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Effect of Organisational Culture on Information Technology

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Published: Wed, 07 Feb 2018

The Effect of Organizational Culture on Information Technology/Business Strategic alignment in Saudi Firms

Abstract

This research effort is intended to study the dynamic relationship between the IT Strategy and the overall Business Strategy in Saudi Firms. IT strategies perceived to be developed in isolation, meaning that such strategies are put forward by IT managers without any involvement of top business managers. The IT manager may be oblivious or he/she may not have a clear idea of the business strategy leading to a strategic diversion where all important technical investments decisions are made by the IT director alone.

The researcher recognized some major factors that influence alignment including Organizational Culture; therefore the researcher investigated the current organizational Culture at large selected Saudi firms. In addition, perceptions of Information Technology Value and utilization in the targeted companies was identified and analyzed through set of questionnaires and interviews in order to help the researcher to establish the relationship between Information Technology and Organizational Culture, since it would be a valuable part of forming the proposed strategic alignment model. The Saudi firms, where questionnaires have been distributed, and interviews have been conducted are SABB (Saudi British Bank), Saudi Airlines, AL-Marai, and AlTawniah.

The researcher is aiming to collect further data from previous Strategic Alignment Models, and collect more information through additional interviews and questionnaires in order to interpret and validate the findings of the first stage that will lead to the design of the final stage of the Strategic Alignment Model. All data will be combined to give the base for a Strategic Alignment Model. This new model will be a practical one that should fit the Saudi environment.

1. Introduction

Strategic alignment has become one of the most important topics for researchers in all industries. Its main objective is to establish and arrange a relationship between business and IT strategies. From a competitive advantage point of view, organizations with such alignment will have edge over others.

2. Context of the Research

In the last few decades, the gap between business strategy of organizations and their IT strategy has been noticed by researchers and practitioners across the globe. Numerous research articles have been written to indicate this fact and to highlight the importance of bridging the gap between IT strategy and business strategy of organizations, to achieve coordinated results and efficiency for the enterprise. MIS professional, researchers have understood the significance of the issue which exists at global level [1]. Figure (1) summarizes the Information System/Business relationship which can be described as ‘Interdependent’; where any changes in the IS (Software, Hardware, Database and Telecommunication devices will have an impact on the Business and vice versa; any change in the business (Strategy, Rules and Procedures) will have its impact on the Information Systems function of the organization [2].

FIG01-07Since Information systems and organizations influence each another. On the one hand, information systems must be aligned with the organization to provide information that is important to different groups according to the organization need. On the other hand, the organization must be aware of and open itself to the influences of information systems in order to benefit from new technologies [3].
Figure 1: The interdependence between organizations and information systems

(Laudon &Laudon, 2006)

The interaction between information technology and organizations is very complex and is influenced by a great many mediating factors, including the organization’s structure, standard operating procedures, politics, culture, surrounding environment, and management decisions as shown in figure (2).

One mediating factor was selected by the researcher, which is the organizational culture, and the purpose of this selection will be discussed in a later section.

Managers must be aware that information systems can markedly alter life in the organization. They cannot successfully design new systems or understand existing systems without understanding organizations. Managers decide what systems will be built, what they will do, how they will be implemented. Sometimes, however, the outcomes are the result of pure chance and of both good and bad luck [2].

3. Original Work in Strategic Alignment

Strategic Alignment is defined as the process of creating and managing a business driven IT organization, for which the main focus is implementing information oriented Solutions, that is most important to meeting the business goals, objectives, and strategies of the enterprise [4]. In order to make organizations successful, it is important for all parts of the organization to move in the same strategic direction. Of particular importance is that the business strategy and the IT strategy are complementary. If they are trying to move the organization in different directions the risk of failure may increase. Given the high level of resources invested in IT by most organizations it is important for it to be used as a strategic resource to contribute towards the achievement of business objectives. The strategic alignment would measure the relationship between an organization’s IT function and its business objectives. The degree to which alignment is present in an organization will depend on many factors. These factors will include the knowledge of the subject by management, the organizational infrastructure and culture, the nature of the business, the technology in use, and the ability of the organization to manage change. It is very important to realize that Strategic alignment is a process and not a project. Also Alignment issues should be considered at all levels of the organization, meaning that the occurrence of alignment at one level does not guarantee alignment at another [5].

