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Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : Information & Management, Volume 41, Issue 8, November 2004, Pages 1003–1020
Strategic alignment or “fit” is a notion that is deemed crucial in understanding how organizations can translate their deployment of information technology (IT) into actual increases in performance. While previous theoretical and methodological works have provided foundations for identifying the dimensions and performance impacts of the strategic alignment between IT, strategy, and structure, few attempts have been made to test the proposed theory empirically and operationalize fit systemically. Based on a gestalt perspective of fit and theory-based ideal coalignment patterns, an operational model of strategic alignment is proposed and empirically validated through a mail survey of 110 small firms. Using cluster analysis, it was found that low-performance firms exhibited a conflictual coalignment pattern of business strategy, business structure, IT strategy, and IT structure that distinguished them from other firms.
The trend toward globalization and virtualization of the business environment remains unabated and has spawned profound transformations, both internal and external, as most organizations must re-create their value chain and strive for closer relationships with their customers and business partners. In response to or anticipation of changes in their environment, most organizations are deploying information technology (IT) at an increasing rate. Thus, it has raised a fundamental question underlying these transformations: how can an organization actually translate its IT investments into increased business performance, be it in terms of productivity, increased market share, profitability or other indicators of organizational effectiveness? Given the complex nature of this question, some researchers surmised that the answer would be predicated upon adopting a contingency theory perspective, whereas IT would influence business performance to the extent that it would be in “alignment” or “fit” with the strategic, structural, and environmental dynamics specific to each organization. Assuming there is no single best way to invest in IT, theoretical IS contingency frameworks have been proposed, purporting to describe and explain the impact of alignment upon performance. At the empirical level, some authors have examined the relationship between strategic and IT management, and between organizational and IT structure. However, studies that have actually operationalized alignment and demonstrated its effect upon organizational performance have been few and far between. Adopting a definition of fit as gestalt, our study examined the impact of the coalignment between business strategy, business structure, IT strategy, and IT structure on business performance in 110 small and medium-sized firms.
نتیجه گیری انگلیسی
The analysis of the results leads us to generally accept the research proposition that conflictual coalignment patterns of business strategy, business structure, IT strategy, and IT structure will exhibit lower levels of business performance. There are, however, particularities that must be discussed. Out of the four groups of organizations (Groups 1–4), three of them (Groups 1, 3, and 4) show non-conflicting patterns, and one group (Group 2) exhibits a conflicting pattern. Following our proposition, Groups 1, 3 and 4 should all be associated with firms exhibiting higher performance in terms of growth and profitability. This is true for Groups 1, and 4, but not for Group 3 which has a non-conflicting alignment associated with lower performance. Group 2, showing a conflictual pattern, conforms to the research proposition by being associated with lower performance. 6.1. Strong performers Group 4 is the one that shows the greatest coalignment among the four clustering variables since each variable is rated as high (H). In Group 4, all variables were highly related and aligned. These organizations displayed important characteristics. First, they acted strategically in spending time and money to analyze large amounts of data on their past and present performance, trying to identify tendencies and predict the future, and being proactive relative to new markets and new products or services. Second, they adopted a complex organization structure where tasks were highly formalized, specialized, and vertically differentiated. Third, their IT strategy put much emphasis on environment scanning and on the strategic use of IT so that their portfolio of IT applications was fully justified in terms of profitability, cost-effectiveness, and organizational priorities. Finally, associated with high levels of growth and profitability in Group 4 was an IT function structured such that IT personnel followed systematic and comprehensive development methods for the implementation and management of IT, completing “by the book” each of the steps of planning, acquisition or development, implementation, and control. Another group that showed a non-conflictual pattern of coalignment was Group 1, a group that performed as well as Group 4, even though its level of congruence between the four alignment domains was not as high. Group 1 showed a high level of business alignment although the organizations in this group displayed on average only a moderate level of strategic orientation matching a moderate level of structural complexity. In comparison to Group 4, they spent less time analyzing their business data, searching for explanations for variations in growth and profitability, developing scenarios of the future, or searching for the “killer” product or service. Accordingly, their structure was only moderately formalized, with only a little specialization and some vertical differentiation. IT alignment was strong in Group 1, with high nominal levels of IT strategy and IT structure. These organizations were very similar to Group 4 in their way of scanning their environment, emphasizing the strategic use of IT and adopting a highly structured process in managing IT. Group 1 showed only moderate levels of congruence in terms of the four other types of alignments, these being strategic alignment, structural alignment, and the two cross-dimensional alignments. The moderate strategic alignment results formed a mismatch between the business strategy, which was at a moderate level, and the IT strategy, which had a high level. At first glance, this situation could seem somewhat counter-intuitive, since one might think that the IT strategy should support the business strategy, and not the other way around. However, this was previously observed in a study, where business strategy and strategic IT management showed mutually moderating effect in relation to performance . In this case we had a group of organizations where the IT personnel was eager to find and implement profitable IT applications for the business, whereas this was only a moderate concern for the organization as a whole. Structural alignment was also at a moderate level in Group 1 where the IT function was well structured, as reflected in the managers’ use of comprehensive project management methods whereas the business structure was only of moderate complexity. Given these results, the two cross-dimensional alignments were also at a moderate level. Hence, alignment domains were not perfectly coaligned; still, there were not so misaligned as to inhibit business growth and profitability. Given Group 1’s overall characterization as being non-conflicting, added credence was thus given to the validity of the research proposition. 6.2. Moderate and weak performers While Groups 1 and 4 were both strong performers, Groups 2 and 3 were not. Group 2 presented a conflictual coalignment situation, given that of six possible alignments, one was high (IT alignment), two were moderate (business alignment and the strategy-IT structure cross-alignment), and three others were low. The low nominal levels of IT strategy and structure played a major role. Their moderate to low levels of congruence with business strategy and structure domains characterized coalignment as being conflictual overall. As firms in Group 2 were not strong performers on average, this again provided empirical support for the research proposition. The last group, Group 3, was a most interesting one, since it seemed to contradict the research proposition. yet it was composed of firms that were not strong performers. Indeed, with low nominal levels for all four alignment domains, four types of alignments end up as high and two as low. On the one hand, it was a surprise to find so many firms (nearly 30% of the sample) showing minimal levels of strategic orientation, structural complexity, IT strategy, and IT structure. Their status as small and medium-sized enterprises (SMEs) might be the reason why this was so. On the other hand, the other 70% were also SMEs. Thus, one had to wonder why the former did not perform as well as the latter in terms of growth and profitability since they did display a non-conflicting coalignment pattern. A similar result was reported and analyzed in a prior study, indicating that the “low–low” coalignment pattern of strategic orientation and strategic IT management was less plausible a priori and less effective empirically in explaining performance than the “high–high” pattern, contradicting the bivariate “matching” alignment perspective. More recently, using a bivariate “profile deviation” alignment perspective, no significant relationship was found between coalignment and performance for organizations whose strategic activities were minimal in terms of aggressiveness, proactiveness, and analysis . It was concluded that “the importance of aligning IS strategy and business strategy may not be as universal as previously believed”. Using a multivariate gestalt approach, the results of the present study leads one to conclude that using the fit between business dimensions and IT dimensions to explain performance is valid only if organizations have attained minimum thresholds on all four alignment domains; i.e. are not systematically at the low end of the spectrum.