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As truly observed by Grembergen and Hanes (2009), the functionality of information technology in business setups has gone through dramatic switches in the last few decades. All over the world, business environments have seen drastic changes as a result of the late 1990's developments in information technology. The bulk of industrial, commercial and government entities have become increasingly dependent on their information technology. As framed in Rockart's language, as indicated by Ward and Peppard (2002, p.1), "information technology has become inextricably intertwined with business". In the present business environment, the use of information technology is pervasive and could lead to extended advantages in competitive situations.
The doubt then crops up as to what position is played by IT in the success of an organizational's strategic objectives and aims. In reply to this, Venkatraman et al. (1993) and Franz and Klepper (1995) suggested that the critical function of IT is very often characterized as a match or in association with the strategic aims of the organization. One of the major worry for business and IT management has been and continues to be IT positioning in line with strategic aims (Galliers, 1993; CSC, 2001). It is very apparent in literature that the function of strategic alignment between IT and business strategies is a vital part of an organization's performance (Brown, 2004; Kearns & Lederer, 2001) and competitive advantage (Grant, 1991). Strategic alignment has proven to enhance organizational efficacy (Chan & Huff, 1993), get the most out of return on investment (Feidler,Gorver&Teg,1995), enable organizations to improve on managing their business needs on the whole, technology, and rivals (Boar&At&T Bell Laboratories,1994) and offer stability in a company (Labovitz&Rosansky,1997). According to Piccoli and Ives (2005), organizations such as Harrah's Entertainment, Wal-Mart and Dell have gained tremendously by aligning their IT strategies accurately with their own business strategies.
Even though strategic alignment has brought many benefits as mentioned above, there are severe challenges confronted in sustaining strategic alignments in business setups in these times. One of the primary challenges confronted by organizations is the adjustments in active and unstable business settings to sustain strategic alignment (Luftman, Papp, and Brier, 1999). Events like price wars, decrease in demand, new product launched by a competitor can change business strategies as expressed by Mendelson and Pillai, (1998). As a result, a more flexible IT or IT that has the ability to meet with business changes is very crucial to sustain strategic alignment in business environments today (Bharadwaj, 2000). Past studies have shown that flexibility in IT is a influencing aspect in sustaining strategic alignment in active and ever changing business settings today )e.g. Tallon, 2009; Ness, 2005; Chung, Rainer, Lewis,2001).
2. IT - Business Strategic Alignment
2.1 Importance of strategic alignment:
The significance of strategic alignment has been stressed in the past decades as stated by Papp (1995). The significance of strategic alignment has been validated since 1980's (McLean and Soden, 1977; Mills, 1986; Parker and Benson, 1988; Brancheau and Wetherbe, 1987; Venkatraman, 1989; Dixon and John, 1991; Niederman, et. al., 1991; Earl, 1993; Henderson and Venkatraman, 1993). Likewise, many academicians place strategic alignment as one of the key aspect confronted by managers (Luftman, 1996; Croteau, Bergeron & Raymond, 2001; Nickerson & al., 2003, Kalika & Kefi, 2003 etc.) Studies in the past also implied that realising IT business strategic alignment in an organization has been seen as one of the main concerns in IS management for the past decades (Brancheau and Wetherbe, 1987;Niederman et al., 1991).
On the whole, strategic alignment has enhanced performance (Bergeron, et al. 2004; Chan, et al. 1997; Croteau, et al. 2001; Kearns and Sabherwal 2007; Oh and Pinsonneault 2007; Zahra and Covin 1993) and in specific improved performances in finances, market growth, image or standing of a company, innovation in product service (Chan et al., 1997), growth of profits and income (Croteau and Bergeron, 2001), and the reduction of costs (Oh and Pinsonneault, 2007). In a newer study, Tallon (2008) established that strategic alignment is encouragingly connected to IT business worth.