3.1 Strategic Alignment Models

Alignment models show the relationship between the various domains (Business: mission, vision, objectives and tactics and Technical: processes, skills and knowledge) that influence alignment, which is dynamic with a strategy or technology decision impacting on one or more of the other domains. The alignment model within an organization must be continually reviewed due to the ongoing change in the internal and external environments. Corrective action must be taken to realign the organization when necessary. Many managers do not realize that a decision imposed on one domain may impact on one or more of the other domains [6]. Different people depending on their experience and background will have different strengths in each domain. An IT professional would likely have strengths in IT strategy or infrastructure while a business manager would likely have strengths in business strategy or organizational infrastructure. This could lead to problems if communication channels are not strong and management processes are not in place to facilitate alignment.

There are number of models which were designed to attempt to come up with such an alignment. Some of the most important models are the following:

A. Strategic Alignment Model (Henderson and Venkatramon, 1993)

The model has four domains or variables: business strategy, IT strategy, organizational infrastructure and IT infrastructure [7].

Butler and Fitzgerlad defined the context of the business strategy domain as business scope which refers to “the decisions that determine where the enterprise will compete”; distinctive competencies which “pertains to the areas that determine how the business will compete in delivering its products and services” and business governance which concerns “the choices that enterprises make when competing in the market place, e.g., whether alliances are entered into or not”. While administrative infrastructure refers to “the roles, responsibilities, and authority structure”; the business processes are “the manner in which key business functions are carried out” and skills refer to “the knowledge and competencies of organizational actors.

In the context of IT strategy define technology scope as “the specific types of technology that are considered to be critical to the organization”; systemic competencies refer to “the salient characteristics and technological strengths of the IT systems” and IT governance as “issues refers to the manner in which IT systems are developed”. On the other hand, The IT architecture as “the policies and decisions made in regard to the integration of application systems, systems software, and hardware into cohesive platforms that are captured by the IT architecture dimension”; The processes are referred to as “ how IT systems are planned, developed, implemented, and operated” and the skills dimension is captured by “the experience, competencies, commitments, values, and norms of the participants in the planning, development, implementation, and operation processes” [8].

B. Top-Down Alignment Model

The theory consist of an input-process-output model, seven constructs, six Causal relationships and six hypotheses as shown in figure 4 The input-output-process model provides the initial bases for the theory. The Seven constructs are: the external environment, the internal environment, Planning resources, the planning process, the strategic information systems plan, the implementation of the strategic information systems plan, and the alignment of the strategic information systems plan with the organization’s Business plan. These seven constructs exhibit causal relationships among each other illustrated through hypotheses [9].

4. Knowledge Gap

Based on the above, and through screening some of the existing strategic alignment models in the literature review, the researcher figured out that to achieve such an alignment there is a need to consider and integrate the following points:

1. Most of staff, if not all, is unaware of business goals, especially in the environment of Saudi Arabia [10].

2. Important technical investments decisions are made by the IT manager alone [11].

3. No relationship exists (Gap) between Business strategy and IT strategy [12].

4. A lot of factors are not taken into consideration when forming strategic alignment, such as Structure, Culture, politics, and others [13].

5. Strategic alignment models discussed only top management level and discarded other levels [14].

6. Previous strategic alignment models are hard to be understood and implemented in reality [15].

The models discussed in the literature review may have achieved one or two of the above six points, however, there is no existing model that has achieved the above six points altogether.

Based on the above, I have selected Strategic Alignment as a starting and a centre area of my research that the researcher is building on to fulfill the other points mentioned. The model that the researcher is aiming to establish, differs from the existing ones in that it will meet the requirements and challenges of the Saudi environment taking into consideration the 6 above points.

