How to get Strategic Business Units selling together? The case of a global technology company with several SBUs
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School of Business | Master's thesis
AbstractAs the digitalization disrupts the traditional IT services industry and the customers tend to seek for total solutions instead of pieces of IT services from several service providers, more understanding is needed of the most optimal characteristics of modern customer-centric service companies. Also, as the large companies tend to be organized into strategic business units (SBUs), maximizing the cross-selling between the units is important to stay competitive in the continuously developing markets. The main objective of this thesis is to identify and discuss the factors that cause the phenomenon when SBUs do not primarily maximize the combined sales of the company or when they even compete and cannibalize each other’s sales in the same customers and markets. This thesis aims to link together the key internal factors of an organization in order to 1) explain the factors that are central in increasing such collaboration and ultimately the total sales of the company and 2) provide suggestions on how to improve the level of cross-SBU collaboration and cross-selling. Based on prior academic research, the full potential of the economic value of multi-business companies is not realized in many cases. One suggestion for the major root cause is difficulty in reaching an efficient cross-SBU collaboration. Thus, the level of cross-SBU collaboration was identified as the key topic to be analyzed further. The other central factors in the analysis were KPIs and incentives, characteristics of organizational structure, knowledge sharing, and organizational culture. A single case study was selected as the research method. The data was gathered via eight semi-structured interviews of Capgemini’s executives and a thematic-coding analysis was utilized as the analysis method. Two main research questions and three initial hypotheses were formulated. In Capgemini’s case, the key suggestions for increasing the cross-SBU collaboration were 1) to streamline and centralize sales activities, especially in terms of having one clear go-to-market inter-face towards the clients instead of having own sales and account management functions in each SBU, 2) to streamline the bonuses so that the sales employees would be incentivized to sell the products and services of other SBUs, and 3) to increase the communication and knowledge sharing between the SBUs so that at least the offerings, as well as sales-related objectives of each SBUs, would be understood by other SBUs. Additionally, the siloed SBU structure was not seen to work appropriately anymore due to the development of the industry. Thus, a thorough upgrade to the organizational structure was suggested which, however, seemed to be a Capgemini-specific finding. Although the findings provided clearly generalizable conclusions, some limitations due to the limited scope of the study and specific type of the case company still remain, and thus, the thesis will provide several ideas for further research on the topic.
Thesis advisorKodeih, Farah
strategic business unit, organizational design, cross-SBU collaboration, organizational structure, intra-organizational competition, incentives, knowledge sharing, business strategy