Which operating model is characterized by maintaining distinct units with separate processes?

The correct answer is diversification. This operating model is characterized by maintaining distinct business units or processes that operate independently of each other. Each unit within a diversified organization can focus on its specific market or product line, allowing for tailored strategies that cater to diverse customer needs and preferences.

In a diversification model, different units may develop their own business processes, management styles, and cultures suited to their operational goals. This allows for a greater degree of flexibility and specialization, enabling a company to respond effectively to varying market demands and competitive pressures across different sectors.

The other options, while relevant to organizational structures and processes, do not align with the concept of maintaining distinct units. Unification typically refers to a cohesive approach where processes and units are integrated to function as a single entity. Replication involves duplicating successful processes or business models across various units but does not emphasize distinctiveness. Coordination focuses on creating synergies between units rather than keeping them completely separate, which is contrary to the essence of diversification.