Clemson University TigerPrints All Dissertations Dissertations 12-2011 IT-BUSINESS STRATEGIC ALIGNMENT: ESSAYS EXAMINING TYPES OF ALIGNMENT AND THEIR RELATIONSHIP WITH FIRM PERFORMANCE Jennifer Gerow Clemson University, [email protected] Follow this and additional works at:https://tigerprints.clemson.edu/all_dissertations Part of theManagement Sciences and Quantitative Methods Commons Recommended Citation Gerow, Jennifer, "IT-BUSINESS STRATEGIC ALIGNMENT: ESSAYS EXAMINING TYPES OF ALIGNMENT AND THEIR RELATIONSHIP WITH FIRM PERFORMANCE" (2011).All Dissertations. 851. https://tigerprints.clemson.edu/all_dissertations/851 This Dissertation is brought to you for free and open access by the Dissertations at TigerPrints. It has been accepted for inclusion in All Dissertations by an authorized administrator of TigerPrints. For more information, please [email protected]. IT-BUSINESS STRATEGIC ALIGNMENT: ESSAYS EXAMINING TYPES OF ALIGNMENT AND THEIR RELATIONSHIP WITH FIRM PERFORMANCE A Thesis Presented to the Graduate School of Clemson University In Partial Fulfillment of the Requirements for the Degree Doctor of Philosophy Management by Jennifer E. Gerow November 18, 2011 Accepted by: Dr. Varun Grover, Committee Co-Chair Dr. Jason Thatcher, Committee Co-Chair Dr. Richard Klein Dr. Philip Roth ABSTRACT While Information-Technology (IT)-Business Strategic Alignment (hereafter referred to as alignment) continues to be a topic of great concern to both researchers and practitioners alike, it is often misunderstood and, as such, many organizations find alignment difficult to achieve. In particular, alignment is often defined in many different ways, its operational measures are used inconsistently, and it is unclear how it can be attained. In this dissertation, we assert that researchers should include explicit references to the type of alignment under study, that adequate and consistent operational measures of each alignment type are necessary, and that we need a better understanding of the CIO attributes that may facilitate alignment. Each of these points is addressed in three separate essays, as discussed in the following paragraphs. In our first essay, we conducted a review and meta-analysis of the alignment literature to gain a better understanding of the types of alignment that have been examined. In particular, we probed the inter-relationships between alignment, the context, and firm performance. We found distinct relationships between three types of alignment and three measures of firm performance. We also found social alignment is a precursor to alignment within firms. Furthermore, a moderator analysis suggested sampling and measurement are an additional source of conflicting findings in the alignment literature. Through this essay, we contribute to the literature by developing clear definitions of alignment’s dimensions, clarifying the relationship between alignment and types of performance outcomes, and offering insight into sources of inconsistencies ii in alignment research. We believe this first essay offers a basis for more consistent treatment of alignment concepts in future IT research. In our second essay, we report on the development of operational measures designed to capture six different types of alignment. These instruments are intended to be a tool for studying the alignment between IT and business strategies (i.e. intellectual alignment), between IT and business infrastructures and processes (i.e. operational alignment), and across these two domains such that strategies are linked with infrastructures and processes (i.e. 4 types of cross-domain alignment). As such, this essay proposes definitions for each type of alignment and develops operational measures for each construct, each possessing desirable psychometric properties. Finally, we apply the Power-Dependence and Political Perspectives in our third essay to explain the relationship between power, political skill, and the CIO's influence over the executive team's commitment to strategic and technical IT initiatives. Our results suggest structural power (i.e. the CIO's formal position in the firm), expert power (i.e. the CIO's business and technical knowledge), and prestige power (i.e. the important connections the CIO has established) relate to the CIO's influence over the executive team's commitment to IT initiatives. We also found political skill positively moderates the relationship between the CIO's power and influence over the executive team's commitment to IT initiatives. Taken together, our literature review provides conceptual clarity about the nature of alignment. In our construct development essay, we gained operational clarity such that researchers can study the different types of alignment and their relationships with other iii constructs like performance. Finally, our CIO study improves our understanding of the manifestation of alignment through CIO influence on major IT-business initiatives. Key Words: IT-business strategic alignment, alignment paradox, power, political skill iv ACKNOWLEDGEMENTS First, I thank my best friend and Savior, Jesus Christ, for giving me this awesome opportunity to earn a PhD. Without you, I wouldn't have been able to complete this extremely difficult task. You have shown me the true meaning of both grace and power: Your grace is sufficient for me, for Your power is made perfect in weakness (2 Corinthians 12:9). Second, thank you to my husband, Charles Gerow, for his prayers and emotional support. You endured many tears throughout this process, and I am forever grateful to you for standing firm through it all. I couldn't have done this without the support you gave me and the sacrifices you made. Third, I thank my advisors, Dr. Varun Grover and Dr. Jason Thatcher, for reading thousands of pages and providing feedback that made me into a better academic and researcher. Without your dedication to the IS field and your students, this dissertation would not have been possible. I also thank my committee members, Dr. Phil Roth and Dr. Rich Klein, for taking the time to read my dissertation and provide constructive feedback so I could further improve my work. Thank you also to Dr. Russ Purvis for encouraging me to apply for the PhD program; you changed my life. Finally, I thank my family and friends for all your prayers, support, and love. Specifically, a big "Thank You!" to my parents, Dwight and Lori Vicars; my sister, Melissa Vicars; my grandma and uncle, Helen and Bob Kolski; my in-laws, Vick and Stella Messier; and my friends: Kristen Fleming, Cheryl LaGrone, Jason and Andi v Czepiga, Kevin and Maria Kithcart, and Jane Motsinger and all our Bible study groups. I couldn't have done this without you. vi DEDICATION For all his support and love through this process, I dedicate this dissertation to my husband, Charles E. Gerow. You have earned this PhD too. Thank you. vii TABLE OF CONTENTS ABSTRACT ........................................................................................................................ ii ACKNOWLEDGEMENTS ................................................................................................ v DEDICATION .................................................................................................................. vii TABLE OF CONTENTS ................................................................................................. viii LIST OF TABLES ........................................................................................................... xiii LIST OF FIGURES .......................................................................................................... xv PROLOGUE ....................................................................................................................... 