Many CIOs recognize that the organizational structure of their software development group has an impact on the success of their application development efforts. Unfortunately, there is not always the same level of consensus among CIOs on what the correct organizational structure should be. This chapter starts by defining the organizational structure and examining its importance to successful software development. Different types of organizational structures, along with their pros and cons are discussed. Sample organization charts are given for small, medium, and large software development organizations. This chapter also contains discussions on centralized versus decentralized organizations and the use of virtual project teams .