How does business-IT strategic alignment dimension impact on organizational performance measures: conjecture and empirical analysis

Abstract

Purpose – Despite the conceptual, empirical and theoretical advances in alignment–performance relationship, there is a limited research on the alignment dimensions and organizational performance measures. Though strategic alignment is believed to improve organizational performance, the purpose of this paper is to develop conjectures for understanding how different alignment dimensions influence organizational performance measures.

Design/methodology/approach – The data were acquired from 161 senior IT and business managers paired responses in China and were analyzed by using a structural equation modeling technique.

Findings – The hypothesized relationships are largely supported. Thus, quality-oriented strategic alignment dimension has a significant relationship with all performance measures. Contrary to expectations, both product and marketing-oriented strategic alignment dimensions do not show a significant impact on financial return. The marketing-oriented strategic alignment dimension also has an insignificant relationship with operational excellence.

Practical implications – This study suggests that the business–IT alignment can be dimensioned to better combine business strategy and IT strategy. Hence, managers can focus specific alignment dimension instead of entire strategies of a firm for a better decision making.

Originality/value – Findings suggest guidance for formulating combined business and IT strategicalignment into dimensions and proposing insightful and practical implications.