1 ESSAY 1 - ABSTRACT ..................................................................................................... 8 INTRODUCTION .............................................................................................................. 9 NARRATIVE REVIEW ................................................................................................... 13 Alignment and Its Dimensions...................................................................................... 13 Defining Firm Performance .......................................................................................... 16 Theoretical Perspectives ............................................................................................... 18 The Contingency Perspective ................................................................................... 19 Resource-Based View of the Firm ............................................................................ 21 A Model of Alignment: Antecedents and Outcomes .................................................... 24 Intellectual Alignment with Firm Performance ........................................................ 24 Operational Alignment with Firm Performance ....................................................... 27 Cross-Domain Alignment with Firm Performance ................................................... 29 Social Alignment ...................................................................................................... 30 Correlates of Alignment ............................................................................................ 32 Methodological Moderators ...................................................................................... 38 META-ANALYSIS .......................................................................................................... 41 Method .......................................................................................................................... 42 Sources of Data ......................................................................................................... 42 Inclusion Criteria ...................................................................................................... 44 Coding Procedure...................................................................................................... 46 Meta-Analytic Approach .......................................................................................... 48 Results ........................................................................................................................... 52 Detailed Explanation of the Columns in the Meta-Analysis Tables ......................... 52 Meta-Analyzed Relationships ................................................................................... 53 viii Moderator Analysis: Intellectual Alignment ............................................................ 56 DISCUSSION ................................................................................................................... 59 Research Question 1: How should we represent or conceptualize alignment? ............ 59 Research Question 2: What is the effect of alignment on firm performance? .............. 62 Research Question 3: Do other factors confound the relationship between alignment and firm performance? ........................................................................................... 63 Research Question 4: Do methodological issues obscure our understanding of the relationship between alignment and firm performance? ........................................ 67 Limitations .................................................................................................................... 71 Implications for Practice ............................................................................................... 71 CONCLUSION ................................................................................................................. 73 ESSAY 2 - ABSTRACT ................................................................................................... 76 INTRODUCTION ............................................................................................................ 77 DEFINING ALIGNMENT ............................................................................................... 81 Intellectual Alignment .................................................................................................. 82 Operational Alignment.................................................................................................. 83 Cross-Domain Alignment ............................................................................................. 85 Using SAM as a Framework ......................................................................................... 87 INSTRUMENT DEVELOPMENT PROCESS ................................................................ 88 Creating the Item Pool .................................................................................................. 89 Q-Sorting Rounds ......................................................................................................... 94 Pre-Test, Purification, and Pilot Test .......................................................................... 102 Pilot Study Reliability, Convergent Validity, and Discriminant Validity Analyses ... 106 Further Instrument Development, Testing, and Purification ...................................... 112 Financial Performance ................................................................................................ 120 Control Variables ........................................................................................................ 121 SURVEY ADMINISTRATION ..................................................................................... 122 Research Design.......................................................................................................... 123 Reliability, Convergent Validity, and Discriminant Validity Analyses ..................... 127 Predictive Validity Analyses....................................................................................... 132 Sobel Test for Mediation ............................................................................................ 140 Control Variable Results ............................................................................................. 141 Assessment of Common Method Bias Threat ............................................................ 141 ix