The project organisational structure facilitates coordination and implementation of project activities. It should be designed to include the essential disciplines to implement the project. It should include well defined functions, clear reporting lines, inter-relationships and interfaces. The purpose of a project organisation structure is to create an environment that facilitates interaction between team members with a minimum amount of disruptions, overlaps and conflict. It is the duty of the project management to decide the form of organisational structure that will be used for the project.
Every project has unique characteristics; hence the design of an organisational structure should consider the environment, the characteristics of project in which it will operate, and the level of authority of the project manager. A project structure can take various forms, every form has its own advantages and disadvantages.
An orderly structure reduces uncertainty and confusions that occur at the project initiation phase. The structure gives the relationship between the project members and the external environment. The authority is defined by the structure using a graphical illustration called the organisation chart.
Figure: The Organisation Chart