What Are SBU's ???

 

Strategic Business Unit or SBU is understood as a business unit within the overall corporate identity which is distinguishable from other business because it serves a defined external market where management can conduct strategic planning in relation to products and markets.

When companies become really large, they are best thought of as being composed of a number of businesses (or SBUs).
The SBU has its own business strategy, objectives and competitors and these will often be different from those of the parent company.

An SBU is an operating unit or planning focus that groups a distinct set of products or services, which are sold to a uniform set of customers, facing a well-defined set of competitors.
The commonalities are five in number:

An SBU may be defined by its common raw materials. Such a company, Kimberly-Clark for example has a variety of paper products such as Kleenex, Kotex (sanitary napkins ), Huggies ( originally based on cellulose).

Another SBU may be defined by its common manufacturing processes: A company such as General Motors may have separate units making automobiles, trucks, diesel-electric locomotives, all based on such engineering and assembly processes.

Another SBU relies on a common distribution method; “The Sharper Image” started by utilizing advertisements only in airline magazines using direct mail . Its success eventually brought it to using regular retailing stores as well

Yet another SBU is based on common customers: Proctor & Gamble makes Pringles potato chips, Ultra-Pampers, Dawn detergent, Crest toothpaste, all based on the fact that these products are largely sold through super markets. In the past several years they also acquired Gillette Razors for much the same reason.

A last SBU may be based on its service processes, such as an accounting firm ( Deloite Touche ) or a consulting firm ( Accenture ) where its particular set of skills of its personnel have a clear competitive advantage. A shipper/ warehouse such as UPS or Federal Express similarly fits this definition.

There are three factors that determine the success of an SBU:
1. The degree of autonomy given to each SBU manager
2. The degree to which an SBU shares functional programs and facilities with other SBU's
3. The manner in which the corporation evaluates and rewards the performance of its SBU managers.

Companies today often use the word “Segment” or “Division” when referring to SBU’s, or an aggregation of SBU’s that share such commonalities. 

A Manager canNOT be a Leader...!

Leadership and management are two notions that are often used. However, these words actually describe two different concepts.

Leadership is a facet of management

Leadership is just one of the many assets a successful manager must possess. The main aim of a manager is to maximize the output of the organization through administrative implementation. To achieve this, managers must undertake the following functions:

• Organization
• Planning
• Staffing
• Directing
• Controlling

Leadership is just one important component of the directing function. A manager cannot just be a leader, he also needs formal authority to be effective. "For any quality initiative to take hold, senior management must be involved and act as a role model. This involvement cannot be delegated."

In some circumstances, leadership is not required. For example, Btl Activation agencies in delhi helps to self motivated groups may not require a single leader and may find leaders dominating. The fact that a leader is not always required proves that leadership is just an asset and is not essential.

 Differences In Perspectives

Managers think incrementally, while leaders think radically. "Managers do things right, while leaders do the right thing." . This means that managers do things by the book and follow company policy, while leaders follow their own intuition, which may in turn be of more benefit to the company. A leader is more emotional than a manager . "Men are governed by their emotions rather than their intelligence". This quotation illustrates why teams choose to follow leaders.

"Leaders stand out by being different. They question assumption and are suspicious of tradition. They seek out the truth and make decisions based on fact, not prejudice. They have a preference for innovation."

Subordinate As A Leader

Often with small groups, it is not the manager who emerges as the leader. In many cases it is a subordinate member with specific talents who leads the group in a certain direction.

When a natural leader emerges in a group containing a manager, conflict may arise if they have different views. When a manager sees the group looking towards someone else for leadership he may feel his authority is being questioned.

"Leaders are observant and sensitive people. They know their team and develop mutual confidence within it."

Loyalty

Groups are often more loyal to a leader than a manager. This loyalty is created by the leader taking responsibility in areas such as:

• Taking the blame when things go wrong.
• Celebrating group achievements, even minor ones.
• Giving credit where it is due.

"The leader must take a point of highlighting the successes within a team, using charts or graphs, with little presentations and fun ideas"

The Leader Is Followed. The Manager Rules

A leader is someone who people naturally follow through their own choice, whereas a manager must be obeyed. A manager may only have obtained his position of authority through time and loyalty given to the company, not as a result of his leadership qualities. A leader may have no organisational skills, but his vision unites people behind him.

Management Knows How It Works

Management usually consists of people who are experienced in their field, and who have worked their way up the company. A manager knows how each layer of the system works and may also possess a good technical knowledge. A leader can be a new arrival to a company who has bold, fresh, new ideas but might not have experience or wisdom.

Conclusion

Managing and leading are two different ways of organizing people. The manager uses a formal, rational method while the leader uses passion and stirs emotions. William Wallace is one excellent example of a brilliant leader but could never be thought of as the manager of the Scots!

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