Memo RE: Facing a Strategy Vector: Autonomous Strategic Action by R.A. Burgelman
In this excerpt from a textbook, the author examines how Andy Grove, the CEO of a chipset venture, created an extremely strong strategy process based mainly on Intel’s core microprocessor business. Burgelman talks about how the venture succeed even though top management at Intel didn’t regard the chipsets as a business in its own right, but rather as a strategic support for microprocessors. Using data from interviews with most of the key personnel involved in the venture, this chapter describes and analyzes its development within Intel, and the steps and challenges that were taken to have it succeed.
The author uses a “process model” to show Internal Corporate Venturing, which involves three generic levels of management (venture team, middle and senior management, and top management) and two generic levels of strategy (corporate-level strategy and venture-level strategy). Corporate-level strategy covers the overall structural context and strategic context, also called the overlaying processes. On the other hand, venture-level strategy deals with the definition and impetus, or the core processes. In order for the venturing process to be successful, the new venture strategy needs to become part of the corporate strategy at some point in the future.
One major challenge for the different management levels is actually making the integration of the new business into the corporate context happen, which is difficult because these different levels of management have varying perspectives on the strategic situation, and each level deals with different strategic forces. Different from the core business, the strategic action for a new venture is not clearly aligned (or not perceived to be by top management) with the overall corporate strategy. In other words, when it is in the beginning stages, a new venture may not receive the support and access to resources from top management because...
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