Project-based organizational structure explained

Org chart

Two project teams are shown in depth, each under its own project manager with a full team. The resource manager holds the bench of people between projects, and the project office and support functions are drawn one level down.

Levels and designations

Approval chains

How the model works

The project is the unit of the whole company. When work is won, a project manager is given a team and full charge of it: the people, the plan, the budget and the result belong to that manager for the life of the project. Team members work only on that project and answer to that project manager, not to a separate functional boss. When the project closes, the team breaks up and members go to a resource pool, or bench, managed by a resource manager until the next project needs them. Take a 250-person IT services firm in Hyderabad: it staffs each client project as a dedicated team, and a project office tracks all projects and moves people between them.

Strengths and weaknesses

The strengths are focus and accountability. Each team gives its full attention to one project, the project manager has clear, single authority over the people and the outcome, and the team can be sized and skilled exactly to the job, which makes delivery fast and responsibility easy to trace when the work is genuinely project-shaped.

The weaknesses are between and after projects. People on the bench are idle and costly until the next project starts, and skills can fade without a permanent home function to keep them sharp. Knowledge can be lost when a team disbands, career growth is tied to project flow, and utilisation must be watched closely, or the model becomes expensive.

• Full focus and single clear authority per project
• Teams sized and skilled exactly to the job
• Idle, costly bench time between projects
• Skills and knowledge lost when teams disband

When it fits

The project-based structure fits firms whose work naturally arrives as distinct projects with a start and an end, such as construction, EPC, consulting, software services and event companies. It works when projects are large enough to justify dedicated teams and the company can keep people moving from one project to the next without long idle spells. It fits badly for steady, repetitive operations that never stop, where permanent functions serve better. Firms that must share scarce specialists across many small projects at once often prefer a matrix instead, so specialists are not stuck on one job.

• Work that arrives as distinct projects with a start and end
• Projects large enough for dedicated teams
• A steady pipeline that keeps the bench small
• Not for steady, repetitive operations that never stop

Set up this structure in ZeniaHR

1. Set up each project as a department or cost centre, and add a resource pool grouping for people between projects under Organization masters.
2. Add designations for project roles like Team Lead, Engineer, Coordinator and Project Manager, and use grades to hold pay bands across projects.
3. Set each person's reporting manager to their current project manager, so leave, attendance and reviews sit with the one owner for that project.
4. When a project ends, move members to the resource pool and update their reporting manager, so no one is left without a manager between projects.
5. Use the org chart to fix broken reporting lines as teams form and disband, which happens often in this model.
6. Keep leave, corrections and overtime on the reporting manager then HR route, and add the head of projects as a hiring approver above project managers.

Frequently asked questions