Impact of organizational structure on project performance
Organizational structure has been shown to affect project performance in terms of being completed within the scheduled time, within the given budget limit, meeting customer expectations, meeting client expectations, and meeting the set quality parameters.
The following are empirical studies that investigate the impact of organizational structure on the performance of projects in various organizations from different parts of the globe.
This study explored the impact of organizational structure on project performance in companies operating in Dubai’s oil and gas sector. Secondary data was used in this study. The study employed the systematic mapping approach to investigate existing research studies on this topic. The research studies were then correlated to existing case studies in the energy sector and the findings recorded appropriately. The survey engines used in the study included the British University in Dubai (BUiD) effective library database, journals, e-books, and papers relevant to the present study. The PMI database was also accessed for articles relevant to the present topic. Keywords used in the search included organizational structure, challenges, oil and gas, theory, energy, enablers, and barriers, among others, focusing on the past ten years. Consequently, 125 publications were selected to be the source of secondary literature (Basioni & Khan, 2024).
The researcher focused on a local oil company in Abu Dhabi, United Arab Emirates, and an offshore oil company. With reference to the local onshore oil production company, the findings revealed that it utilized the matrix organization structure. The advantages of this structure include effective resource distribution, better utilization of project managers in terms of project allocations, flexibility in terms of staff cross-posting, clear delegation of authority, an efficient project management process, and a smooth flow of directives and information. In this regard, the project management function is deemed a standalone entity with a vertical hierarchy to top-level management CEO (Basioni & Khan, 2024).
In this company, standardization, technical specifications, and procedures are the main deliverables produced by the engineering team to support projects. Several engineering groups are committed to supporting individual projects with the assistance of external project management consultants. Some specialists, including stress analysis experts, integrity experts, and corrosion experts, are shared across all projects. Cost reduction in the company plays a major role in optimizing technical support and promoting outsourcing in the case of high-value projects. On the other hand, organizational structures in offshore companies adopt a balanced matrix structure. This is due to the existence of a balance level of authority between the project central point and the asset owner. The project’s vice president is still held accountable for delivering assigned projects and tasks (Basioni & Khan, 2024).
The study sought to establish the impact of organizational structure on the implementation of projects at the Kenya Ports Authority (KPA). The target population included 1210 management staff employed at KPA. From this population, a sample size of 300 participants was selected using the stratified random sampling method. Secondary data for the study was collected from sources such as the KPA Strategic Plan handbook, journals, and business magazines. Primary data collection was done using questionnaires. Data analysis was done using descriptive statistics, including frequencies, percentages, mean, and standard deviation. Inferential statistics using Pearson’s product moment correlation and multiple regression analysis were done to evaluate the relationship between study variables. The findings were presented using relevant tables as deemed fit (Koech & Obuba, 2024).
The findings revealed the following as factors affecting project implementation in the target organization: team performance, efforts to outperform competitors, organizational structure that supports quick decision-making for strategic advantage, performance measurement, existing organizational structure that hampers effective strategic planning, and performance reviews that cover both in-house and remote job roles. The correlation analysis showed that organizational structure had a moderately positive and significant impact on project implementation at KPA. The regression model indicated that organizational structure predicts 32.4% variation in the project implementation process. This shows that organizational structure has a significant effect on implementation of government-funded projects at KPA (Koech & Obuba, 2024).
This study explored the usefulness of organizational structure and teamwork on project success in nonprofit organizations in Pakistan. The target population included international and national NGOs located in Peshawar and Mardan. Employees from these organizations were selected to participate in the study. Data collection was done using questionnaires. Data analysis was done using descriptive statistics (frequency, percentages, and mean). Regression analysis was done to establish the relationship between variables under study. The findings were presented using tables as required (Hayat et al., 2022).
The findings revealed that teamwork quality and project performance have a positive correlation with organizational structure. The findings also showed that organizational structure has a positive correlation with project success. The results of regression analysis showed that organizational structure determines 27.6% of variance in project success. It was also demonstrated that projects exhibiting teamwork were much more successful compared to those where teamwork was lacking. The findings also indicated that teamwork quality plays a moderating role in the relationship between organization structure and project success (Hayat et al., 2022).
The study explored the impact of organizational structure on the performance of the GNI teacher training project in Rwanda. The target population included the 129 employees working in the target organization. Out of this, a sample size of 109 respondents was selected to be the main participants in the project. Descriptive statistics were used to assess the descriptive variables of the study. Inferential statistics (correlation and regression) were used to establish the relationship between the independent and dependent variables (Innocent & Jean de Dieu, 2022).
The findings showed that various staff in the training project can multi-task. The findings also showed that job tasks were clearly defined and specified. Also, it was demonstrated that job tasks provided the staff in the project with the feeling of significance. The study also showed that employees did not enjoy autonomy during task execution. The results also showed that employees regularly receive feedback on their performance. Thus, the researchers concluded that the current GNI’s organizational structure is effective and most applicable in the prevailing organizational setup (Innocent & Jean de Dieu, 2022).
