M/s. MTS Ltd, is one of the mobile telephone service providers in India. It has its own mobile network, towers and distribution channels. It…

The suitable organizational structure for MTS Ltd is the Network Organizational Structure . A company with such a structure is often called a Virtual Organization . Merits of the Network Structure: 1. Flexibility and Adaptability: The structure allows for rapid technological changes and shifting competition patterns. This enables the company to adapt quickly to the unstable environment and changing customer preferences. 2. Focus on Core Competencies: The company can concentrate on its distinctive competencies while outsourcing non-core functions to specialized firms, which can perform them more efficiently. 3. Cost Efficiency: Through subcontracting and outsourcing, MTS Ltd can reduce the costs associated with maintaining in-house teams. 4. Decentralized Operations: The network structure scatters business functions across various geographical locations, reducing the need for a large central headquarters and ensuring responsiveness in different regions. Demerits of the Network Structure: 1. Loss of Synergies: Contracting out functions may prevent MTS Ltd from discovering synergies that could emerge from combining internal activities. 2. Over-Specialization Risk: By focusing on only a few functions, the company may risk choosing the wrong functions, leading to a loss of competitiveness. 3. Stress and Learning Challenges: The flatter structure and increased need for personal interactions may create stress for employees, especially those who lack the confidence for active participation in organization-sponsored learning programs.