Banking · Bank Management
A large public sector bank in India restructuring its operations decides to adopt a Strategic Business Unit (SBU) approach to improve efficiency. It plans to segregate business into distinct units like Retail Banking, Wholesale Banking, and Treasury Operations. Which of the following best describes the fundamental characteristic of the SBU approach in a modern banking context?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The SBU approach eliminates the need for a corporate headquarters because each unit operates as an entirely independent legal entity with its own board of directors.
- 2SBUs are designed to focus on functional specialization where employees are grouped solely by their technical skills like accounting or marketing rather than by product lines.
- 3An SBU is a self-contained operating unit of a large organization that has its own set of competitors and allows the bank to develop tailored strategies for different customer segments.✓
- 4The primary goal of the SBU approach is to centralize all decision-making at the top management level to ensure that there is no deviation from the bank's core mission.
Correct answer
An SBU is a self-contained operating unit of a large organization that has its own set of competitors and allows the bank to develop tailored strategies for different customer segments.
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