Furthermore, many studies have also suggested the importance of strategic alignment which is due to several reasons. Firstly, strategic alignment ensures vital areas for successful business performance are focussed upon via information systems (Das, Zahra, and Warkentin, 1991). Secondly, it is valuable in enhancing the understanding of top executives of the importance of IS, and simultaneously, improving the understanding of IS managers of business goals (Newkirk and Lederer, 2006a). Apart from that, strategic alignment is also successful in making sure information Strategic Planning (ISP) is in conjunction with Business Planning (BP) activities in order for IS operations to back business strategies better and participate in business value accomplishment (Teo and King, 1996). In another study (Bowman, Davis, and Wetherbe, 1983), strategic alignment can successfully speed up acquirement and strategic placement of IT that is in harmony with the competitive needs of the establishment as oppose to the current practice trends in the establishment.
Strategic alignment has also been effective in uplifting the position of IS in an organization and as a result, speed up the financial and managerial backing that is necessary for successful execution of pioneering systems (Das, Zahra, and Warkentin, 1991; Henderson, Rockart, and Sifonis, 1987). Not only that, strategic alignment has a strong influence over getting the most out of profits from IT related ventures, attaining an upper hand in competitive environment via IS and providing path ways and flexibility to exploit new prospects (Avison et al., 2004).
It is revealed from all the above mentioned studies that strategic alignment brings forth advantages because of its influence over several key business conducts, such as in achieving a competitive standing, enforcing encouraging outcome in an organization's performance, offering highest profits from IT ventures, rivalling in a variety of markets, backing business strategies and playing a role in business value accomplishments, ensuing better functioning of an organization, bringing in flexibility in reaction to new business prospects. All in all, aligning IT and business strategies offer companies the ability to utilise their IT capital to back their business strategy, hence leading companies to achieve higher levels of success.
2.2. Definitions of strategic alignment:
Various terms are often used synonymously to describe alignment, namely, "bridge" (Ciborra, 1997), "congruence" (Karimi, Gupta, and Somers, 1996; Scott, 2005), "consistency" (Henderson and Sifonis, 1988), "coordination" (Lederer and Mendelow, 1989), "fit" (Henderson and Venkatraman, 1993), "fusion" (Keen, 1993; Papp, 1998; Smaczny, 2001), "harmony" (Luftman, 2000; Luftman, Papp, and Brier, 1999), "integration" (Teo and King, 1997a, 1997b), "linkage" (Goldsmith, 1991; Reich and Benbasat, 1996), and "match" (Leifer, 1988).
Further, a variety of conceptualizations and explanation applied in the literature to describe the alignment concept of business and IT strategy are discussed.
The extent to which the mission, objectives and plans of information technology support and are supported by the business mission, objectives and plans is discussed (King, 1978; Reich and Benbasat, 1996, 2000). The fit between IT and business structures is defined by Jarvenpaa and Ives, 1993. The fit between IS strategic orientation and business strategic orientation in IS strategic alignment is explained (Chan et al., 1997). Application of information technology in a suitable and opportune manner that is in agreement with the strategies, aims and requirements regarding business IT alignment ( Luftman, 2000; Luftman and Brier, 1999; Luftman, Papp, and Brier, 1999). The fit between four areas, namely business strategy, IT strategy, organizational infrastructure and processes, and IS infrastructure and processes in strategic alignment is stated (Henderson and Venkatraman, 1993; Luftman, Lewis, and Oldach, 1993)
In relation to strategic IS management profile, four variety of alignment have been specified (Bergeron, Raymond and Rivard, 2004). The first alignment is strategic alignment that refers to alignment between IS strategy and business strategy. Secondly is the structural alignment that refers to alignment between IS structure and business structure. Next is the business alignment which refers to alignment between business structure and business strategy. The forth alignment is IS alignment which refers to alignment between IS structure and IS strategy. In addition, two varieties of cross-dimensional alignment is discussed which refers to alignment between IS strategy and business structure, and alignment between business strategy and IS structure.
The two components of IS alignment is explained (Chan, 2002). Firstly, is the strategic alignment which refers to the fit between the precedence and conducts of the IS role and those of the business unit. Secondly, is the structural alignment which refers to the level of structural fit between IS and the business, particularly in the fields of IS decision-making rights, reporting relationships, (de)centralization of IS services and infrastructure, and the deployment of IS employees. The fit between an organization and its strategy, structure, processes, technology, and environment is discussed (Kanellis, Lycett, and Paul, 1999).
