In Praise of Walls

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CONTRARIA

In recent years, a “postcompany” school of business experts has argued that leaps in information technology have made possible a new world of seamless collaboration among businesses, one that will bring enormous gains in efficiency and flexibility. Indeed,

the experts counsel, executives should look for opportunities to tear down the “walls” around their organizations, merging their companies into amorphous “enterprise networks” or “business webs.”

The author concedes that the universal IT infrastructure that has been developed over the past decade does create pressures to homogenize business processes and organizations. But he warns that it is dangerous

for companies to assume that the “death of distance” brought about by new communications technologies will mean the death of the company. New technologies will never conquer cutthroat competition, and managers need to be wary of alliances, outsourcing contracts and specialization initiatives that foreclose opportunities for advantage and put long-term profitability at risk. Companies will always need the walls they have so carefully erected over the years to protect their advantages.

Nicholas G. Carr is the former executive editor of Harvard Business Review and author of Does IT Matter? Information Technology and the Corrosion of Competitive Advantage (Boston: Harvard Business School Press, 2004), from which this article is adapted. Contact him at ncarr@mac.com

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