How to solve the dilemma of balancing between efficiency and flexibility in project-oriented organizations

Purpose: This paper aims to explore the ways to solve the dilemma of balancing between efficiency and flexibility in project-oriented organizations (POOs). It investigates the characteristic of the relationship between efficiency and flexibility in the context of POOs. Based on the framework of organizational design, this study tries to open the “black box” of how POOs make a balance between efficiency and flexibility, and examines the influence of organizational design in this process. Design/methodology/approach: This study is a comparative multiple case study based on four project-oriented enterprises, whose relationships between efficiency and flexibility are diverse from one another. It follows the process of building theory from case study, applying within-case and cross-case analysis and replication logic in shaping hypotheses. Findings: The results show that the relationship between efficiency and flexibility in POOs can be divided into four different situations. The contradictory factors are identified as functional structure and project structure, standardized process and temporary plan, as well as strategic-level centralization and project-level decentralization. It is found that the key to achieve a balance between efficiency and flexibility is to coordinate the relationship of contradictory factors through the effective integration of organizational level and project level. Originality/value: This study introduces the framework of organizational design in solving the dilemma of balancing between efficiency and flexibility, responding to the call for developing the project management theory from a strategic perspective. It provides theoretical support for POOs to achieve balancing between efficiency and flexibility, and suggests an effective synergy of organizational design in both organizational and project level.