serves as an advisor within the project.
The project manager often does not have a permanent project team, but has to access resources from existing departments. The resource autonomy and independence from the basic organization are therefore weakly developed. He consults with the various heads of the specialist departments in order to procure the required resources. He reports data on project costs, deadlines and progress to a higher-level management office, usually the management.
Advantages of staff organization | Disadvantages of a staff organization |
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Areas of application for the staff organization
| Small and non-critical projects: The staff organization is well suited for projects that do not require extensive organizational changes. | |
| Strategic and cross-departmental projects: The staff organization can be effective for projects that are supported by management or a high-level department. |
The staff organization is particularly suitable if the project manager can exert influence and the project is directly supported by management or a high-level department. However, if the project manager does not receive sufficient support or if the project is not given a high enough priority, the failure of the project is a real possibility.
The staff project organization requires only minor organizational changes to the core organization and is often chosen when a project has far-reaching effects on the entire company, e.g. in organizational projects such as the introduction of company-wide software or the development of a quality management system.
Example of a project in a staff organization
A company plans to introduce a new project management software across departments and company-wide. In this case, the project manager of the software implementation project has no direct authority over the project staff, but acts as a coordinator who advises the various departments and ensures that the employees are trained. He forms the interface between the project team, the heads of department and the management. The company management itself has a great interest in the success of the project and therefore supports the project manager to the best of its ability.
More about the staff organization
The staff organization offers an interesting opportunity to implement projects efficiently and in a resource-saving manner without making far-reaching changes to the existing company structure. In our article, we explain the special characteristics and functioning of the staff organization and show when this project organization form can be meaningfully used. Find out what advantages and disadvantages arise from the project manager's lack of authority to issue instructions and how successful project results can still be achieved through professional expertise, negotiating skills and clever coordination. Is the staff organization also suitable for your company and your projects?
3. Projectized Organization: the focused
The autonomous or pure project organization is a form of organization in which a separate, independent team is created for a specific project. The team members are taken out of the other departments and assigned to their own project area for the duration of the project. This team is completely self-sufficient, works autonomously from the primary organization and has its own resources that it needs to carry out the project.
In this project organization form, the project manager bears the full responsibility: He has both technical and disciplinary authority over the team members and is responsible for achieving the objectives. He is the highest instance and is responsible for all decisions in the project. The project manager thus decides not only on the distribution of project tasks, but also on hiring needs, vacations and layoffs. From a legal point of view, the projectized organization is not organized independently.
Advantages of a pure project organization/h4> | Disadvantages of a pure project organization |
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Fields of application for the projectized organization
| Large and complex projects: The Projectized Organization is particularly suitable for projects that require extensive resources and expertise. | |
| Research and development projects: In areas where innovation and creativity are required, the Projectized Organization can be effective. |
The Projectized Organization is particularly useful when clear responsibilities and quick decisions are necessary and when the project is highly significant for the company. Therefore, this model is mainly used for large, long-running R&D or investment projects.
Beispiel für ein Projekt in Autonomer Projektorganisation
A technology company wants to launch an innovative smartphone. In this organizational form, a dedicated team of experts from various departments, including research and development, marketing, production, and quality control, is set up with clear powers and responsibilities. The team manages the project independently from conception to market launch. The advantages lie in the ability to react quickly and flexibly to market changes without having to wait for approval from various department heads. The clear focus on the common goal promotes efficiency and innovative strength. However, challenges such as a lack of coordination and limited resource allocation can arise, which must be overcome through transparent project communication, coordination and effective resource planning.
More about the projectized organization
In a projectized organization, all team members work exclusively on a project. This means clear responsibilities, short communication channels and a high degree of adaptability to new requirements. The project manager bears full responsibility and can make quick decisions without having to consult other departments. But this autonomy also has its challenges: after the project is completed, team members have to be re-integrated, and the resource requirements are high. Find out when a projectized organization is the best choice.
4. Matrix Organization: The Flexible One
The matrix organization is a form of organization that combines elements of the functional and projectized organizations. In this multi-line system, employees work both in their functional department and in project-related teams, and have two superiors, the project manager and their department head, who are in principle equal. However, there are three types of matrix organization according to the PMBOK-Guide by the PMI: the weak matrix, in which the specialist department plays the dominant role, the balanced matrix, and the strong matrix, in which the project teams have more autonomy.
In a matrix organization, the project manager has technical authority over the project. However, the disciplinary authority over the members of the project team remains with the respective department heads. In a matrix organization, project team members receive instructions from at least two levels of management, which is known as the “multiple command system.” Conflicts between the technical department and project management are common in this model, but they can constructively contribute to finding solutions.
