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THE IMPACT OF STRATEGIC ALIGNMENT ON
ORGANISATIONAL PERFORMANCE

Muneera M. Al Khalifa
Phd Researcher, Brunel Business School
Uxbridge Campus, Kingston Ln,
Uxbridge, Middlesex UB8 3PH, United Kingdom
Muneera.Al-Khalifa@brunel.ac.uk

Prof. Amir M. Sharif

Brunel University, Business School

Prof. Wajeeh El Ali

Ahlia University, Business School
 THE IMPACT OF STRATEGIC ALIGNMENT ON
ORGANISATIONAL PERFORMANCE

ABSTRACT

Technology today is a key component in resolving a range of strategic issues;

organisations are becoming increasingly dependent on Information Technology to
improve their performance. In order to make the most of the available technology, the
continuing need to integrate Information Technology strategies with business strategies
remains evident. As illustrated from the extant literature, Strategic Planning and
Information Technology appear to present positive correlations with improved
performance of organisations. Whilst there has been a range of research that has
attempted to apply concepts such as Strategic Alignment, it remains that there are very
few empirical findings centred on the overall effectiveness and usefulness of this
approach. The main objective of this study is to review and identify gaps in the
literature, and accordingly demonstrate the need for further studies in the field.

Keywords: Strategic Alignment, Strategic Planning, Business Strategies, Information

Technology Strategies, Organisational Performance.

WORD COUNT 5307

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 1. INTRODUCTION

The alignmnent of IT with the business goals of an organisation is considered a

highly important topic. Researchers have discussed tools, methods and approaches for
measuring and assessing this importance and value based on the fact that Information
Technology has not lived up to organisations’ expectations of enhancing performance
and competitiveness, despite the fact that it is widely acknowledged as an increasingly
powerful tool for improving the delivery of private and public services, as well as
enhancing an organisation’s overall global reach and opportunities (Martinez and
Williams, 2010). The value of IT is difficult to explain on a balance sheet due to its
interweaving nature (Irani, 2002; Luftman, Derkson, 2012). Xue et al. (2012) have found that
organisational efficiency is achieved once concentration is directed towards either cost
efficiency or innovation through IT—but not both.
Similar to strategic planning, Information Technology planning can help
organisations in the creative adoption of IT in numerous ways: rationalising its
investment; controlling expenditure; protecting existing IT investments; resolving
conflicting demands for limited IT resources; obtaining joint IT management/user
commitment; and avoiding ad-hoc ICT projects (Brady et al., 2008; Martinez and
Williams, 2010; Thompson and Teo, 2004; Wild and MnCube, 1996). As such,
researchers suggest that organisations that actively align their business and Information
Technology strategies witness positive impacts in terms of IT effectiveness (Ciborra,
1997; Galliers, 1991; Porter, 1987), resulting in an enhanced business performance
(Cragg et al., 2002). However, ambiguity still exists in regard to the nature and
characteristics of alignment, linkage and integration and it still one of the main issues
faces organisations(Chan and Reich, 2007; Luftman and Ben-Zvi, 2011). Studies in this
area have not yet provided sufficient research on the factors affecting business–IT
alignment. Farrell (2003) points out that there are several culturally specific antecedents
to alignment that need to be examined (Burn, 1997; Chan et al., 2006; Hsaio and
Ormerod, 1998).
Focusing on the organisational performance of public organisations, this
research introduces new key indicators for the measurement of the impact of strategic
alignment on organisations. Since the remit of public organisations often covers a
number of diverse fields, such as the development of public policy, the deliverance of
public services, the maintenance of social security, and law and order (Davies et al.,
2007), the performance of public organisations is linked to how well benefits or public
values are delivered in political, social and economic spheres, and can be measured
depending on the degree to which the organisation’s mission and goals have been
achieved (Sorrentino, 2004). Hence, organisations need to enhance the delivery of
services to the public and accordingly develop internal processes through the
development of its resources, such as human, organisational, informational,
technological and financial (Ojo et al., 2009); this will go some way to achieving
enhanced performance.
During recent times, many organisations have depended on strategic values in
order to develop services and Information Technology, which is classified as one of the
major strategic resources in a modern organisation (Elbanna, 2008). However, the
failure of IT investment is one of the main problems facing both public and private
entities. Failure can be linked to many factors—one of the main ones being the lack of
clarity concerning the goals and benefits expected from this type of investment,
especially within public organisations’ IT investments, which are not measured by