Basically, strategic alignment from all the literature is defined alike, which is to engineer or design IT in a way as to support business strategy. Organizational objectives and activities at each level are shored up by the IS function to get business value from IT and to take the enhanced advantage of IT for the purpose of strategic endorsement. This is the inference drawn from all the above mentioned definitions.
2.3 Prominent Strategic Alignment Researches and Theories
2.3.1 Henderson and Venkatraman's Research
In 1991the first strategic alignment specific model was introduced by Henderson and Venkatraman. This strategic alignment specific model introduced in the early 1990's replaced the legacy linkage model of IT planning, the Strategic Alignment Model (SAM). Contrasting earlier models (Weill and Broadbent, 1993), SAM needs a strategic management processes that is extremely integrated. SAM considers that the previous models did not address the issues of inter-relationship between Information technology strategy and strategies of the business establishments. 'Strategic fit" and "functional integration" is a two dimensional relationship of Information Technology and Business strategies. (Henderson and Venkatraman, 1991). This is indeed the foundation for the SAM model.
Strategic fit as defined by Smaczny (2001) is the intrinsically dynamic ability to make crucial decisions about the organization's position in the market. This positioning is affected by a environmental aggressive and competitive environment conditions. These conditions are "internal and external". The strategic fit could be identical with the economic performance of the establishment when compared with its competitors.
In addition functional incorporation is defined as groups of distinct tasks enabling business establishments to align their functional and operational strategies. It also enables them to align their structure and processes within all units with appropriate thought for all "environment variables". (Smaczny, 2001).
The Strategic Alignment Model by Strategy as defined by Henderson and Venkataraman (2001) in their alignment model is a formulation and execution of a set of guidelines that enable the establishment to successfully function in an environment that is competitive. IT Strategy is also defined as the sets of concerning choices that enable the corporate establishment in the global market. These choices are defined as "Technology Scope" (p.6). It defines and summarizes the range, and the different types of Information Technology activities which are crucial to the operation of the core business. The notion of "Systemic Competencies" which explains the vital requirements that maintain and develop the formation or extension of business strategy. Lastly, the "information Technology Governance" that determines the ownership and by and large the management of the technology within the organization. (Henderson and Venkataraman, 1991) .
Henderson and Venkataraman (1999) introduced four fundamental domains of the Strategic Alignment to define a realistic model. The domains are Business Strategy, Information Technology Strategy, Organizational infrastructure and processes and lastly Information technology infrastructure and processes. Out of these four fundamental domains Business Strategy and Information Technology Strategy are classified as External domains whereas Organizational Infrastructure & Processes and the Information Technology Infrastructure & Processes are classified as Internal domains. The Business Strategy and the Organizational Infrastructure & Processes domain are distinguished as Business domains while Information Technology Strategy and Information Technology Infrastructure & Processes are distinguished as Information domains.
There are four different perspectives suggested by The Henderson and Venkataraman (1999) model. These are classified as strategy execution alignment, technology transformation alignment, competitive potential alignment, and service level alignment.(see Figure 5). The purpose of their alignment is defined by the authors as a means to express and highlight one of the four proposed outlooks throughout the organization maturity evolution.
Figure 5. Henderson and Venkatraman's Strategic Alignment Model (SAM).
The SAM model seems to be a detailed and well defined model; however there is a fundamental and underlying defect with the suggested model. As the complete model is based on the hypothesis that the organization essentially poses a "mechanistic" and formalized nature (Smaczny, 2001). Such underlying supposition cultivates the formulation of chronological behaviour for forming strategy development. As a result of this there is a incredible amount of synchronization overhead initiated and this in turn hampers the flexibility and responsiveness of the model. The suggested "Incubation", "Configuration", and "implementation" related factors could be re-categorized under SAM's quad fundamental domains. But even if these factors are re-categorized, the co-relation and interaction among proposed factors break the limits and mechanistic personality of the Henderson and Venkatraman's (1991) SAM model.
