Strategic Business Unit (SBU)

1. A strategic business unit, sometimes called a responsibility center, is any part of an organization whose manager has control over cost, revenue, or investment funds. SBUs are divided into cost SBUs (managers are responsible for controlling costs), revenue SBUs (managers are responsible for generating revenues), profit SBUs (managers are responsible for producing a target profit), and investment SBUs (managers are responsible for producing a target return on investment). See also responsibility accounting. A business unit within the overall corporate entity which is distinguishable from other business units because it serves a defined external market where management can conduct strategic planning in relation to products and markets.