3
financial indicators but rather by the achievement of social and political goals (Friesk et
al., 2014). In consideration of this point, the current research addresses the apparent gap
between theory and practice (Chan and Reich 2007;Luftman and Derksen 2012; Wilson
et al. 2013), and further proposes a model by which organisations can link IT and
business goals to organisational performance.
This research attempts to fill the gap identified in the literature by studying the
factors affecting the strategic alignment of business and IT, and presenting it for further
investigation in terms of its implications on the organisational performance of public
organisations.
The intended contribution will allow researchers, managers and public
organisation executives to control factors affecting this alignment, leading them to
achieve better performance. This research therefore presents a practical use of the
Strategic Alignment Model (SAM), allowing businesses to control factors impacting its
progression, paving the way for further research in this area to find empirical data on
strategic alignment in a suitable context. As such, this paper provides an overview of the
research being undertaken in pursuit of investigating these aspects.
The remainder of this paper is structured as follows: Section 2 provides an
overview of the literature in the field of strategic alignment; Section 3 presents a
conceptual model; and Section 4 concludes the paper.

2. REVIEW OF THE LITERATURE

Strategic management is concerned not only with understanding what changes

are needed, but also how organisations will implement and manage these changes,
creating a roadmap for contiguous developments that eventually will lead to enhanced
performance. The difficulty in strategic management is the challenge of laying a
foundation for success in the future whilst simultaneously meeting today’s challenges.
Importantly, this provides a dynamic method—not only a planning model—centred on
evaluating the success of organisations, specifically public entities, in meeting
customers’ demands in new public management.
Hence, the importance of strategic planning and Information Technology is their
potential influence on the performance of organisations (Elbanna, 2008; Miller and
Carfindal, 1994; Yusuf and Saffu, 2009). A large body of research carried out in the
United States, and in other developed countries, has conceptually and empirically
supported the notion that integrating business strategies and IT strategies through
strategic alignment shows a positive correlation with the performance of private and
public organisations (Miller and Cardinal, 1994; Sarason and Tegarden, 2003).
What is noteworthy is that most of the existing studies have been conducted in
developed business contexts, which are known to have a free market economy coupled
with a developed public sector (Bryson, 1988; Greenley, 1995; Martinez and Williams,
2010; Yusuf and Saffu, 2009). Although strategic planning and Information
Communication Technology literatures have taken a step towards internationalising the
concept of strategic alignment, as well as the antecedents of this alignment, systematic
studies in a developing country and public organisations context are still lagging behind
(Elbanna, 2008).

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 2.1 Strategic Alignment
During the last few decades, researchers have witnessed the emergence of the
concept of Strategic Alignment. Although it has attracted many researchers and has
been the concern of many consultants and practitioners, and also has been clearly
defined, this concept is still in its infancy, and appears to lack a theoretical foundation
and practical validation (Levy et al. 2011; Maes et al., 2000; Schwarz et al. 2010;
Wilson, 2013).

The concept of strategic alignment has been introduced by Henderson and

Venkatraman (1993, p. 474), who describe it as: ‘The degree of fit and integration
among business strategy, IT strategy, business infrastructure, and IT infrastructure’.
Other researchers define alignment as the sharing and supporting of the business
strategy with the IT strategy, and how the business manages IT (Reich and Benbasat,
1996; McKeen and Smith, 2003).

Luftman and Brier (1999) define ‘good alignment’ as the application of the
appropriate Information Technology at the right time and place in mind of helping
organisations to achieve their goals and objectives. Campbell provides a very clear
definition as follows: ‘Alignment is the business and IT working together to reach a
common goal’ (Campbell, cited in Chan and Reich, 2007). Abraham (2006, p. 1) also
provides a very clear and simple definition of alignment, which is: ‘Strategic alignment
is then, everyone rowing in the same direction’.
Several researchers have conducted studies on strategic alignment, during which
there has been the development of models and frameworks (Henderson and
Venkatraman, 1993; Johnston and Yetton, 1996; Khan, 2013; MacDonald, 1991).
However, most studies were based on the Strategic Alignment Model (SAM) proposed
by Henderson and Venkatraman (1993, 1999). Furthermore, many researchers and
organisations have used this model to assess the level of alignment in a firm.
Henderson and Venkatraman’s Strategic Alignment Model (SAM)—the most
commonly cited framework (Chan and Reich, 2007)—comprises two main dimensions.
The first is strategic fit, which refers to the concordance between internal and external
domains. The integration of this domain is considered a strategic integration, which is
seen to reflect the link between business strategy and IT strategy. The second dimension
is referred to as functional integration, which refers to the two types of integration
between business and IT domains. The integration in this domain is at an operational
level, and links organisational infrastructure and process, and IT infrastructure and
process (Henderson and Venkatraman 1993).
Researchers have studied the SAM, translating it into action plans and
management frameworks (Lewis, Oldach and Luftman, 1993). One of the key
extensions to the SAM is the Strategic Alignment Maturity Model by Luftman (1996).
This identifies SAM practically, not with the aim of enhancing it but rather in mind of
expanding the related research related through the development of an alignment
framework; this includes a number of alignment criteria and levels.
In an attempt to further enhance the SAM, Maes (1999) developed a generic
model by incorporating more details within the internal and IT domains through the
Integrated Architecture Framework introduced by Godvolk (1999). Maes et al. (2000)
have further proposed a unified framework; this includes more functional and strategic
layers within the original model, reflecting the current need for information and
communication. This unified framework is the first comprehensive attempt to enhance
the original model, revealing the fact that technology evolves and becomes more
integrated with business strategies.