5. Research Aims & Significance

* To bridge the gap between Business Strategy and Information Technology Strategy through developing and designing a simple Strategic Alignment Model, that includes the essence of the major research works in addition to other strategic alignment theories available

* To highlight the role of socio-cultural aspects as a critical success factor for successful IT implementation, which were not taken into consideration in the past

* To measure the contribution of such a model to business performance.

* To encourage Saudi Firms to use such a model to gain competitive competition.

* To reduce the associated costs of implementing Information Systems in Organization

6. Research methods

The researcher has used the mixed research methodology. Mixed research involves the mixing of quantitative and qualitative methods or paradigm characteristics within a stage of the study or across two of the stages of the research process. It collects data either sequentially of simultaneously to best understand research problems [16].

Advantages of using mixed research includes: the major goal for researcher who design and conduct mixed research is to follow the fundamental principle of mixed research, in other words, the researcher should mix quantitative and qualitative research methods, procedures, and paradigm characteristics in a way that the resulting mixture or combination has complementary strengths and non-overlapping weaknesses. When different approaches are used to focus on the same phenomenon, while providing the same result, is a strong evidence for the result. Other important reason for doing mixed research are to complement one set of results with another, to expand a set of results, or to discover something that would have been missed if only a quantitative or a qualitative approach had been used[17].

Questionnaire

One of the most widely used research techniques can be defined as collecting data through written questions [17]. There are a number of different ways in which questionnaires can be administered; for example: posted to the intended respondents or administered over the telephone or face-to-face. A questionnaire design provides a quantitative description of trends, attitudes, or opinions of a population by studying a sample of that population. From sample results, the researcher generalizes or makes claims about a population [18].

Interviews

Interviews are considered to be the main tool of the qualitative researcher for data collection [18]. Additionally, since the interpretive stance is also being followed, interviews are viewed to be the main and appropriate source from where data has been collected. According to Walsham, interviews allow the best access to the interpretations that the participants have regarding the actions and events, which have or are taking place and the views and aspirations of themselves and other participants. An added benefit is that it allows researchers to step back and examine the interpretations of their fellow participants in some detail, and this is an advantage that other methods may not allow [18].

Data analysis

Data gathered will be analyzed through frequency distributions. These will give way to reviewing the data categories and the number of referrals in each category. With relation to data analysis, the indicators that will be used in evaluating the study include the age of the respondent; the social status; the educational attainment of the respondents; the occupation of the respondents and their length of stay in the company they belong to [19].

The research has involved 4 large organizations, SABB (Saudi British Bank), Saudi Airlines, AL-Marai, and AlTawniah, where interviews have been conducted with CIO’s and CEO’s to have a clear idea about the company’s business strategy. Also, other interviews will take place with IT directors to investigate about the Information Technology (IT) strategy and its relationship with the business strategy. In addition,2 sets of questionnaires were distributed among different levels of the organizations to come up with the types of organizational culture and the use of Information technology in those organizations. At the end, data were collected and analyzed through using SPSS software.

7. Expected Research Outcomes

The results from this research are anticipated to be of great help to top managers, strategic planners, IT managers, and other work force in Saudi environment, and will contribute to the following factors:

* Increasing the awareness of the importance of Strategic Alignment Model Concept.

* Selling the quick wins, by having strategic alignment achieved effectively.

* Showing the importance of the use of Information Technology in organizations

* Identifying the organizational culture as a major factor of achieving strategic alignment.

* Encouraging decision makers and top management to apply and implement strategic alignment throughout the organization.

* Highlighting the weaknesses of previous strategic alignment models and the lessons learned, which would help other researchers for future work

8. Indicative Thesis Structure

The thesis will contain seven chapters (tentative):

Chapter 1: Introduction:

Presents an overview about the research subject. It shows the importance of strategic alignment in all sectors, followed by bridging the gap between business strategy and IT strategy, and the factors that affect strategic alignment. The research aims and significance then was explained followed by a brief discussion of the research methodology, research framework, then prospected research contribution was mentioned.

