The Power of Strategic Integration

The Power of

Strategic Integration

How can multibusiness

corporations exploit the

opportunities that take

full advantage of their

capabilities and their

potential to pursue new

strategies?

Robert A. Burgelman

and Yves L Doz

A,, multibusiness corporations face the strategic imperative

imposed by the stock market: maximizing the profitable growth of

their businesses. Long-term success in meeting that imperative

requires developing new strategy-making capabilities. During the early

1990s, many multibusiness companies focused on improving profitability

through operational integration. They reengineered, focusing

on the capabilities that would improve speed, quality and efficiency —

and pruning business activities that no longer fit the value-creation

logic of the corporate strategy. Then, starting in the late 1990s, senior

managers began to focus on integrating strategies to add to revenue

growth. Strategic integration involves more fully exploiting growth

potential by combining resources and competencies from business

units and directing those units toward new business opportunities that

extend the existing corporate strategy.'

Today leaders of multibusiness corporations are learning to identify

the inaxiInimi'Strategic-opportunity set — those opportunities that can

let companies take the fullest advantage of their capabilities and their

potential to pursue new strategies. But to exploit those opportunities,

managers need to become accomplished at what we call complex strategic

integration (CSl). (See"About the Research")

Five Forms off Strategic integration

Perceiving the maxiEiiuni-strLUegic-opportunity set and tackling complex strategic integration

are difficult responsibilities. Senior managers must be able to see potential business

opportunities that do not yet exist — as well as the unarticulated strategies that are

at the frontier of what a company is capable of doing. To help with those tasks, we propose

a conceptual...