Project Organizational Structure (POS) is a hierarchical framework that identifies and defines lines of authorities and communications between project stakeholders (people and organizations involved in the project). This framework determines the manner and extent to which stakeholder roles, duties and responsibilities are delegated, controlled and coordinated. It also establishes rules of distributing information flows between different levels of management within the same project environment.
For most projects, organizational structure serves as a great mechanism for establishing effective project management and governance. POS entirely depends on project goals and selected implementation strategy. There are two types of POS, including:
- Centralized: the top layer of the organizational hierarchy belongs to strategic decision making and tight control. Decisions are made centrally and executed over departments and divisions involved in the same project(s).
- Decentralized: this type of POS grants departments and divisions varying degrees of autonomy, so decisions are made locally. Oversight is provided by local authorities (department heads, managers, team leaders).