The impact of IT-business strategic alignment on firm performance in a developing country setting: exploring moderating roles of environmental uncertainty and strategic orientation

Abstract

Aligning information technology (IT) strategy with business strategy has been one of the top concerns of practitioners and scholars for decades. Although numerous studies have documented positive effects of IT-business alignment on organizational performance, our knowledge about this relationship is still limited due to the complexity of contingent factors. The extant literature is largely based on research in the context of developed countries and few studies have explicitly considered the effects of contextual factors such as market environment and competitive strategy on this relationship. In this study, we attempt to fill these gaps by testing the alignment–performance relationship in a developing country setting and investigating the moderating roles of environmental uncertainty and strategic orientation on the performance effects of strategic alignment using survey data collected in Turkey. Our analyses show that this positive effect is statistically significant in highly uncertain environments and varies across performance measures. Our results also show that the strategic alignment between IT and business has a significant impact on performance across all choices of strategic orientation – defender, prospector, or analyzer. Theoretical and practical implications are discussed and future research directions are explored.

Keywords:

• strategic alignment
• IT-business alignment
• environmental uncertainty
• business strategy
• organizational performance

Additional information

Notes on contributors

Ali Alper Yayla

About the authors

Ali Alper Yayla is an assistant professor in the School of Management at Binghamton University-SUNY. He earned his Ph.D. degree in Management Information Systems from Florida Atlantic University. His research interests include IT management and leadership, information security, and technology adoption. His work has been published in several academic journals including Journal of Information Technology, International Journal of Electronic Commerce, and Journal of Managerial Issues.

Qing Hu

Qing Hu is the Union Pacific Professor in Information Systems in the Department of Supply Chain and Information Systems at Iowa State University. He teaches IT management strategy, electronic commerce, and systems development at graduate and undergraduate levels. His research primarily focuses on the impact of IT on organizational strategy, culture, security, and performance. His work has been published in leading academic journals including MIS Quarterly, Information Systems Research, Journal of the AIS, Communications of the ACM, California Management Review, Journal of Management Information Systems, IEEE Transactions on Software Engineering, European Journal of Information Systems, and Information Systems Journal. He currently serves on the Editorial Board of Journal of the Association for Information Systems.