This type of organization focuses all resources on projects. Many organizations today establish cross functional task force teams to handle strategic and crucial projects.
These teams are an example of a project team organization structure. Typically resources are assigned full time to a project and they form the core team. The core team is supplemented with other expertise on an as needed basis.
The role of the functional manager is eliminated or they act as internal technical consultants to the project team, and the project manager is responsible for the project budget, scope, schedule and all other resource, contractual and customer issues.
This type of organizational structure is suitable for fixed price fixed time contracts. Organizations that adopt this kind of organization structures will need to insure that their financial and other corporate systems are setup for project data collection and reporting.
Ideally project managers should have the authority to hire outside consultants or resources to keep the project on track.