Chapter 2: Literature Review:

Provides the literature review for this research. It begins with explaining Business strategy, Business planning and its tools, followed by a discussion of IT strategy, IT planning, and its tools. Then a discussion of strategic alignment was presented. And ended with an overview of previous strategic alignment models.

Chapter 3: Research design and methodology:

Describes the research design and methodology conducted in this study. It starts with discussing the research general strategy, methodology and the reasons for selecting the methods of data collection. Followed that is a detailed explanation of the quantitative and qualitative methods, were a detailed description of the design of the research instruments was presented.

Chapter 4: Developing the Parameters of the Strategic Alignment Model:

Presents the need for a strategic alignment Model that can bridge the gap through identifying 3 parameters: Organizational Culture, Business strategy and its domains, and IT strategy and its domains

Chapter 5: Questionnaires Analysis:

Discusses and examines the data collected through the questionnaires for both, identifying the organizational culture, and the use of IT in the 4 Saudi firms

Chapter 6: Interviews Analysis:

Talks about and analyses the data collected through the interviews in the 4 Saudi firms.

Chapter 7: Conclusion and Recommendations:

Proposes the new strategic alignment model, and concludes the study and gives recommendations and future directions.

9. Training Undertaken

* Using electronic library resources in Sep-2006.

* Stage I part A on 30/Aug/2006.

* Stage I part B on 31/Aug/2006.

* Stage II Part A (presentation) on 26/Jul/2007.

* Stage II Part B (Academic writing) on 26/Jul/2007.

10. Review of the research Undertaken

* Wrote 2 chapters of the thesis (Introduction, Overview and Background about Business Strategy, IT Strategy, and Previous Strategic Alignment Models).

* Completed of first level of data gathering (questionnaires & Interviews).

* Passed the ITIL (Information Technology Infrastructure Library) Foundation Certificate.

* Published two conference papers.

* Presented posters at the ARU 1st & 2nd Annual Research Student Conference

11. Action Plan

The necessary steps for completion of the research are as follows:

1. Type of organizational culture and Information Technology use was investigated by the researcher through questionnaires(phase 1)

2. Interviews with CEO’s and IT managers were conducted in terms of Business strategy and IT strategy existence(phase 1)

3. Data analysis was carried out, which involved performing statistical analysis (SPSS) into the gathered data.

4. Distributing mores questionnaires and conducting further interviews to in order to establish a relationship between Organization Culture and Strategic alignment and show its important effect on the selected Saudi firms

5. All data from the (phase1) and (phase 2) will be combined and linked together to give the base for designing the Strategic Alignment Model.

6. Design the proposed Strategic Alignment Model

7. Writing up of the PhD thesis and preparation for the oral exam.

8. The plan of work also includes writing and submitting papers, attending conferences related to the study and presenting the work.

Gantt chart

The following chart depicts the action plan of the project and the time expectations for each step in details and it is as follows:

Years

2007

2008

2009

2010

Tasks

2

4

6

8

10

12

2

4

6

8

10

12

2

4

6

8

10

12

2

4

6

1

 

2

 

3

4

5

6

7

8

References

[1] David W. Nickles, ” IT-BUSINESS ALIGNMENT: WHAT WE KNOW THAT WE STILL DON’T KNOW”, Proceedings of the 7th Annual Conference of the Southern Association for Information Systems, 2005

[2] Kenneth C. Laudon and Jane P. Laudon, ”Management Information Systems: Managing the Digital Firm”, 9th Edition, Prentice Hall, 2006

[3] McNurlin, B.C., and Spargue, R.S., ”Information Systems Management in Practice”, 6th Edition, Prentice Hall, 2002

[4] Raymond Pap, ”Introduction to Strategic Alignment”, Idea Group Inc, 2001

[5] Yolanda E. Chan,” Why haven’t we mastered Alignment? The importance of the informal organization structure”, MIS Quarterly Excusive, 2002

[6] Allen, D. and Wilson, T., “Vertical trust/mistrust during information strategy formation”, International Journal of Information Management, 2003

[7] Henderson, J.C. and Venkatraman, N., “Aligning business and IT strategies”, in Luftman, J.F. (Ed.), Competing in the Information Age: Strategic Alignment in Practice, Oxford University Press, New York, NY, 1996

