Project organisation can be designed in two forms: 1. Pure project organisation 2. Matrix organisation.

The pure project organisation is suitable for small number of big-sized projects which have long time duration and, therefore, a separate division is created for each project for the life of the project. These divisions disappear once the project is accomplished.

In a pure project structure, the project manager has authority over group members. He ensures completion of the project in time. The project structure departments are designed the way a functional organisation is designed. Project manager is also the functional head of his department. He has command over resources for completion of the project.

He also exercises functional authority over different departments. For major projects, project organisation structure is designed but the rest of the organisation continues as functional structure. The functional departments manage their functional activities and independent units are made headed by the project manager which are assigned resources for managing the projects. The project division is thus, an independent division.


Organisation chart depicting a pure project structure appears like this:


Pure Project Organisation Structure

Project manager of project A is also the General manager of production department. So long as the project continues, the project manager discharges dual functions of project manager and functional manager. Once the project is over, he concentrates on his functional department only.


Project manager exercises two types of authority over the group members:

(a) Formal authority:

Project manager derives this authority in a project structure for large-sized undertakings.

(b) Project authority:


Project managers do not have formal, vertical authority over the group members. Their expertise, competence and experience motivate the group members to complete the work within assigned time and cost. This is true in case of small organisations.

Project authority increases as one moves from big to small project organisations and formal authority increases as one moves from small to big project organisations. Shift from project authority to formal authority with reference to size of the organisation is shown as a continuum.


Authority of Project Managers in Small/Big-Sized Undertakings



Matrix organisation is suitable for large number of small-sized projects where separate divisions are not required for each project. The project activities can be accomplished through temporary departments. This type of organisation structure is costly as there is duplication of facilities; one, in the functional organisation and other, in the project organisation. It is, therefore, particularly suitable for large-scale undertakings.