2.3.2 Weill and Broadbent's Research
The focus of the research done by Weill and Broadbent (1993) is on alignment in the banking industry. There was a specific concern with the financial return on investment (ROI). The SAM Model lacked the granularity and responsiveness especially in regards to dealing with the speed of the business environment in the financial industry. The authors therefore wanted to enhance the SAM model (Henderson and Venkatraman, 1991. They were worried with the technology infrastructure and the backing provided to the vital business strategy as a result of such investments. The authors in this model (see Figure 7), based their working model on four significant fields. These are a firm-wide strategy formulation processes, organizational structure and accountabilities, I/S responsibilities and policies and finally the Technology Strategy.
The Weill and Broadbent (1993) alignment model (see figure 6) is categorized by Smaczny (2001) as a further improvement to the Henderson and Venkataraman's Strategic Alignment Model. The suggested model similar to the earlier predecessor model "SAM" has a sequential and cyclical nature restrained within two concepts of strategic fit and functional integration (Ciborra, 1996). Such organizational view when adapted, forces the supposition that the executives and management utilize predefined, prepared and plan oriented processes and approaches faultlessly. This is done in order to accomplish organizational goals and objectives (Keen, 1991). Accurate implementation of their proposed model maximises the possible opportunities for alignment of information technology strategy with business strategy as claimed by Weill and Broadbent. Eventually, such development of information technology strategy may lead to firm technological decisions. The growth of current and the extension of future business activities is potentially enthused by these technological decisions. (Broadbent and Weill,1993).
A firm - wide strategy Technology
formation processes Strategy
organizational structure I/S responsibilities
and accountabilities and polices
Figure 6. Weill and Broadbent alignment model.
2.3.3 Sauer and Yetton's Research
There was a lack of responsiveness and flexibility in the SAM model. This lack of responsiveness and flexibility of SAM in the real world organizational implementation was realized by other researchers like Sauer and Yetton (1997). In order to address this fundamental issue, an alignment model was introduced by Sauer and Yetton (see figure 7). They introduced a lead-lag and cyclical interactions into SAM model . Henderson and Venkataraman in 1991 originally introduced them. This fundamental improvement to the SAM model is an effort to make the SAM concept a realistic model. By the implementation of this system, IT organizations' growth expansion rate hardly ever exceed the expansion rate of the organization as the whole (Smaczny, 2000). This was the authors way of thinking for the introduction of the lead-lag model. Information Technology (Lead) expansion and growth is caused by the lack of harmonization between these two concepts. However this does not match the enterprise level organization (Lag) transformation and growth. According to the authors, in order to benefit from the latest state-of-art technologies, the companies time and again "fly through" the growth process. This happens without any noteworthy systematic growth in resources and infrastructure (Sauer and Yetton, 1997).
The alignment framework in this model is apparent and is based on an "either-or" model of strategy implementation and execution. The organizational cycles swap between lead and lag segments. This is based on a cyclical model. Sauer and Yetton define the reasoning behind the cycles as the need for mechanism such as Roger's (1995) dissemination of innovation to address constant changes in the business and information technology strategies and bringing together such changes. A method for understanding how change takes place within an organization is offered by such model. (Encyclopedia of Health & Behavior Management, 2004).
Figure 7. Sauer and Yetton's Lead-Lag concept.
The initial SAM is improvised by the Sauer and Yetton (1997) model by the initiation of a more cyclical method. However the question of the synchronization latency and overhead is not notably tackled in this method. These researchers introduced "Lead-Lag" to improvise the flexibility and receptiveness of the model. However the suggested model is confronted by the constant changes between lead and lad parts. The applicability and practicality of the suggested model is obstructed as a result of the strategic synchronization formed.
The Sauer and Yetton's Lead-Lag Concept is essentially established from the classic SAM alignment model. Because of this, rigidity is inherited by the same model from its antecedent. The synchronic dynamic of the suggested "Incubation", "Configuration", and "Implementation" related factors with the need for parallel spontaneity do not fit the complicated character of this model.
