International businesses faced new strategic challenges in the 1980s. Corporations that had once succeeded with relatively one-dimensional strategies — efficiency, responsiveness, or ability to exploit learning — were forced to broaden their outlook. Successful “transnational” corporations integrated all three of those characteristics. They did so by building on the strengths — but accepting the limitations — of their administrative heritages. This is the first of two articles; the second will describe how actual companies made that transition.