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CMA Intermediate · Operations Management and Strategic Management · Introduction to Strategic Management

In a diversified Indian group, Tata-style management treats the packaged foods division as a separate unit with its own mission, competitors, and a manager accountable for its profit. In strategic management terms, this division is best described as a:

The division is a Strategic Business Unit. An SBU is a distinct business within a group that has its own mission, identifiable competitors and a manager accountable for its results, so it can be planned separately from the rest of the organisation.

  1. AStrategic Business UnitCorrect
  2. BCost centre
  3. CFunctional department
  4. DJoint venture

Explanation

A Strategic Business Unit is a distinct business with its own mission, competitors, and a responsible manager, and it can be planned independently. A cost centre only collects costs and has no strategic autonomy. A functional department serves a single function such as finance or HR. A joint venture is a shared-ownership arrangement, which is not described here.

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