Friday, December 9, 2011

What criteria to be considered in classifying an SBU?

The criteria that are to be considered in classifying an organizational unit as a Strategic Business Unit are:-
  • An SBU would serve an external market rather than an internal market,
  • It should have a clear set of external competitors which it is trying to equal or by-pass,
  • It should have control over its own destiny,
  • Its performance must be measurable in terms of profit and loss that is it should be a true profit center.

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