Organizational structure is a framework by which the employees of a business or organization are supervised and tasks are allocated. While such order has broad implications regarding the overall way in which an organization accomplishes its goals, it also strongly affects the management of specific projects. The role of organizational structure in project management is important, because the supervision and task allocation structures of an organization directly affect the expectations, level of autonomy and flexibility allowed to people or groups working on certain projects. Organizational structure also can impact the manner in which different groups working together on a project interact with each other and how limited project resources are allocated.

Many organizations are structured in a strictly hierarchical manner, meaning there is a rigidly defined power structure in which superiors make decisions that direct the actions of their subordinates. The role of hierarchical organizational structure in project management is generally to enforce stability and efficiency. Superiors make the major decisions about the course of a project, the timeline and the allocation of tasks and resources, and their subordinates carry out the tasks with little or no autonomy. This type of organizational structure can lead to fast project completion and efficient resource use.

Other organizational structures, while still generally hierarchical overall, do allow for a great deal of autonomy in project management. The purpose of this form of organizational structure in project management is to allow greater opportunity for creativity and innovation. Projects are often completed by small self-contained "teams" that have their own organizational structures. While teams or autonomous individuals are expected to report their progress to superiors, they often do not need to follow a strict timeline and can largely determine for themselves the best way to complete the project. This type of organizational structure in project management often results in slower project completion and less efficient use of resources, but it is conducive to innovations that can to greatly enhance the value of a given project.

Organizational structure can affect project management in a few other ways. In some cases, for instance, an organization's structure includes thorough training programs that can improve the abilities of managers and employees to complete certain types of projects. This and other roles of organizational structure in project management can have either positive or negative effects. Some structures streamline the project management project and result in efficient resource use and capable workers. Others, particularly excessively complex structures, may simply complicate project management and result in impenetrable bureaucratic barriers to project management and completion.