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CS Professional · Strategic Management and Corporate Finance · Introduction to Strategic Management

Anand Industries has three SBUs. Its board is considering: (i) divesting the loss-making paper SBU, (ii) setting the pricing policy for the steel SBU's dealers, (iii) revising the HR recruitment plan of the cement SBU, and (iv) acquiring a company in a new industry. Which option correctly identifies the decisions taken at the corporate level?

Only divesting the paper SBU and acquiring a company in a new industry are corporate level decisions, because they change the portfolio and scope of the group. Dealer pricing for one SBU is business level, and a unit's recruitment plan is functional level.

  1. A(i) and (iv) onlyCorrect
  2. B(i), (ii) and (iv)
  3. C(ii) and (iii) only
  4. D(i), (iii) and (iv)

Explanation

Divesting an SBU and entering a new industry through acquisition alter the group's portfolio and scope, so they are corporate level. Dealer pricing for one SBU is a business level matter, and an SBU's recruitment plan is a functional matter. Options including (ii) or (iii) therefore wrongly assign decisions to the corporate level.

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