As the chemical bonds in a covalent semiconductor are independent of long-range order, semiconductors generally have similar local arrangements not only in the crystalline, but also in the amorphous phase. In contrast, the compound Ge(2)Sb(2)Te(5), which is a prototype phase-change material used in optical and electronic data storage, has been shown to undergo a profound change in local order on amorphization. In this work, ab initio ground state calculations are used to unravel the origin of the local order in the crystalline cubic and the amorphous phase of GeSbTe alloys and the resulting physical properties. Our study shows that this class of materials is characterized by two competing structures with similar energy but different local order and different physical properties. We explain both the local distortions found in the crystalline phase and the occurrence of octahedral and tetrahedral coordination in the amorphous state. Although the atomic rearrangement is most pronounced for the Ge atoms, the strongest change of the electronic states affects the Te states close to the Fermi energy, resulting in a pronounced change of electronic properties such as an increased energy gap.