Strat. Change, 9, 145–146 (2000)

Strategic Change, May 2000Copyright Þ 2000 John Wiley & Sons, Ltd.

Editorial Technology,culture andcompetitiveadvantage:inextricable links

Much has been written in this and many other strategy journals onthe need to embrace early, sensitive and committed cultural changeif an organization is to progress and enjoy the corporate vitality andprofitability that its managers and owners want to achieve. Indeedthe previous issue of this journal carried three articles all with some-thing to say about the crucial role of culture in the change process.

The same is equally true of technology, especially information andcommunication technologies which are transforming organizationalstructures as well as business processes. They break down corporateand geographic boundaries and are becoming increasingly vital tothe success and the survival of businesses, irrespective of sector,context or size. Technology is no longer the responsibility of the‘communications department’ which many business structures stilldoggedly retain as a legacy from their past. Communications andinformation networks form the oxygen links of functions within avibrant, contemporary and successful organization.

From many of the papers, case studies, opinions and other sub-missions that come my way as the Editor of Strategic Change, thereis no doubt in my mind that competitive advantage (which is oneof those terms that can mean whatever you like), will belong tothose businesses that grasp the opportunities offered by networktechnology. Those organizations that fail to apply such technologyacross their business processes will find themselves operating at asignificant cost disadvantage to their competitors.

Many of the current actions and management decisions takenby supposedly ‘strategically sophisticated’ British and Europeancompanies are no more than a first step. Simply building on-linelinks with suppliers and customers is not enough. Business pro-cesses must also change to overcome the hierarchical, functionaland geographical barriers and combat threats from new and existingcompetitors in the global marketplace. It is becoming increasinglyclear that network computing will play a fundamental role in meet-ing and exploiting the global economy and only those organizationsthat chose to leverage Internet technologies will have the chance

Editorial

Copyright Þ 2000 John Wiley & Sons, Ltd. Strategic Change, May 2000

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to enter this new century with a significant and sustainable com-petitive advantage.

New technology is one of the key aspects of globalization thatallows smaller companies to operate internationally and competein the same industrial and market context as their larger counter-parts. The current revolution in broadband communications costsis fuelling the oxygen of globalization and allowing business modelsto change—and in some cases, dramatically change. As little as fiveyears ago the investment required to establish a broadband link formany new and emerging organizations would have been prohibitivebut now such costs have tumbled and secure links are available atreasonable rates. A recent statement from a British Telecom stra-tegic planner leaves no room for ambiguity here.

Business to business is where the Internet is at. People con-centrate on consumer website initiatives because it is easier toanalyse and understand. But the Internet is really about trans-forming things such as inventory control and supply-chain man-agement. Business to business is what most of the investment ininfrastructure is for.

Details of how information technologies are simplifying globaltrading are to be found in a recent series of specialist papers fromKPMG that state quite clearly that paperless trading is reducing theadministrative costs in importing and simplifying the whole process.Barriers to international transactions are coming down fast as busi-ness enters a new era of efficient systems management and virtualtrading. This is clearly evident in the series of organizational andoperational adjustments made by many of the European customsauthorities that are now starting to install systems that make thepresentation, declaration and clearance through customs mucheasier. The European Union is moving towards a single authorizationsystem. In essence, this form of virtual warehousing facilitates cus-toms declarations to be effected in one Member State for all of theEuropean Union, irrespective of where the goods are produced orlocated. This obviously has the potential to deliver dramaticreductions in administrative costs and procedures and will impacton the strategic and operational choices of many organizations.

If embracing new technology with all its attendant opportunitiesis the key to sustaining and improving competitive advantage thenmanagerial attention to the ‘softer’ issues must surely be the otheritem on the strategist’s agenda. The successful formulation, pursuitand implementation of strategy demands that those responsible donot neglect the other unique human ingredient that determines andshapes corporate futures—the creation of a vibrant and con-ducive organizational atmosphere, that accepts and welcomesthe need for technological improvements. The management ofculture and technology are fundamental ingredients in fashioningcompetitive advantage.

Graham BeaverEditor