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Types of Organisation in Project Management

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Project Management System / Organization

Informal Organization

The system of relationships and lines of authority that develops spontaneously as employees meet and form power centers; that is, the human side of the organization that does not appear on any organization chart. It is the aggregate of personal contacts and interactions and the associated groupings of people. Informal originations have very loose structures. The best example to give is an organization's football team. One might find a managing director, a manager and a manual worker all on the same team- and we know that relationships between them will be very different than in the office place.


The advantages of informal organizations are that they create strong relationships between their members. There is no theoretical "boss" and this makes all members feel like a larger part of the organization as a whole.


The company cannot benefit from different people managing different areas easily.

The members cannot look to the future- after all, with no-one above them; they cannot look for promotion and therefore find themselves stuck with the same job

Formal organization

Formal organization is a fixed set of rules of intra-organization procedures and structures. As such, it is usually set out in writing, with a language of rules that ostensibly leave little discretion for interpretation. In some societies and in some organization, such rules may be strictly followed; in others, they may be little more than an empty formalism

Functionally Based

Functional organizational structure is best for smaller companies or those that focus on a single product or service. Not designed to change quickly, functional structure works well in a stable environment where your business strategies are less inclined to need changes or updating. Functional structures are the most common type of structural design and have evolved from the concept of high specialization, high control framework of manufacturing organization turned towards high efficiency.


* The functional organization structure clusters those with similar knowledge in the same place. Since employees grow within their field, this leads to the development of specialists, especially in technical fields

* The in-depth training and focused career path gives employees clear career goals and the direction to reach them

* The functional structure maximizes performance by facilitating sharing of valuable expertise by superiors with their subordinates


* The functional units are not accountable to each other and share decision-making power, the process is more bureaucratic and tends to take longer

* While the flow of communication within a department is expedient, communication between departments and synchronization of work and project completion is more difficult to manage

* Also too much focus leads employees to neglect the larger view of the company and its objectives

Project Based

Project organizational structure refers to the creation of an independent project team, the team's management is separated from the parent organization's other units, have their own technical staff and management, enterprise assigns certain resources to project team, and grant project manager of the largest free implementation of the project . Project organizational structure is a structure that is specifically designed for executing projects. It is specifically tailored to meet the demands of complex projects by isolating unique work and maintaining a strong focus on completing the project. Once the project is completed, this structure disbands. This structure is effective in maintaining dedicated resources throughout



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