Which of the following statements is true of strategic business units (SBUs) of an organization?

a. They typically have strategies of their own.
b. Their functions are limited to manufacturing.
c. They typically serve the same target markets as the other SBUs of the organization.
d. They do not have missions of their own.

ANSWER: a

When properly created, a strategic business unit has a distinct mission and a specific target market. Each SBU has its own rate of return on investment, growth potential, and associated risks, and requires its own strategies and funding.