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9. Modular Structure

Assessment Statement

“The business unit employs a Modular Structure with discrete (a) SBUs for established businesses and (b) entrepreneurial ventures to ambidextrously drive current profits and strategic transformation, coordinated by strategic leadership (HQ) that manages a network of competencies across the SBUs and ventures.”

Scoring Guide

Score
Description
5
Strongly Agree: Core competencies are clearly defined, well understood, and guide decision-making.
4
Agree
3
Neutral: Core competencies are defined but not well understood by managers.
2
Disagree
1
Strongly Disagree: Core competencies are not clearly defined.

Interpretation

This item assesses whether the business unit uses a modular structure — with discrete strategic business units (SBUs) for core operations and separate entrepreneurial ventures — to drive both current performance and long-term transformation. It evaluates how effectively this structure is coordinated by strategic leadership (HQ) that manages a network of core competencies across these units.

This statement addresses:

  1. Modularity: Is the business organized into flexible, distinct units that focus on different strategic horizons?

  2. Ambidexterity: Can the organization balance operational efficiency with innovation?

  3. Leadership Coordination: Does HQ strategically align resources and competencies across units?

Example: Procter & Gamble (P&G) Modular SBUs, Score: 5 – Strongly Agree

P&G operates with multiple Strategic Business Units (SBUs)—such as Baby Care, Beauty, Fabric & Home Care—each operating semi-autonomously under the P&G HQ. They also run innovation ventures (like the “Connect + Develop” external partnerships) to pursue breakthrough products beyond existing lines. Modularity: Distinct SBUs focused on core product categories, with flexibility to adapt quickly. Ambidexterity: SBUs manage current market performance while innovation ventures explore next-generation products. Leadership coordination: P&G’s corporate HQ aligns competencies (e.g., R&D, marketing, supply chain) across SBUs and ventures, sharing best practices and talent.

Reference: https://www.sciencedirect.com/science/article/pii/S2199853122010228