Four months into her job as CEO of the third-largest private bank, Shikha Sharma has effected a series of organizational changes in Axis Bank. The bank has now realigned its business into four strategic business units (SBU).
The four new SBUs of the bank now are retail banking, SME and agriculture, corporate banking, non-banking retail subsidiaries and corporate centre. Earlier, the bank had a vertical structure with executive directors in charge of retail, corporate banking, mid-corporate and SME banking and IT and business process. Axis could probably be the first bank in the private sector which is going in for an SBU structure. Hemant Kaul, executive director of the bank, who has been heading the retail banking for the past nine years, …show more content…
This unit will own the distribution intensive businesses — retail banking, SME and agri. Mr Chakrabarti was earlier the ED in-charge of mid-corporates and SME. The corporate banking SBU will be headed by V Srinivasan. This unit will own large corporate, mid-corporate, infrastructure, capital markets, treasury and international businesses. He had recently joined the bank from JPMorgan where he was MD and head of markets. Unlike other banks where retail and SME are under a same person, this was not the case in Axis. The move for SBUs will help bring in more business focus into these units. Many of these officials have been given expanded roles in the bank," said a source in the bank on condition of …show more content…
This makes the accountancy more transparent and at the same time, when companies have to make investment decision than this accountancy will come in use for the company. • Strategy – Companies like nestle have 4 different strategic units. One SBU like maggi deals in Food products, other deals in Dairy products like Nestle milkmaid, the third SBU deals in Chocolate products like Kitkat so on and so forth. Thus, in the above example, it is very simple to change strategy for each business unit because the strategy for each is independent of the other.
• Independence – The managers of the strategic business units get more independence to manage their own unit which gives them the opportunity to be more creative and innovative and empowers them for making decisions. The best thing that can happen for SBU’s are decision making which is possible only when these SBU’s are given independence to work by themselves.
• Funds allocation – The last but not the least advantage of strategic business units are that funds allocation becomes simpler for the parent company. Depending on the performance of the SBU, funds allocation can be done on
The four new SBUs of the bank now are retail banking, SME and agriculture, corporate banking, non-banking retail subsidiaries and corporate centre. Earlier, the bank had a vertical structure with executive directors in charge of retail, corporate banking, mid-corporate and SME banking and IT and business process. Axis could probably be the first bank in the private sector which is going in for an SBU structure. Hemant Kaul, executive director of the bank, who has been heading the retail banking for the past nine years, …show more content…
This unit will own the distribution intensive businesses — retail banking, SME and agri. Mr Chakrabarti was earlier the ED in-charge of mid-corporates and SME. The corporate banking SBU will be headed by V Srinivasan. This unit will own large corporate, mid-corporate, infrastructure, capital markets, treasury and international businesses. He had recently joined the bank from JPMorgan where he was MD and head of markets. Unlike other banks where retail and SME are under a same person, this was not the case in Axis. The move for SBUs will help bring in more business focus into these units. Many of these officials have been given expanded roles in the bank," said a source in the bank on condition of …show more content…
This makes the accountancy more transparent and at the same time, when companies have to make investment decision than this accountancy will come in use for the company. • Strategy – Companies like nestle have 4 different strategic units. One SBU like maggi deals in Food products, other deals in Dairy products like Nestle milkmaid, the third SBU deals in Chocolate products like Kitkat so on and so forth. Thus, in the above example, it is very simple to change strategy for each business unit because the strategy for each is independent of the other.
• Independence – The managers of the strategic business units get more independence to manage their own unit which gives them the opportunity to be more creative and innovative and empowers them for making decisions. The best thing that can happen for SBU’s are decision making which is possible only when these SBU’s are given independence to work by themselves.
• Funds allocation – The last but not the least advantage of strategic business units are that funds allocation becomes simpler for the parent company. Depending on the performance of the SBU, funds allocation can be done on