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Abstract

While the importance of IT-business alignment is rarely questioned, a strong theoretical foundation of alignment's nomological network has not been developed or tested. This has generated a debate on why tighter alignment may or may not lead to higher levels of firm performance. To further understand the alignment-performance relationship, we used meta-analytic structural equation modeling techniques to probe the inter-relationships found in 78 independent data sets drawn from the literature. We find intellectual alignment influences operational alignment, identify a more nuanced understanding of the performance constructs, and offer insight into how governance structure and social alignment influence intellectual and operational alignment.

7. Conclusion

Through a review of 30 years of alignment research, we proposed and examined unique relationships between alignment: intellectual and operational; firm performance: customer benefit, productivity, and financial performance; and context constructs: governance structure and social alignment. We found that intellectual alignment influences operational alignment, the alignment types have unique relationships with the different performance types, and social alignment influences intellectual alignment but may not influence operational alignment. This study provides a number of implications for future research. First, researchers should not treat alignment or performance monolithically but need to specify the dimensions of alignment and firm performance examined in the study; failure to do this could obscure important relationships in the understanding of alignment and its impact on firm performance as our research offers a more nuanced configuration of the alignment–performance constructs. Second, dynamic alignment needs to be evaluated empirically, particularly given the ever-changing nature of business. Finally, researchers need to examine the conditions under which social alignment influences the different alignment types because this study shows that social alignment may not influence operational alignment.