5
Although most strategic alignment models have been based on the SAM, the literature
lacks evidence of its practical (Avison et al., 2004, Leonard and Seddon, 2012). This
recognition is identified in greater detail in in the following subsection.

-­‐ Strategic Alignment Model

Based on the emphasis of the model developed by Morton (1991) on the
strategic power of Information Technology, Henderson and Venkatatram (1992) created
the SAM.
As noted previously, the SAM comprises two dimensions, namely a strategic fit
that distinguishes the external focus towards the business environment (encapsulating
competencies and governance structures), and an internal focus towards administrative
structures (including processes and skills). Functional integration between these
components distinguishes between business and IT within the organisation; hence, the
SAM covers alignment between business strategy and IT strategy at the strategic level,
which is considered a driver and an enabler, whilst covering the alignment of business
processes and organisation, and IT infrastructure and organisation at the operational
level. The dynamic nature of the SAM allows it to recognise cross-domain relationships
(Henderson and Venkatraman, 1993), as discussed in the following subsection.

-­‐ Alignment Perspectives

The first two cross-domain relationships occur when business strategy serves as
the driver. The first perspective is termed ‘strategy execution’; this is the most common
alignment perspective as it adopts the classic view of strategic management, considering
business strategy as the driving force for both organisational design and IT
infrastructure. The second perspective is termed ‘technology transformation’, which
engages Information Technology strategy, infrastructure and processes in the
assessment of the implementation of selected business strategy.
The other two perspectives arise when Information Technology is considered to
be an enabler of an enhanced business strategy. The competitive potential perspective is
related to the new capabilities of Information Technology, which has a great influence
on strategy and strategy execution, creating new links with organisations’ valuable
resources.
The last perspective is service level, with this alignment seeking to meet
Information Technology customers’ needs and where the indirect role of the business
strategy is established by setting directions to stimulate customer demands. It ensures
the effective use of Information Technology in organisations.

2.2 Alignment Measures

If strategic alignment is important to an organisation, measuring this alignment

would be of equal importance. As such, there is complexity recognised in line with this
arising concern surrounding strategic alignment between business and Information
Technology in terms of application and sustaining the harmony of the relationship
between business and Information Technology (Wilson et al. 2013). Moreover, it is also
difficult to assess the maturity of this alignment and measure its impact on organisations
(Papp and Luftman, 1995).

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 Due to the importance of strategic alignment (Avison et al., 2004), and since
strategic alignment is hypothesised as having a positive impact on business performance
and IT effectiveness (Chan and Huff, 1993), researchers have proposed tools and
methods for the assessment of strategic alignment, such as those put forward by
Luftman (2004), and the 12-item measure of alignment, as proposed by Kearns and
Lederer (2003). Bergeron et al. (2004) also developed a tool for the measurement of IT
strategy and IT structure in organisations, centred on assessing its effect on
organisational performance.
A recent study by Pereira et al. (2014) contributed through the development of a
tool to improve alignment between business and IS strategies; this was achieved by
generating relative information related to prioritising IS projects that meet business
needs with the objective to achieve higher return on investment.
Another research by Palletier and Raymond (2014), was conducted to propose a
process model of reconfiguration of the firm’s IT and organizational resources,
competencies and capabilities. However this recent contribution was not validated and
the aim of it was only to provide an alternative for investigating and managing the
process of IT alignment.
In conclusion, none of the aforementioned tools have been based on the
components of the two dimensions of the strategic alignment model (Henderson and
Venkatraman, 1993) or otherwise on the enablers and inhibitors of business and
Information Technology alignment (Luftman et al., 1999); rather, as Figure 1 shows,
these have been based upon the model of Luftman (2004), with this approach covering
all of the dimensions of alignment (Belfo and Sousa, 2012). This is referred to as the
Strategic Alignment Maturity Assessment.

