Changes in business strategy usually precede structural adaptation, according to predominant theories, with strategy causing a realignment of a firm’s management processes.1 While there has been some debate on the degree of strategic choice,2 this is the dominant view, both descriptively and normatively. It is also a perspective that researchers on the strategic management of information technology (IT) have adopted, implicitly or explicitly. For example, the widely cited MIT Management in the 1990s framework assumes that a firm’s business strategy drives the subsequent alignment and fit of organization structure, management processes, individual skills and roles, and technology.3
Here we present a case study of the strategic application of information technology in which a very different process took place — almost the reverse of the conventional, rational models. Rather than beginning with strategy formulation, the process began with the tactical and incremental adoption of technology. In turn, that became the catalyst for change in individual roles and skills, followed by structural adaptation, and, later, changes in the firm’s management processes, which embedded and reinforced organizational learning. From the new configuration, a business strategy and vision began to emerge, as a range of new strategic options became apparent. In this way, the IT strategy and subsequent business transformation gradually evolved out of tactical responses to operational needs. In time, the process came to shape the firm’s strategic fit.
The strategic value of the firm’s gradual transformation was not simply a direct consequence of the application of IT but a function of the particular interaction of organizational, individual, and technological factors, for which IT was the initial catalyst. This interaction created strategic fit and embedded processes of learning in the firm. Thus this is a case study of organizational adaptation and strategic dynamics, in which IT plays a critical role, rather than a study of diffusion of a technical innovation.4
We also show how the change process had important implications for the management of risk. The traditional change model revolves around a strategic vision and the implementation of large-scale change, which is inherently high risk. In contrast, the change process here was characterized by incremental, sequential, independent steps, which minimized threats to the firm by decoupling the risks and spreading them over different projects and over time.
We begin with a description of how the change process unfolded at Flower and Samios Pty. Ltd.,