[8] Butler, T. and Fitzgerlad, B., “Enterprise Transformation and the Alignment of Business and Information Technology Strategies: Lessons from Practice, 1998

[9] Ruohoueu & Parnisto, Proceedings of the First European Doctoral Seminar on Strategic Information Management, Turku centre for computer Science, 1996

[10] Hatem Tamimi, Ala M. Abu-Samaha & Sufian Yousef ,”Perceptions of Information Technology/Information Systems Value/ Utilisation in Saudi Organisations” Proceedings of the ECIME conference, France, pp 1 – 12, September 20 – 21, 2007

[11] Bassellier, G. and Benbasat, I. (Business Competence of Information Technology Professionals: Conceptual development and influence on IT-business partnerships), MIS Quarterly 28(4): 673-694, 2004.

[13] Baker, E.H. Leading Alignment, CIO Insight 1(45) 19-20, October 15, 2004.

[14] Benbya, H. and McKelvey, B. (2006). Using Coevolutionary and Complexity Theories to Improve IS Alignment: A multi-level approach, Journal of Information Technology 21(4): 284-298

[15] Chan, Y.E., Sabherwal, R. and Thatcher, J.B. Antecedents and Outcomes of Strategic IS Alignment: An Empirical Investigation, IEEE Transactions on Engineering Management 51(3): 27-47, 2006.

[16] Creswell, JW, “Research design: qualitative and quantitative approaches”, Sage, Thousand Oaks, California, 1994

[17] Tashakkori and Teddlie, “Mixed methods in social & behavioral Research”, Sage Publications, Inc, 2002

[18] Denzin and Lincoln, “the Landscape of Qualitative Research”, Sage Publications, Inc, 2003

[19] Walsham, “Interpretive case studies in IS Research: Nature and Method”, European Journal of Information Systems, 1995

Publications

1. Hatem Tamimi, ” The Effect of Organizational Culture on Information Technology/Business Strategic alignment in Saudi Firms”, 1st Annual Research Student Conference, ARU, Cambridge,2006

2. Hatem Tamimi, Ala M. Abu-Samaha & Sufian Yousef ,”Perceptions of Information Technology/Information Systems Value/ Utilisation in Saudi Organisations” Proceedings of the ECIME conference, France, pp 1 – 12, September 20 – 21, 2007

3. Hatem Tamimi, “The status of IS Planning in Saudi Firms”, 2nd Annual Research Student Conference, ARU, Cambridge,2007

4. Hatem Tamimi, “Strategic IS Plans; do they exist in Saudi Firms?”, IACeT’2008,The International Arab Conference on e-Technology, Arab Open University, Amman-Jordan, October 15-16, 2008

Appendix A

The Designed Questionnaire

Survey On Strategic Information System Planning Assessment in Saudi companies.

The objective of this survey is to investigate how Saudi managers use Information Technology (computer-based information, software, database, networks, communication, and other devices) to support their Strategic Planning. Your assistance in providing information regarding how often you use IT systems, the reasons for using these systems, and whether these systems satisfy your informational needs will be greatly appreciated.

This survey is conducted under the direction of Mr Mike Smith, Department of Information Technology, Anglia Ruskin University, Chelmsford, UK. All responses are confidential and will remain anonymous.

The success of this study depends on the completeness and the quality of information you provide. We ask you to be as thorough and free as possible in answering the questions in this.

Thank you for your time and cooperation!

NOTE: Please answer this questionnaire only if you are a user of Information Technology (computer-based information, software, database, networks, communication, and other devices). If you are not a user of Information Technology would you ask a manager in your corporation who is to complete this questionnaire.

I. PERSONAL BACKGROUND

1. Organisation name: 2.Sex (M/F):

3. Age:

4. Education: Please choice highest degree attained

(Please choice one):

A. High school graduate or less B. Baccalaureate Degree

C. Masters Degree D. Doctorate

5. Please indicate (how many) college (University) level courses you have completed in Information Technology (Information Systems, Computer Science, Programming, Networks or Communication).