Enablers Inhibitors
1. Senior executive support for 1. Senior executives do not
IT; support IT;
2. IT involved in strategy 2. IT/business lack close
development; relationships;
3. IT understands the business; Business / 3. IT does not understand  
4. Business–IT partnership; business;
5. Well-prioritised IT projects; IT 4. IT fails to meet
6. IT demonstrates leadership. Alignment commitments;
5. IT does not prioritise well;
6. IT management lacks  
leadership.

Figure 1. : Enablers and Inhibitors of Business IT Alignment Adapted from Luftman (1999)

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 2.2.1 The Six Strategic Alignment Criteria
As described by Luftman et al. (2004), there are six strategic alignment criteria, also
shown in Figure 2:
1. Communications: this refers to the effective ongoing exchange of knowledge
between business and Information Technology departments within organisations.
2. Competency/Value Measurements: the measurement of the IT value and its
contribution to the business.
3. Governance: ‘Ensuring that the appropriate business and IT participants formally
discuss and review the priorities and allocation of IT resources’ (Luftman et al.,
2004, p. 17).
4. Partnership: defined as the ‘the relationship that exists between business and IT
organisation’ (Luftman et al., 2004, p. 18).
5. Scope and Architecture: this criteria provides an assessment of Information
Technology maturity by measuring the extent to which Information Technology is
capable with regard to the set of criteria defined by (Luftman et al., 2004), namely
going beyond the front/back offices of the organisation, assuming roles that
support a flexible infrastructure transparent to all business partners and customers,
evaluating and applying emerging technologies in an effective manner,
enabling/driving business processes and strategies as a set of standards, and
providing solutions customisable to customer needs.
6. Skills: these ‘include all of the human resources considerations for the
organisation’ (Luftman et al., 2004, p. 19). Such considerations are not only
salary and performance, but also social and cultural, with such factors including
innovation, entrepreneurship and learning dimensions.

COMMUNICATION

COMPETENCY PARTNERSHIP
MATURITY OF
IT / BUSINESS
STRATEGIC
ALIGNEMNT
SKILLS
GOVERNENCE

SCOP and ARCHETECTURE

Figure 2. IT/ Business Strategic Alignment Maturity Dimensions, adapted from Luftman (2004).

8
 Based on the above-mentioned alignment maturity dimensions—and using the
assessment tool of Luftman (2004), which determines the level of strategic alignment in
organisations based on a set of attributes against each dimension—the proposal is made
that this assessment can provide organisations with their current level of alignment in
order to achieve its management and enhancement according to their alignment goals
and objectives.
This study will expand the research on the SAM by linking this alignment with
organisational performance with the aim of providing better execution to the model and
ensuring that the goals and objectives of the organisations are met. The following
section will provide insights into and limitations of the recent studies on the SAM.

2.3 Previous Empirical Studies

Previous empirical studies have investigated strategic alignment in different

perspectives. In this research, we have classified the previous research into two
categories depending on the findings: (1) the impact of strategic alignment on
organisational performance; and (2) investigating the factors influencing strategic
alignment.

2.3.1 Strategic Alignment and Organisational Performance

Linking business and Information Technology in terms of strategic alignment is

crucial to organisations, as noted by researchers to date (Papp, 1995; Luftman, 1996;
Luftman and Brier, 1999), although it is also recognised that more studies need to
addresses both the effectiveness and efficiency of this model, which is ‘doing the right
things right’ (Lutman, 2000), and studying its impacts on organisational performance.
It is important to note that organisational performance is multi-dimensional and
difficult to comprehend and measure (Pennings and Goodman, 1977). Furthermore,
organisations have different performance goals, and may vary based on the targets set,
the phase of measurement, the criteria used, and in line with whose perspective is taken.
Hence, organisations are able to plan and control once the performance criteria and
measures of these criteria are available (Globerson, 1985). Thus, in order to answer the
calls for more research on the impact of the strategic alignment on the organisational
performance, a set of measurement tools and criteria reflecting the strategic decisions
(i.e. strategic alignment) is needed (Chakravarthy, 1986).
Based on the organisation’s strategies, a set of performance measurement tools
and criteria should be developed and adopted. Organisations need to align their
performance measurement with their strategic goals and objectives through matching
the goals of strategic alignment with organisational goals.
Whilst the contingency perspective is widely adopted to describe and understand
the interrelationships within and amongst organisational subsystems, as well as between
the organisational system as an entity and its environments (Kast and Rosenzweig,
1973), the literature lacks empirical research examining the impact of fit
between/amongst various patterns of domain on business performance (Bergeron et al.,
2004). A wealth of research has reported that strategic alignment increases the
performance of organisations (Al-Adwan,2014; Chan et al., 1997; Cragg et al., 2002;
Floyd and Woolridge, 1990; Powell, 1992; Weiss and Thorogood, 2011). Misalignment,

