ITC Limited, Bangalore (A)

Abstract

ITC Limited was the first large Indian transactional firm to undertake significant diversifications and restructuring as part of its corporate strategy. The diversification strategy was designated by visionary leaders and professional management from within. The strategy required to be supported by squeezing profits from low margin high volume traditional businesses that were close to growth saturation and maturity. The company was required to set the rate of engagement with its diversification strategy by determining the extent to which the deep restructuring in its traditional businesses was feasible and sustainable. The case brings out hidden dimensions of power conflict that strategy formulation and implementation involve and raises questions about the alleged inflexibility of labour markets, the interface between product markets and internal labour development and management processes.