To minimize resource conflicts and employee overload when juggling line and project work, a steering committee can be set up. The project manager reports to this committee, which serves as a decision-making and escalation body and is responsible for capacity planning. Involving the department heads in this committee can ensure transparency and regular coordination, thus reducing the potential for conflict.
The division of authority between the project manager and the line departments is crucial. This organization is used when rapid adaptation to market changes is required. However, the matrix organization poses communication challenges and can lead to conflicts, especially when multiple project managers compete for scarce resources. A more precise distribution of authority can be achieved by giving the project manager more influence over the “what,” “when,” and “where,” while line management has more influence over the “how,” “with what,” “where from,” and “where to.” There are pros and cons, including low restructuring costs but also potential for conflict and uncertainty.
Advantages of matrix organization | Disadvantages of matrix organization |
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Areas of application for the matrix organization
| Complex projects with varying demands: The matrix organization is particularly suitable for projects that rely on different functional competencies. | |
| Innovation projects: When creative inputs from different subject areas are needed, the matrix organization can be effective. |
The matrix organization is a suitable choice when balanced use of expertise and resources is required. It is important to design the structure carefully to minimize conflicts and ensure clear communication.
Example of a project in the matrix organization
In a software development company, a new product is being developed that requires close collaboration between different departments: development, quality management and marketing. In the matrix organization, team members work both functionally and project-oriented. The project manager coordinates the overall vision of the product and ensures that the project goals are met. The development department contributes its technical expertise, the quality management department monitors standards, and the marketing team prepares a successful market launch. The matrix structure enables flexible response to project requirements, efficient resource utilization, and collaboration across departments to successfully launch the product.
More about the matrix organization
The matrix organization is one of the most effective organizational forms for complex, interdisciplinary projects. By combining departmental and project structures, it enables agile and efficient collaboration across departmental boundaries. The matrix organization is particularly suitable for companies that want to react flexibly to changing requirements while optimally integrating the expertise of their departments. In our article, we explain in detail how a matrix organization works, what opportunities and challenges it brings with it, and how this structure can be implemented in your company. We also present successful practical examples and specific implementation tips.
5. Project Company: the autonomous
The project company is an organization that is legally independent and is created specifically for handling time-limited and complex projects. Compared to a Projectized Organization, which only functions as an organizational unit, the project company assumes both organizational and legal independence. The establishment of a project company can offer advantages such as clear responsibilities, efficient use of personnel and the ability to cooperate. However, there are also disadvantages such as the tendency to become an end in itself and to become inflexible when faced with changes in tasks.
Advantages of a project company | Disadvantages of a project company |
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Fields of application of the project company
The project company offers clear advantages in the efficient handling of projects, especially in the case of large and complex projects. The legal independence enables a more flexible cooperation and financing.
Examples of the establishment of a project company are the Olympia Baugesellschaft mbH for the 1972 Summer Olympics in Munich and the Expo AG for the World's Fair Vienna-Budapest in 1995. For use within a company, it is not suitable.
Why is the project organization form important?
The project organizational form is important because it significantly influences the structure, the cooperation of the team members and the distribution of responsibilities in the project. Choosing the right organizational form can be crucial to the success of the project. Here are some reasons why the project organizational form is important:
- Clarity of roles and responsibilities: The organizational form determines who takes on which tasks and who has which decision-making powers. This clearly defines the distribution of roles within the project, which leads to more efficient collaboration.
- Conflict avoidance: The clear assignment of responsibilities and decision-making powers minimizes conflicts between different management levels and team members. Everyone knows what contribution they are expected to make to the project, without getting lost in overlapping areas of responsibility.
- Resource management: The project organization form influences how resources such as employees, budgets and time are allocated. An effective organization form enables optimal use of available resources.
- Flexibility and adaptability: The choice of the appropriate organization form depends on the type of project, its size, the available resources and the willingness of management. A well-adapted organization form enables better adaptation to changing requirements during the course of the project.
- Motivating team members: The way the project organization is structured can influence the motivation of team members. A clear structure and clear responsibilities can help team members identify with the project and work with dedication.
- Avoiding overwork: A well-structured project organization form makes it possible to better distribute the capacities of project staff to avoid overwork. This helps to ensure that team members can work more efficiently.
Spoilt for choice: Which project organization form is the right one for what?
The decisive factors for choosing the project organization form are
project size and scope: the larger and more complex the project, the more versatile the organizational form should be.
