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Prior research argues that alignment between business and information systems (IS) strategies enhances organizational performance. However, factors affecting alignment have received relatively little empirical attention. Moreover, IS strategic alignment is assumed to facilitate the performance of all organizations, regardless of type or business strategy. By using two studies of business firms and academic institutions, this paper: 1) develops and tests a model relating alignment, its antecedents, and its consequences and 2) examines differences in these relationships across organizational types and strategies. Findings indicate that alignment depends on shared domain knowledge and prior IS success, and also support the expected positive impact of alignment on organizational performance. Differences across Prospector, Analyzer, and Defender business strategies are examined. A key research contribution is the empirical demonstration that the importance of alignment, as well as the mechanisms used to attain alignment, vary by business strategy and industry. In past alignment studies, controlling for industry has not been uncommon. The findings suggest that future research studies should also control for business strategy. The article also empirically demonstrates that past implementation success influences alignment. In addition, it highlights the influence of a process variable, strategic planning, on the development of shared knowledge and, consequently, on alignment. This paper examines strategic issues related to the management of technology. Data from multiple surveys are used to test the extent to which strategic planning, shared business-IS knowledge, prior IS success, and other variables consistently enhance IS alignment. The study also provides empirical support for the popular argument that IS alignment improves organizational performance. It extends the current literature by examining the extent to which these findings hold across firm strategies and industries. The authors argue that not all firms are equally well served by allocating scarce resources to improve IS alignment.
Date of Publication: Feb. 2006