What Is a Strategic Business Unit (SBU)?

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A strategic business unit is a portion of a larger organization that functions semi-autonomously as a profit center. Strategic business units are commonly headed by higher-level members of management, including managing director or vice president roles.

Strategic business units are often more flexible when run as independent organizations than as part of a strict hierarchy of departments. Strategic business units may be structured similarly to their parent organization, with subdepartments including finance, human resources and information technology. A strategic business unit may focus on a particular service or product line offered by a corporation, differentiating its results through a more singular focus.