Organization is the structure of the relationship among the position and jobs which is built up for realization of common objectives. It facilitates the implementation by arranging all the activities in a suitable manner for the use of management control.
Project organization can be defined as an engine of project management because it lays down the rules and regulation for the smooth operation of activities and administration of the project, outlines the relationship between project participants, establishes authority and responsibility relationship, indicates communication lines and channel between project manager with project team and external stakeholders and provides basis for integration and coordination of human and non-human resources in the project.
Project organization is superior than traditional organization. Since traditional form of organization is characterized by superior subordinate relationship, departmentalization, formal communication, chain of command, rigid etc. It is not suitable for handling the non repetitive, unique and complex project activities in a coordinated manner according to changing environment. Therefore, project organization is established to avoid such weakness of traditional organization for proper implementation of the project. Project organization is action oriented and flexible. It is an adhoc (temporary) organization that ceases to exist once the project is terminated.