(Please choice one):

0 1 2 3 4 ≥5

II. PRESENT JOB RESPONSIBILITIES

6. Functional area (Please choice one) :

A. Accounting B. Finance C. Marketing

D. Manufacturing E. Research and Development

F. Personnel G. Corporate Administration

H. Information Systems I. Other (Please specify):

7. A. Management Level (Please choice One):

1. First Line Supervisor or Manager

2. Mid-level Manager (Supervising other managers)

3. Executive (Top) Level Manager (Vice president, President, Chairman of the Board of Directors etc.

B. Job Title:

III. USE OF INFORMATION TECHNOLOGY (PC, Software, Databases, Networks, Internet, and other devices):

8. Managers perform a number of Planning roles. For each of the following roles, please indicate the value of IT. (Please choice a number for each role):

Decision roles

Of Great

Value

Of Moderate Value

No Value At All

Does Not Apply

Choice

A. Capitalist

(Identifies and

initiates changes)

5

4

3

2

1

0

B. Trouble Handler

(Handles important and

unexpected troubles)

5

4

3

2

1

0

C. Resource Allocation

(Approves and allocates

all organisational resources

5

4

3

2

1

0

D. Negotiator

(Represents the organisation

at major negotiations

5

4

3

2

1

0

1. Planning consists of several steps. For each of the following steps, please indicate the value of IT. (Please choice a number for each step) :

Decision steps

Of Great

Value

Of Moderate Value

No Value At All

Choice

A. Identifying problems

or issues

5

4

3

2

1

B. Generating alternative

courses of action

5

4

3

2

1

C. Evaluating the out comes

of each alternative

5

4

3

2

1

D. Ranking the alternatives

and choosing one

5

4

3

2

1

E. Implementing the

chosen alternative

5

4

3

2

1

2. As a Planner you may use both IT-based and non IT-based in decision making. The percent of IT you use for supporting the following Planning tasks is: (Please choice a number)

Decisions

>80%

61% to 80%

41% to 60%

21% to 40%

<20%

None

Choice

A. Long Term (Strategic) Planning

5

4

3

2

1

0

B. Mid-Term (Tactical)

Planning

5

4

3

2

1

0

C. Short Term

(Operational)

Planning

5

4

3

2

1

0

3. Managers have a mental model (i.e., an image, idea, or conceptualization of the organisation) which they use for planning, controlling and operating purposes. How helpful is the Information Technology Systems (IT) you are presently using in forming or revising the mental model of your corporation?

(Please choice a number):

Very Helpful Moderately Not Helpful

Helpful At All

5 4 3 2 1

12. How valuable is the information the existing IT provides to your mental model in guiding your planning, controlling and operating decisions?

(Please choice a number):

Of Great Value Of Moderate Value Of No Value At All

5 4 3 2 1

13. Overall, how important is IT for Planning that are critical to the success and effectiveness of your managerial duties?

(Please choice a number):

Very Important Moderately Important Not Important At All

5 4 3 2 1

Iv. SOURCES AND TOOLS USED TO OBTAIN IT-BASED INFORMATION

14. You obtain the IT-based you use for Planning mainly

(Please choice one):

A. By yourself

B. Through a designated person

C. Through a request to an information systems group

D. Other (Please specify):

15. Please indicate, on the average, how many hours per week you actually use a personal computer (PC) or a terminal to obtain computer-based information which is essential for the performance of your duties.

(Please choice one):

A. >16 hours B. 9 -16 hours C. 5 -8 hours

D. 1 -4 hours E. < 1 hour F. None

16. Please indicate the average number of hours per week use each of the following hardware pieces:

A. I don’t use any hardware pieces. Yes/No?

Hours/week hours

B. 1. Stand-alone personal computer (PC) hours

2. PC or other terminal connected to an internet hours

3. PC or other terminal connected to an “On-line”

distributed computer system hours

4. PC or other terminal connected to a Local Area

Network (LAN) hours

5. Other (Please specify) :

hours

17. Please indi


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