CA Inter P6 · Chapter 14 · Question 2 of 10
A large diversified group organises its many divisions into a few units, each with its own distinct products, competitors and markets, and each with a manager responsible for strategy and profit. This is called a:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Strategic Business Unit (SBU) structure
Explanation
Under an SBU structure, related divisions are grouped into strategic business units, each run as a separate business with its own strategy and profit responsibility. This helps top management control a large, diverse portfolio and makes planning more focused. A functional structure groups activities by function such as production and marketing.
More Strategy Implementation and Evaluation MCQs
- Q4Lumina Apparel owns only its design team and brand. Manufacturing, logistics and online sales are carried out by independent partners…
- Q5An hourglass organisation structure is characterised by:
- Q6A strategy was built on the assumption that a key raw material's import duty would stay low. Managers set up a system to check regularly…
- Q7After a sudden fire destroys a major supplier's plant, a company immediately convenes a crisis team to rethink its sourcing strategy. This…
- Q8In the McKinsey 7S framework, which three elements are generally classed as the 'hard' S's?