2.3.4 Keen's and Smaczny's Researches
In the 1990's, the notion of fusion was established by Keen (1993) in formation with the introduction of the SAM model by Henderson and Venkatraman (1991). The Keen's Fusion Map model identified the necessity for integration of strategic planning all the way through the organization. This was contrasting other Strategic Alignment models that develop upon the SAM (Weill and Broadbent, 1993 and Sauer and Yetton, 1997). In an effort to deal with the practical inadequacies of the SAM based model, Smaczny re-introduced the notion of the fusion alignment model later in 2001. Keen (1993) and subsequently Smaczny (2001) chose a name for this concept. The name was interesting and suitable as it precisely explains the nature of the model. The word alignment is defined by Merriam-Webster (2005) as "a merging of diverse, distinct, or separate elements into a unified whole". Formation of a unified, integrated and dynamic master strategy is the chief goal of this model, according to the Smaczny. Also, this strategy acts in response to changes in the internal and external environment and economic situations and circumstances. A hybrid strategy with strong, yet flexible joints is envisioned by the author. Also, a strategy that could endure the constant changes and the variation in the business environment (Smaczny 2001). On the other hand, the Fusion model is defined by Keen (1993) as a road map for organizations to move from compartmentalization to migration and finally to fusion all strategies within an organization (Keen, 1993).
Connecting business objectives to information technology objectives is the crucial step in the alignment process as stated by Keen (1993). Keen introduces the idea of fusion ("The ultimate linkage") to address this vital step (Keen, 1993). According to this model, a business strategy develops when the information technology develops. Information Technology linked ideas might lead to improvement of the current business practices, marketing campaign or even opening up new business opportunities, as both tactics intermingle. A creation of new services and tools might be sparked with the exposure of information technology executive managers to the core business related issues. This could eventually improve capacity and the agility of the organization (Smaczny, 2001).
Smaczny (2001) states that with the help of the fusion model (see figure 8) the organizations are in a position to discover, analyze, evaluate and address both internal and external issues at a time when the business strategy is being crafted. In such settings the Information Technology organization is considered as the integral part of the enterprise and fit in as an integrated "Organic being" (Smaczny, 2001). The concept of inclusion is not a new strategic concept. One should handle Information Technology or Information System organization like any other division of the organization. Its needs, direction, and activities should be dealt with, like any other enterprise functions such as marketing functions, human resources functions, sales function, etc. Information Technology has advanced from a remote element to the core and focus of business and social activities (Keen 1993), as argued by Keen (1993). All the crucial functions, needs and direction of sub business units (Smaczny, 2001) are dealt with, by the model's single thorough strategy. The necessity for further alignment activities is eliminated in theory, as there are no distinct occurrences and differences of strategy plans in the organization.
Figure 8. Smaczny Fusion model.
The Fusion Map Model (Keen, 1993) and Fusion Model (Smaczny, 2001) promotes the necessity for the incorporation of business strategy with Information Technology strategy. Organizations can dynamically respond to the changes in the internal and external business, competitive, economical, and operational conditions (Smaczny, 2001) through such incorporation. The idea of the strategic fusion presents the likely and reasonable outcomes for the probable issues related to strategic alignment, even though there is no claim of the ultimate dominance of this method. The concept of Strategic Fusion is in parallel and harmony with the union of the suggested "Incubation", "Configuration", and "implementation" related factors. This is unlike the other proposed models.
2.4 Alignment Research
Studies in the field of strategic alignment can be divided into two areas. The first area highlights the ability of the alignment to forecast organizational functioning, which a majority of the study focuses on this area. The second area studies the dominating aspects for sustaining strategic alignment. These two areas will be discusses in this section.
2.4.1 IT-business Strategic Alignment and Organizational Performance
One of the main concerns that have been thought of in the Information System (IS) management for the past decades has been in accomplishing IT-business strategic alignment in the organization (Brancheau and Wetherbe, 1987; King, 1978; Niederman et al, 1991). When IT and business strategies are aligned well, it will allow organizations to utilise their IT capital to back their business strategy. This leads organizations to achieve higher levels of success. Many studies in the IS literature has stressed upon this performance outcome of the alignment in IT and business (Table 1). This body of literature has debated theoretically and experimentally (Bergeron et al. 2004; Chan et al., 1997; Palmer and Marcus, 2000; Teo and King, 1999) for the boosting effect of alignment on the performance of an organization. Organizations that utilise a high amount of their funds on developing IT capabilities that in return offer strategic benefits to the organizations have been noted (Sabherwal and Kirs, 1994). The team had examine the alignment between organization's vital success factors and their IT means and have found an encouraging effect of alignment on performance.
