Single SBU Organization:
Definition:
A Single Strategic Business Unit (SBU) organization is a structure where the entire business operates as a single unit, focusing on a specific product, service, or market segment.
Characteristics:
a. The organization’s activities are centered around a single core business.
b. Decision-making is centralized and focused on the overall objectives of the organization.
c. Resources are shared and allocated based on the needs of the single business unit.
d. There is a unified strategic direction and a common set of goals for the entire organization.
Example:
A single SBU organization in the Indian business context is Titan Company Limited. Titan primarily operates in the watch and jewelry industry and is a leading player in India. The entire organization’s resources and efforts are dedicated to the development, production, and marketing of watches and jewelry, making it a single SBU organization.
Multiple SBU Organization:
Definition:
A Multiple Strategic Business Unit (SBU) organization is a structure where the business is divided into separate units, each with its own specific product, service, or market segment.
Characteristics:
a. The organization is composed of multiple independent business units, each operating as a separate entity.
b. Each SBU has its own goals, strategies, and resources.
c. Decision-making is decentralized, with each SBU having the authority to make decisions related to its specific unit.
d. SBUs may have different target markets, products, or services.
Example:
Reliance Industries Limited (RIL) is an example of a multiple SBU organization in India. RIL operates in various sectors such as petrochemicals, refining, retail, telecommunications, and energy. Each sector operates as a separate SBU within the overall organization, with its own distinct goals, strategies, and operational autonomy.