(03) Unraveling the Alignment Paradox: How Does Business— IT Alignment Shape Organizational Agility? Flashcards
Based on survey data from 429 dyads of business and IT executives, what was uncovered?
- that intellectual alignment impedes agility by increasing organizational inertia
- social alignment facilitates agility by enhancing emergent business–IT coordination
- social alignment weakens the effect of intellectual alignment on organizational inertia
What does Business–information technology (IT) alignment reflects?
The degree of fit and integration among business strategy, IT strategy, business infrastructure, and
IT infrastructure.
What does “agility” reflects?
A firm wide capability to sense and respond effectively to market opportunities and threats, is a central mediator between IT alignment and firm performance
The reason for writing the article is that there is an so called “alignment paradox” witihin the existing literature. Explain what this “alignment” paradox means.
+ Most prior research asserts that IT alignment has a positive effect on firm performance.
The reason for writing the article is that there is an so called “alignment paradox” witihin the existing literature. Explain what this “alignment” paradox means.
+ Most prior research asserts that IT alignment has a positive effect on firm performance.
The reason for writing the article is that there is an so called “alignment paradox” witihin the existing literature. Explain what this “alignment” paradox means.
+ Most prior research asserts that IT alignment has a positive effect on firm performance.
V.S.
- Increased IT alignment in some firms is associated with no or reduced performance.
Explanation: Scholars argue that alignment could lead to a rigidity trap such that firms suffer from declined strategic flexibility and an inability to quickly respond to changing market conditions.
Within IS research, researchers have proposed two major ways to dimensionalize IT alignment. State both two dimensions and explain them.
- Intellectual alignment. (Explicit)
Intellectual alignment refers to the state in which a set of inter related IT and business strategies exists. Intellectual alignment suggests that the methodologies for formulating and implementing strategies determine the degree to which IT and business missions, objectives, and strategies are internally consistent and externally valid. - Social alignment. (Tacit)
Social alignment is the state in which business and IT executives mutually understand and are jointly committed to each other’s mission, objectives, and plans. Social alignment considers how factors such as characteristics of actors, decision
making, and communication used in strategy formulation and implementation lead to a mutual understanding of these strategies.
Organizational inertia refers to:
Organizational inertia refers to firms’ tendency to maintain stability of their organizational arrangements such as strategy and structure in spite of environmental change.
Emergent coordination refers to:
The contextualized process of input regulation and interaction articulation to realize a collective performance based on informal communication and mechanisms
Gilbert (2005) suggests that inertia consists of two aspects. State the aspects and explain them.
- resource rigidity (resource dependency, resource bundling, sunk costs)
Resource rigidity is concerned with failure to change resource investment patterns. - routine rigidity (path dependence, cognitive inertia)
Routine rigidity refers to failure to change organizational processes and business models that use those
resource.
Coordination refers to:
“a temporally unfolding and contextualized process of input regulation and interaction articulation to realize a collective performance”
coordination research suggests that:
that as environment volatility and task uncertainty increase (+), formal mechanisms often fail to account for what actually occurs in organizations (-), and coordination is more reliant on informal mechanisms (+)
At a high level of social alignment, shared language, shared knowledge, and shared understanding between business and IT executives can abolish obstacles, reduce costs, and create opportunities for emergent coordination. Explain how shared knowledge, language and understanding does this.
- First, shared language helps to remove the communication barrier between business and IT executives. By standardizing the language between business and IT executives, social alignment can eliminate language barriers that might cause confusion and delay or impede coordination.
- Second, shared knowledge enables IT and business executives to understand, appreciate, and contribute to each other’s key processes. It can help business executives realize the importance of IT and let IT executives learn more about the business requirements, which is helpful to minimize conflicts and reduce the cost of business–IT coordination.
- Third, with shared understanding, business and IT executives have a common view about the role of IT within the organization. It creates opportunities for executives to communicate with each other to solve emergent problems by mobilizing resources between business and IT functions.
What insights does the study provide for management and IT practitioners concerned with IT alignment and agility?
- The different mechanisms of IT alignment impacting on agility suggest that firms should carefully implement IT alignment to achieve value creation.
- Firms should foster informal mechanisms to enable CIOs and other executives to coordinate with each other.
- Although we find that intellectual alignment leads to inertia, it is possibly due to our research context. As discussed earlier, intellectual alignment’s effect could vary temporally: it is negative when it is based on the outdated business strategy facing environmental change, and positive when it is based on the updated business strategy that fits the current environment.
We recommend firms value both intellectual and social alignment and find a balance between the two so that the benefits of aligned business and IT strategies are reaped without loss of agility. It is desirable to adopt a dynamic strategic decision-making approach (Smith 2014) that accepts the existence of paradoxes