Innovation and strategic importance: Projectized Organization offers the necessary freedom for pioneering, innovative projects.
Number of participants: A clear structure, such as that offered by Line-Project Organization, is advantageous when there are many participants and different interests.
Flexibility and adaptability: Matrix organizations are particularly flexible and adapt well to changing requirements.
Communication and coordination: Effective communication and coordination are crucial in all forms of organization in order to minimize conflicts and ensure a smooth project flow.
Overall, choosing the appropriate project organization form is a complex decision that requires a precise analysis of the project parameters. A well-thought-out decision forms the basis for a successful project flow and ultimately the contribution to the overall strategy of the company.
Choosing the right project organization: a balancing act between two poles
When choosing the appropriate project organization form, companies are faced with the challenge of taking various organizational factors into account in order to successfully implement a project. There are two central poles between which the decision must be made:
- Resource autonomy: With a high degree of resource autonomy, the project remains closely tied to the existing organizational structure.
- Becoming independent: If a project becomes independent, it means that it is carried out independently of the regular organizational structure.
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Advantages of becoming independent | Disadvantages of becoming independent |
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Which of these poles is given more weight depends on several factors, including the type of project, corporate culture, availability of resources and strategic objectives. In many cases, a balanced solution that combines both approaches can be the key to success.
Organizing international projects: Points to consider
Organizing projects on an international level requires specific adjustments to meet the unique demands. Organizational forms that may be useful include:
- Fractal project organization: arises when an organization expands and the expanded section is similar or even identical to the original
- Network organization: consists of autonomous members linked together long-term by alignment towards a common project goal
In a global environment, new roles must be created in the project team, such as interface managers, who oversee the connection between different core and sub-teams and ensure that all parties are on the same page.
The project manager must also take into account the cultural differences between the team leaders and team members to ensure that communication and information sharing run smoothly. This also includes taking appropriate account of expectations from different cultural backgrounds. An effective project organization is therefore a crucial basis for the success of international projects.
Project management software for every type of organization
The project organizations described are characterized by different structures androle perceptions. In every organizational form, it is crucial that all participants have a clear overview, clarity and transparency. Regardless of the underlying organizational form, this is of great importance. Professional project management software is not only extremely helpful in this regard.
Projektron BCS offers a comprehensive option for mapping project organizational structures individually, starting with branches, to departments, all the way to individual employees. In addition, you can define flexible person groups independently of departments and projects.
As a project manager, you assign either individual persons or entire person groups to your project during the planning. In doing so, you use the stored data in resource management and keep an eye on the capacity utilization of the employees or groups. This enables optimal resource utilization in the company and monitoring of employees' workloads.
In Projektron BCS, you quickly and specifically assign rights to selected projects and organizational units: By assigning employees and groups of people to a task or project, Projektron BCS releases the rights appropriate to the activity. This way, your employees can access file folders, project calendars or history logs that are relevant to the project, for example.
For matrix organizations, Projektron BCS offers flexible resource provision that can be adapted to the company's processes. Line managers can determine who belongs to the project team without direct project reference and quickly make changes if necessary, e.g. in the event of capacity bottlenecks.
It is also possible to clearly separate resource management and project management. Project managers can plan projects with placeholders, while line managers can assign their employees.
Projektron BCS supports the process of day-based planning of employees over long periods, whether in internal departments, with external employees or directly in the project. The appointment planning view displays days that are already blocked for employees to make it easy to determine availability and resolve potential conflicts.
Conclusion: The Importance of the Right Form of Project Organization
Selecting the right form of project organization is a key success factor for every project. Whether a staff project organization, matrix organization or projectized organization – each form influences the structure, collaboration and distribution of tasks in a unique way. The decision should be made carefully, depending on factors such as project size, degree of innovation and number of participants.
The variety of organizational forms offers both advantages and disadvantages. While the staff project organization offers clear structures for smaller projects with many participants, the matrix organization enables flexible adaptation to changing requirements in medium to large projects. The projectized organization, on the other hand, is particularly suitable for key projects with far-reaching consequences that require innovation and strategic significance.
Overall, a careful analysis of the project parameters forms the basis for the optimal project organization. This decision not only contributes significantly to the successful completion of the project, but also makes an important contribution to the overall strategy of the company.
Über den Autor
Kai Sulkowski is an editor in the marketing department at Projektron and an expert in project management topics. With his many years of experience in analyzing and preparing complex technical content, he imparts in-depth knowledge of best practices, methods, and trends in project management. His focus is on providing practical content that helps companies manage their projects efficiently.
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