Should the e-waste factory be a separate business unit?

• A. No, keep it integrated.
• B. Yes, as a separate unit to focus management, though it could increase administrative costs and reduce coordination.
• C. Create a Joint Venture with another firm.
• D. Sell the unit to a strategic partner.

Answer: (B)

Separating the e-waste operation into its own unit focuses management on a distinct activity with its own customers, processes, and regulatory needs. When a business has a function that requires specialized expertise, budgeting, and performance targets, a standalone unit makes it easier to set clear objectives, measure success, and allocate resources specifically to that activity. It also clarifies accountability: a dedicated leader can drive strategy for e-waste handling, compliance with environmental rules, and the development of appropriate recycling technologies, while the rest of the company can pursue its own goals. The parent company can still provide shared services, but the unit’s performance is easier to track and manage on its own.

The trade-off is that creating a separate unit can raise administrative costs and may reduce coordination with other parts of the business, so the decision weighs the benefits of focus and clearer control against the added overhead and potential silos. Keeping everything integrated would dilute responsibility and make it harder to assess the e-waste operation’s profitability; a joint venture or selling the unit would introduce external governance or divestment considerations that change control and strategic direction rather than simply organizing for better management.