Strategic business unit

A strategic business unit (SBU ) is a part of a company that can act independently of other fields of enterprise in an enterprising external market segment. Strategic business units are closely related market - product combinations with clearly defined market task. They provide the overall business success of an independent contribution. Several of these strategic business units of different companies operate in a strategic business area (SBA ).

Criteria for the formation of strategic business units

Strategic business units are capable of quasi customers or independently to work as entrepreneurs within the enterprise product segments in all its breadth and depth. In order to be successful in the market, all SGE must have relative competitive advantages ( central criterion ). In order to show the success of an SGE within the enterprise as a whole, it is necessary to build internally a clearly defined figures ( Management Accounting ) and clearly separate the work area from the other business units. In particular, the cost of SBU - wide functions must either be distributed as services on the SGE or are recognized as the leading cost management. The establishment of SGE is usually connected with the hope of efficient internal management of the unit and a market- oriented demeanor to the outside. According to the head of a SGE must be equipped with powers that allow them to shape in its sole discretion, the actions of the SBU on the market. This is realized by the SBU are spun off as independent companies and the actual company all that remains is a leading holding in extreme cases. A well-known example is the transformation of Hoechst AG in a strategic management holding company with a spin-off of all shops and all service units into independent companies 1996/1997.

Discussion

Critics point to the concept of SGE that they would bring no added value to the company. Either they were congruent with the organizational units of a divisional organization and thus only a renaming of the divisions or they would put as a separate unit on an existing organizational structure, thus establishing a factual matrix organization in the company with all the associated problems. In the extreme case of SGE become independent of the added value of the holding is questionable and it is unclear why the SGE ever need to form a joint venture.

This criticism, however, is only justified if there are no synergies or economies of scale occur between the individual SBU, such as in joint procurement (and if it's only by borrowing ). Furthermore, supportive tasks are performed in the holding organization for the SBU ( personnel, accounting, organization, etc. )

• Management