Strategic Business Unit
The idea was developed by Mckinsey & Co. (Consulting Firm) & General Electric in 1971.
Separate operating entities within an organization.
After defining mission, a company establishes SBU’s which is sel contained division, product line or product department within an organization.
To be identified an SBU, an entity should,
Be a separate identifiable business
Have a distinct mission
Have its own competitors
Have its own executive group with profit responsibility In 1990 AT&T had 19 business units
General Electric & SBU’s are electrical motors, Major appliances, Je Engines Lighting Equipments Commercial Credit and Broadcasting.