A Mumbai-based conglomerate, PQR Ltd., has announced a major restructuring of its business operations. The company has decided to split its business…

PQR Ltd. has planned to implement the Strategic Business Unit (SBU) structure. Very large organisations, particularly those running into several products, or operating at distant geographical locations that are extremely diverse in terms of environmental factors, can be better managed by creating strategic business units. SBU structure becomes imperative in an organisation with an increase in number, size and diversity. The attributes of an SBU and the benefits a firm may derive by using the SBU Structure are as follows: A scientific method of grouping the businesses of a multi – business corporation which helps the firm in strategic planning.An improvement over the territorial grouping of businesses and strategic planning based on territorial units.Strategic planning for SBU is distinct from rest of businesses. Products/ businesses within an SBU receive same strategic planning treatment and priorities.Each SBU will have its own distinct set of competitors and its own distinct strategy.The CEO of SBU will be responsible for strategic planning for SBU and its profit performance.Products/businesses that are related from the standpoint of function are assembled together as a distinct SBU.Unrelated products/ businesses in any group are separated into separate SBUs.Grouping the businesses on SBU lines helps in strategic planning by removing the vagueness and confusion.Each SBU is a separate business and will be distinct from one another on the basis of mission, objectives etc.