Chan et al. (1997) developed a strategic alignment instrument by refining Venkatraman's (1989) strategic orientation of business enterprise - STROBE - measure. This was inspired by the complexity of insight and quantifies strategic alignment. The means engaged by business-units to attain business goals (Venkatraman, 1989) are captured by STROBE. The eight dimensions that it composes are aggressiveness, analysis, internal defensiveness, external defensiveness, futurity, proactiveness, risk aversion and innovativeness. Chan et al. (1997) designed the strategic orientation of the existing portfolio of information systems application - STROEPIS - measure, so as to calculate the strategic alignment. This captures the same eight dimensions. They stated that IS strategic alignment has positive outcomes on innovation and market growth, and negative effects on standing and financial performance, using the product of STROEPIS and STROBE pointers as a proxy to alignment.
Likewise, the alignment between business and IS strategies using STROEPIS and STROBE was also examined by Sabherwal and Chan (2001). They extended Chan et al.'s sample with an additional set of survey. They also analyzed the outcome of strategic alignment on perceived business performance. Miles and Snow's (1978) typology of defender, prospector and analyzer was used as ideal business strategies, and identified an ideal IS strategy for each business strategy. IS for efficiency, IS for flexibility, and IS for comprehensiveness are the model IS strategies that they have identified. They pit forward that organizations would have elevated levels of alignment when their IS strategy is at close proximity to the ideal IS strategy implied by the organization's business strategy. The findings of the study provided further support for the positive effects of the strategic alignment on business performance.
Palmer and Markus (2000) with a similar method conceptualized strategic alignment as the match between business strategy (i.e., supplier focus, internal focus, and customer focus) and IT strategy (i.e., supplier partnership, transaction efficiency, and customer detail. They stated that organizations tend to select an IT strategy that is coherent with their business strategy, even though they couldn't find statistical support for the performance effects of alignment. Similarly, Cragg et al. (2002) identified nine business strategies and their respective IT strategies for small firms, and examined the effect of alignment on performance. Even though they haven't hypothesized a causal path, their outcome showed that organizations with high levels of alignment perform better than firms with low levels of alignment.
Croteau and Raymond (2004) examined the alignment of strategic competencies (i.e., shared vision, cooperation, empowerment, and innovation) of businesses to their IT competencies (i.e., connectivity, flexibility, and technological scanning). This was scrutinized corresponding to the alignment of IT and business strategies. Their outcomes established that competencies alignment had positive effects on business performance, signifying that both IT and business competencies have to be taken into consideration throughout the strategy formulation, planning and implementation process.
The positive relationship between alignment and organizational accomplishment was established by Chan et al. (2006). This is conceptualized as the aggregation of many performance methods including status, prestige, new product frequency, and product quality. More interestingly, they showed that alignment has a positive effect on performance only for organizations with prospector and analyzer strategic orientations. Furthermore, Kearns and Sabherwal (2007) suggested and found empirical evidence for the positive outcome of alignment on the quality of IT project planning, and the negative outcome on the execution problems in IT projects.
Although Palmer and Markus (2000) detailed that the strategically aligned organizations do not outperform misaligned firms, this discovery can hardly be generalized as the authors' explored only one specific technology within one industry. On the whole, studies in the alignment literature have come together on the positive effect of strategic alignment on organization's success. However, Bergeron et al. (2004) made a note that the fit between IT and business strategy leads to better business performance only if establishments have already acquired a minimum level of structural alignment and cross-level alignment, underlining the importance of other types of alignment modes.
Table 2: Select studies that investigate strategic alignment
Henderson & Venkatraman,
Chan & Huff, 1993
Awareness (IT understands bus.)
244 US academic institutions
IT Management Sophistication
Chan et al.,
164 US firms
Interviews Written Documents
3 Canadian insurance
firms (10 separate business units)
"Choices of actor, timing, decision
making, and communication used"
during IT and business planning
Luftman et al.,
Descriptive of survey data analysis
Over 500 US firms
Senior Executive Support
IT involved in Strategy Develop.
