With significantly more modular value chains and plug ‘n play business dynamics, the days of the integrated Strategic Business Unit are numbered. Instead, a more leveraged organization will take its place, using the newfound strategic freedom to pursue business opportunities and optimization.
The vertically integrated Strategic Business Unit is an extremely convenient and effective organizational unit. Self contained, bestowed with full accountability, it can focus on the markets it serves. No wonder it is the predominant organizational configuration. The heydays of the SBU are over however. As Value Chains fragment, the need to pursue leverage across business units and even across business boundaries has become very real. Most companies actively engage therefore in partnering, joint venturing, insourcing, outsourcing, licensing, and other forms of cross-business leverage. It is clear therefore that organizational configurations will have to follow suit – and have to migrate towards more leveraged corporations.

Read more: EA – Designing the Leveraged Organization  Reprinted in Strategy & Leadership as “SBU 2.0: a new tool for selecting business opportunities for the multi-unit organization”