This project explored the impact of project organizational structure design on the performance of the National Identification Project in Somalia (NIPS). Specifically, the study sought to establish the effect of leadership style on the performance of the National Identification Project in Somalia (NIPS), determine the effect of organizational size on the performance of the National Identification Project in Somalia (NIPS), examine the relationship between organizational structure and project performance on NIPS, and explore the effect of organizational circle on the performance of the National Identification Project in Somalia (NIPS) (Osman & Ogbe, 2022).
The target population included all 150 staff members working at the NIPS. All of them participated in the study due to their small number. Data collection was done using questionnaires. Descriptive statistics were used to analyze the collected data. Inferential statistics was used to explore the relationship between variables being investigated. The results were presented using relevant tables as required (Osman & Ogbe, 2022).
The findings revealed that leadership style had a positive and significant impact on project performance at NIPS; the project organizational structure had a positive and significant impact on project performance at NIPS; organizational size had a positive and significant impact on project performance at NIPS; and organizational circle had a positive and significant impact on project performance at NIPS. In addition, the findings indicated that 16.1% of the variance in project performance at NIPS was caused by leadership style, 17.1% of the variance in project performance was caused by the implementation of the project organizational structure, 12.6% of the variance in project performance at NIPS was caused by organization size, and 12.3% of the variance in project performance at NIPS was caused by the circle of the organization (Osman & Ogbe, 2022).
This study explored the influence of organizational structures on successful project management in Kosovo companies. To achieve this objective, the researchers used primary data, secondary data, and literary resources (such as magazines, books, and the Internet). Primary data was collected using a questionnaire that targeted managers or owners of the said companies (Elezaj et al., 2020).
Specifically, the study sought to determine the impact of matrix organizational structure on problem-solving processes with the target firms; to establish the impact of matrix organizational structure on project management effectiveness; to find out the impact of quality of communication on successful project management; and to demonstrate the impact of collaboration on project management effectiveness (Elezaj et al., 2020).
The findings established that a well-differentiated structure has a positive and significant impact on the problem-solving process in the target companies. The results also indicated that a matrix structure had a positive and significant impact on project management effectiveness. In addition, it was revealed that a positive and significant association exists between quality of communication and successful project management. Lastly, the findings indicated that a positive and significant relationship existed between collaboration and project management effectiveness in the target companies (Elezaj et al., 2020).
This study explored the impact of matrix organizational structures on project success in South African industries. Specifically, the study sought to establish the following: the impact of positive matrix structure characteristics on the quality of communication, collaboration, and trust among project teams; the impact of negative matrix structure characteristics on the quality of communication, collaboration, and trust among project teams; and the impact of quality of communication, collaboration, and trust on perceived project success (Schnetler et al., 2015).
The target population for the study included project members from diverse industries in South Africa. A sample size of 2800 individuals was selected to participate in the study. This included individuals who had completed a certificate course at Pretoria University, present and past students enrolled in master’s programs in project management and engineering management at Pretoria University, and individuals employed at South African firms operating in the mining, engineering, services, and government sectors involved in project management. Data collection was done using questionnaires administered via email. Descriptive statistics were used to analyze descriptive variables of the study. Pearson and Spearman correlation analysis was employed to establish the associations between variables under study (Schnetler et al., 2015).
The results indicated that collaboration among team members had a positive and significant impact on the quality of communication, delayed decision-making, and the chaotic nature of matrix structures. Also, collaboration among team members showed a positive and significant impact on increased communication, job satisfaction, and delayed decision-making. Furthermore, it was established that trust between team members had a positive and significant impact on positive characteristics of increased communication, flexibility in the use of human resources, and job satisfaction (Schnetler et al., 2015).
In conclusion, the study revealed the following outcomes: a positive and significant relationship exists between increased frequency of communication and quality of communication; and also between increased frequency of communication and the trust between team members; a positive and significant relationship existed between flexibility in the use of available human resources and collaboration and also between flexibility in the use of human resources and the trust among team members; a positive and significant relationship existed between job satisfaction and collaboration between team members and also between job satisfaction and the trust among team members; and lastly, a positive and significant relationship existed between individual motivation and collaboration and also between individual motivation and the trust among team members (Schnetler et al., 2015).
This study explored the impact of organizational structure on the success of projects undertaken in the food industry in Serbia. Specifically, the study sought to determine the impact of the source of authority of project managers on project success, to establish the impact of how the project manager obtains resources on project success, and to identify individuals responsible for evaluating the performance of project teams. The target population included project managers in charge of projects in the food industry in Serbia. Data collection was done using a questionnaire. Descriptive statistics were used to analyze descriptive variables in the study. Analysis of variance was done to establish the relationship between the independent variables and the dependent variable. The findings were presented in tables as required (Milin et al., 2013).
Project success was measured using four measures: number of projects completed on time, number of projects done within budget limits, number of projects that met all specifications and requirements, and overall project success in the target companies (Milin et al., 2013).
