Sharp jumps in the price of oil and gas caused by the US Gulf Coast hurricanes of 2005 delivered huge profits to ExxonMobil and other major oil companies, in some cases helping them report record quarterly earnings. But even beyond the oil patch many other companies, in a broad set of industries, also generated massive earnings. Indeed, a growing number of companies, such as Citigroup, General Electric, IBM, Microsoft, Toyota Motor, and Wal-Mart Stores, now earn around $10 billion or more annually.

The emergence of such mega-institutions and the ways in which they are developing their extraordinary scale and scope represent a basic structural change in the landscape of business. Although the average mega-institution doubled its revenues from 1984 to 2004, by far the most striking increase has come in these companies' net income and market capitalization, which jumped three- and sixfold, respectively, during that period.

In today's global marketplace, mega-institutions face few external limits on their size and profitability: for instance, Citigroup—the world's largest financial institution, with $250 billion in market value and nearly 300,000 employees—holds only 5 percent of the global financial-services market. Straightforward projections, based on the experience of the past 20 years, indicate that in 2015, 350 companies would be larger than the smallest company on the list of today's 150 biggest corporations. The largest of them would approach $700 billion in market capitalization and earn $40 billion or more a year.

For mega-institutions, navigating a strategic landscape populated by other such companies will be one of the defining management challenges of the 21st century. With trillions of dollars of value at stake over the next decade, huge companies that unleash the potential of the many talented professionals they employ—by overcoming complexity and by discovering and mobilizing the distinctive capabilities of these employees across the enterprise—will stand to create value on a truly global scale.

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