strategic business unit


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strategic business unit (SBU)

a division of a multi-product firm which represents a discrete area of business. Each SBU is responsible for a group of interrelated products serving a core MARKET; for example, within Unilever margarines and fats re-present one SBU while soap powders and detergents represent another. SBUs generally operate autonomously within the firm with their own chief executive, production and marketing staff etc., but are usually subject to overall control by the firm's main board of directors in such matters as capital investment.

SBUs are an attempt to decentralize responsibility for profit generation. It is believed that this will increase motivation and improve individual performance, thereby improving overall organizational performance and the achievement of strategic goals. See PRODUCT-BASED STRUCTURE.

strategic business unit (SBU)

a fully or semi-autonomous division of a diversified firm (see DIVERSIFICATION) or MULTINATIONAL COMPANY that operates in a particular market or business area with its own management team.
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