The results showed that in most projects, the authority of the project manager comes from the immediate supervisor. This means that the functional organizational structure was the most common organizational structure in many companies operating in the food industry in Serbia. The findings also revealed that in companies with the matrix organizational structure, the rate of project success was highest. The findings also revealed that in most Serbian companies, project managers depend on senior managers to obtain project resources, including project team members. This is an indicator that these companies have a functional organizational structure where the project manager has no say when it comes to resource acquisition (Milin et al., 2013).
The results also demonstrated that with regards to the relationship between ways of constituting project teams and project success, companies with the matrix organizational structure outperformed those with functional or project-based organizational structures. The findings also revealed that when it comes to evaluating the performance of project teams, most companies made use of both the project manager and the line managers. Sometimes the task was accomplished by the cooperation between the project manager, the line manager, and the project sponsor. This is an indicator of a matrix organizational structure. Consequently, the most successful projects were those done in companies with the matrix organizational structure (Milin et al., 2013).
The study investigated the impact of organizational structures on project success in South African engineering and construction companies. In particular, the study explored the factors that influence project organizational structure. It also examined the impact of project organizational structure on effective execution of projects in target firms. The study adopted a case study design approach. The target population included 8 project managers in the target organization. Data collection was done using a questionnaire. The collected data was analyzed using descriptive statistics. The findings were presented using tables as required (Botha, 2012).
The findings revealed that all of the interviewed project managers, except one, utilized a matrix organizational structure. The findings also showed that centralization and specialization were the dominant characteristics of project structures in the target company. It was also revealed that projects utilized a functional project organizational structure in the target organization. According to the results, success factors and organizational structure principles indicated that a projectized organizational structure was prevalent in the target company (Botha, 2012).
In conclusion, the study identified the following factors as key influencers of project organizational structure in the target company: formalization, centralization, specialization, and complexity of the project organizational culture. The identified principles included division of labor, departmentation, span of control, unity of command, responsibility, and authority. According to the results, the matrix organization was the most adopted project organizational culture, but unfortunately, it did not deliver the best results. The functional organizational structure was the least used, but again, its rate of success was very minimal. The researcher thus concluded that project organizational structure by itself cannot dictate effective execution of projects in organizations (Botha, 2012).
This study explored the impact of project organizational structure and project organizational culture on the performance of projects in Slovenian enterprises. The target population included 137 Slovenian enterprises. 950 respondents were selected to participate in the study. Questionnaires were used for data collection. The questionnaires were sent via email due to the high number of participants involved in the study. The collected data was analyzed using descriptive statistics, correlation analysis, and linear regression analysis (Stare, 2011).
The findings revealed that enterprises in Slovenia have utilized all the three types of organizational structure, that is, functional, project-based, and matrix. However, the mostly used one was the matrix organizational structure. The results of the correlation analysis showed that no particular organizational structure had a prominent impact on effective execution of projects in the target enterprises. The results also showed that organizational structure was strongly correlated to the level of respect accorded a project manager’s formal authority, the following of project management regulation, and the attitude of the line manager. The findings also indicated that organization structure explained 8% of variance in project delays and 6% of variance in over-budget projects (Stare, 2011).
Citation
Basioni, A. and Khan, M.W. (2024). The impact of organizational structure on project performance in the energy sector. BUiD Doctoral Research Conference, 414-424.
Botha, C. (2012). Influence of project organizational structures on project success. A Minor Dissertation Submitted to the University of Johannesburg.
Elezaj, E., Morina, D., and Kuqi, B. (2020). How organizational matrix structure can impact project management success. 20th International Multidisciplinary Scientific GeoConference SGEM 2020.
Hayat, K., Hafeez, M., Bilal, K., and Shabbir, M.S. (2022). Interactive effects of organizational structure and teamwork quality on project success in project-based nonprofit organizations. iRASD Journal of Management, 4(1), 68-87.
Innocent, C.A. and Jean de Dieu, H.K. (2022). Influence of organizational structure on performance of teacher training project in Good Neighbors International Rwanda. Stanford Peer Reviewed Journals and Book Publishing Journal of Education, 5(4), 66-82.
Koech, E.K. and Obuba, R.O. (2024). Impact of organizational structure on the implementation of government-funded projects at Kenya Ports Authority. World Journal of Advanced Research and Reviews, 22(3).
Milin, D., Moraca, S., Simeunovic, N., and Mitrovic, S. (2013). Impact of organizational structure on success of projects in the food industry in transition countries. Journal of Food, Agriculture, and Environment, 11(3&4), 88-92.
Osman, M.A. and Ogbe, A.A. (2022). Project organizational structure design and project performance of National Identification Project, Mogadishu, Somalia. Global Scientific Journals, 10(11).
Schnetler, R., Steyn, H., and Staden, P.J. (2015). Characteristics of matrix structures and their effects on project success. South African Journal of Industrial Engineering, 26(1), 11-26.
Stare, A. (2011). The impact of the organizational structure and project organizational culture on project performance in Slovenian enterprises. Management Journal of Contemporary Management Issues, 16(2).
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