IT understands the business
Well-prioritized IT projects
IT demonstrates leadership
(Financial measures of US firms)
Palmer &Marcus, 2000
t-test Multiple regression
80 US specialty retailer firms
Reich &Benbasat, 2000
Interviews Written Documents
3 Canadian insurance
firms(10 separate business units)
Shared Domain Knowledge
Successful IT History
164 US firms
62 Canadian firms
5 US firms
3 Canadian firms
Communication & Understanding
Linked IS & bus. plans/planning
Bus. Exec. Commitment to IS
256 small UK
Hussin, King & Cragg, 2002
256 UK small
CEO commitment to IT
External IT expertise
Croteau & Raymond, 2004
104 Canadian firms
Hu & Huang, 2006
1 US firm
Shared Domain Knowledge
Successful IT History
Chan et al., 2006
164 US firms
62 Canadian firms
244 US academic Inst.
Shared Domain Knowledge
Prior IT Success
Kearns& Sabherwal, 2007
269 US firms
IT managers' participation in
Business managers' participation in
2.4.2. Influencing factors to maintain strategic alignment.
Academics and practitioners (Hussin, King & Cragg, 2005) over the years have tried to recognize, measure and discover inter-relationship of the enabler and inhibitor (Luftman and Brier, 2005) factors that cause the strategic alignment in establishments. The joint results of the efforts however were rather disharmonious and, in some cases, contradictory (Sauer and Yetton, 1997; Smaczny, 2001). As one might foresee, there is no standard or uniformity concerning the choice of the important contributing aspects. On the other hand, in majority of the cases, there are some contradictions. The separation can be rooted from the irregularities in the purpose and focal of each study. From the time strategic alignment is analyzed from different outlooks, there are many factors or elements found by different researchers as a contributing factor to the strategic alignment process (Hussin, King & Cragg, 2005). Each researcher views the subject of strategic alignment from distinct philosophical and organizational point of views. Such view differentiations leads to diversity in suggested theoretical models and consequent solution. There are both internal and external (Lang and Coltham, 2005) factors influencing the strategic alignment process.
1. Communication between business and IT executives.
The significance of relationship management is emphasized by research on strategic alignment. Generally, the connection between business and IT strategy can be seen as social and intellectual linkages. The social linkage concerns the actors of the alignment process whereas; the intellectual linkage concerns the content of plans and planning tactics. Social linkage is defined by Reich and Benbasat (1996, p. 58) as "the state in which IT and business executives within an organizational unit understand and are committed to the business and IT mission, objectives, and plans". Galbraith
Reich and Benbasat (2000) used Galbraith (1977) typology of six techniques to measure the ways in which IT and business executives communicate witheach other. They include direct communication through regular or ad hoc meetings, electronic mail or written memos; a named person serving as a liaison officer; temporary task forces such as IT project team; permanent teams such as IT steering committee; promoting IT personnel to lead a business quality unit; and managerial linking roles. They found the level of formal communication between business and IT executives exerted a positive influence on short-term alignment. Further, Clark and Fujimoto (1987) suggested that successful linkage depends on direct liaisons and personal linkages across business and IT functional units. Broadbent and Weill (1993) also draw a similar conclusion that the linkages between ITpersonnel and business units predicted the success of a bank. Luftman and Brier (1999) found in their study that the relationship between IT and a non-IT person significantly contributed to alignment. Besides formal structures, Chan (2002) argued that informal structures can be far more important than formal structures, and affect the prospects of long-term alignment. Cohen and Levinthal (1990) argued that both intellectual and social linkages are vital in enhancing the absorptive capacity of a firm to recognize and assimilate the value of new information, and notably to enable appropriation. However, unilateral fit can be damaging, specifically, in the case of IT project escalation, the so-called mum effect when IT executives fail to communicate the problems to business executives (Keil and Robey 2001). In sum, bilateral communication between business and IT executives through formal and informal channels will greatly enhance both the prospects of short and long term alignment.