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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.,
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1. A.D. Chandler, Jr., Strategy and Structure: Chapter in the History of American Industrial Enterprise (Cambridge, Massachusetts: MIT Press, 1962);
R. Rumelt, Strategy, Structure and Economic Performance (Boston: Harvard Business School Press, 1974);
L. Donaldson, “Strategy, Structural Adjustment to Regain Fit, and Performance,” Journal of Management Studies 24 (1987): 1–24;
R.E. Miles and C.C. Snow, “Fit, Failure and the Hall of Fame,” California Management Review, Spring 1984, pp. 10–28; and
R.E. Miles and C.C. Snow, “Causes of Failure in Network Organizations,” California Management Review, Summer 1992, pp. 53–72.
2. J. Child, “Organizational Structure, Environment and Performance: The Role of Strategic Choice,” Sociology 6 (1972): 1–22; and
L. Bourgeois, “Strategic Management and Determinism,” Academy of Management Review 9 (1984): 586–596.
3. M.S. Scott Morton, ed., The Corporation of the 1990s: Information Technology and Organizational Transformation (New York: Oxford University Press, 1991).
4. D. Leonard-Barton, “The Factory as a Learning Laboratory,” Sloan Management Review, Fall 1992, pp. 23–38;
E. Rogers, Diffusion of Innovations (New York: Free Press, 1983);
E. von Hippel, The Sources of Innovation (New York: Oxford Unversity Press, 1988); and
R. Cooper and R. Zmud, “Information Technology Implementation Research: A Technological Diffusion Approach,” Management Science 36 (1990): 123–139.
5. See, for example, S.M. Ervin, “Integrating Visual and Environmental Analyses in Site Planning and Design,” GSD News, Winter–Spring 1993, p. 16.
6. A. Herron, cited in
T. Ostler, “More Than Just a Toy for Hippies,” World Architecture 25 (1993): 88.
7. Scott Morton (1991); and
S. Zuboff, In the Age of the Smart Machine (New York: Basic Books, 1988).
8. P. Jodard, “The Ultimate Designing Machine,” World Architecture 25 (1993): 80.
9. Miles and Snow (1984), p. 15.
11. Scott Morton (1991), p. 20.
12. See, for example, Miles and Snow (1984, 1992); and
Scott Morton (1991).
13. See, for example, T.H. Davenport and J.E. Short, “The New Industrial Engineering: Information Technology and Business Process Redesign,” Sloan Management Review, Summer 1990, pp. 11–27; and
P. Keen, Shaping the Future (Boston: Harvard Business School Press, 1991).
14. N. Venkatraman, “IT-Induced Business Reconfiguration,” in Scott Morton (1991), pp. 122–158.
15. R.A. Burgelman, “A Model of the Interaction of Strategic Behavior, Corporate Context, and the Concept of Strategy,” Academy of Management Review 8 (1983): 61–70;
C. Lindblom, “The Science of ‘Muddling Through,’” Public Administration Review 19 (1959): 79–88;
H. Mintzberg, “Strategy Formation: Schools of Thought,” in Perspectives on Strategic Management, ed. J.W. Fredrickson (New York: HarperBusiness, 1991), pp. 105–235;
J. Quinn, Strategies for Change: Logical Incrementalism (Homewood, Illinois: Dow Jones-Irwin, 1980);
J.G. March and J.P. Olsen, Ambiguity and Choice in Organizations (Bergen, Norway: Universitetsforlaget, 1976); and
K.E. Weick, “Substitutes for Strategy,” in The Competitive Challenge, ed. D. Teece (New York: Harper & Row, 1987), pp. 211–233.
16. Weick (1987); and
17. R. Cyert and J. March, A Behavioral Theory of the Firm (Englewood Cliffs, New Jersey: Prentice Hall, 1963).
18. K.E. Weick, “Organizational Redesign as Improvisation,” in Organizational Changes and Redesign, ed. G.P. Huber and W.H. Glick (New York: Oxford University Press, 1993), pp. 346–379.
19. C. Ciborra, “From Thinking to Tinkering: The Grassroots of Strategic Information Systems” (New York: Proceedings of the Twelfth International Conference on Information Systems, 1991), pp. 283–291.
20. Scott Morton (1991); and
J. Henderson and N. Venkatraman, “Strategic Alignment: A Model for Organizational Transformation through Information Technology,” in Transforming Organizations, ed. T. Kochan and M. Useem (New York: Oxford University Press, 1992), pp. 97–117.
21. P. Yetton and K. Johnston, “Information Technology and the Dynamics of Strategic Fit” (Kensington, Australia: University of New South Wales, working paper, 1993).
22. M. Markus and D. Robey, “Information Technology and Organizational Change,” Management Science 34 (1988): 583–598.
23. Ciborra (1991); and
Leonard Barton (1992).
24. M. Hannan and J. Freeman, Organizational Ecology (Cambridge, Massachusetts: Harvard University Press, 1990).
25. Ostler (1993).
Another innovative large-scale use of Macintosh computers is in urban design and planning in Toronto. Kristof Jacunski explains how the entire central city area of Toronto has been modeled in three dimensions on the computers and how designs of proposed city developments are entered against this model, with computer checks of how the development would affect light, shadows, views, and compliance with city planning regulations. See:
K. Jacunski, “Practice,” Progressive Architecture 6 (1993): 40–41.
26. Jodard (1993), p. 80.
27. Ibid., p. 81.
28. Mintzberg (1991);
Weick (1987, 1993); and
29. Ciborra (1991).