ITC Limited was the first large Indian transnational firm to undertake significant diversification and restructuring as part of its corporate strategy. The diversification strategy was designed by visionary leaders and professional managers from within. The strategy required to be supported by generating 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 conflicts that strategy formulation and implementation involve and raises questions about the alleged inflexibility of labour markets, the interface between product markets and internal labour markets and management processes.