9
on the other hand, can cause failures in the management of IT projects, as well as the
neglect of IT when making business decisions (Sauer and Burn, 1997).
Based on the firm typology provides by Miles and Snow (1978), Sabherwal and
Chan (2001) studied the impact of alignment on organisational performance, and proved
the positive link between them, detailing evidence to support improved business
performance. Although the study showed a significant correlation between alignment
and performance, Sabherwal and Chan (2001, p. 27) concluded that, ‘The processes by
which alignment is accomplished (i.e. practically and effectively worked out) in
organisations needs to be better understood’. This conclusion encourages researchers to
conduct additional studies on alignment in order to provide better understanding of the
methods, processes and factors of alignments; this helps in achieving improved
performance.
Other researches by Sabherwal et al. (2001) have examined the way in which
alignment evolves over time, although most research in the alignment field has treated
alignment as a static end state as opposed to a dynamic situation, as noted by Henderson
and Venkatraman (1993). In this vein, Sabherwal et al. (2001) developed the Punctuated
Equilibrium Model (Sabherwal et al., 2001), suggesting that, once alignment is
achieved, it passes through periods of stability or evolutionary change, with such
evolutionary periods interrupted by short revolutionary periods. Revolutionary periods
are suggested to be a combination of environmental shifts, influential outsiders,
sustained low performance, perceptual transformation and strong leadership. The
findings of this study show that some firms had low alignment or misalignment even
during revolutionary periods. They concluded that a redesign is used, although this does
not often work. In an effort to address this, the IS strategic management profile should
include business and IS strategy and structure.
Tallon and Pinsonneault (2011) have also studied the relationship between
alignment and firm performance through the use of agility as a mediator under different
conditions of IT infrastructure flexibility and environmental volatility. They found a
positive and significant link between alignment and agility, and between agility and
firm performance; however, their contribution integrates the literature on strategic IT
alignment and organisational agility, but does not provide a direct impact on the
performance.
Papp (1999) agrees that alignment is the key to achieving improved profitability
from using Information Technology. In this regard, alignment is recognised as a
strategic fit, and the basic integration between business and Information Technology.
Papp recognises in the literature 12 different perspectives on alignment, with fusion
recognised as common and where this study offers an approach to assess or reach
alignment. This involves the application of the alignment model in assessing the
perspectives of the organisation, providing knowledge to identify and leverage
Information Technology to highest efficiency, with the inclusion of financial
measurements.
A research by El Mekawy et al. (2014) highlighted the Business-IT Alignment
potential link with organizations. Measuring the influence of alignment on information
security process (ISP). The in-depth literature survey followed by case study in two
organizations showed clear impact of business IT alignment on IT security components.
On the other hand, however, in their study of the use of Quick Response
technology in the retailing sector, Palmer and Markus (2000) did not find a positive or
negative link between alignment and performance.

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 Findings from the previous studies are clearly inconsistent, with contradiction
believed to be owing to the inflexible alignment plan and investing in different types of
IT that prevented the organisation’s ability to change (Chan et al., 2006).
Hence, researchers have investigated the factors that might impact the
relationship between alignment and performance, such as industry, type of strategy,
structure and size of organisation. In their studies on the antecedents and effects of
alignment, a comprehensive model was developed and empirically tested, including
some factors impacting alignment, along with the impact of this alignment on
organisational performance. The findings showed the positive effect of alignment on
organisational performance (Al-adwan, 2014; Chan et al., 2006; Chege, 2014).

2.3.2 Factors Influencing Strategic Alignment

Researchers have agreed that the process of strategic alignment requires full
awareness of the factors able to have an impact on it (Naryan and Awashti, 2014).
Accordingly, researchers have studies the factors proposed in the literature, confirming
or rejecting the positive relation with strategic alignment, such as Luftman, Papp and
Brier (1999), Reich and Benbasat (1996), Hussin, King and Cragg (2002), Chan,
Sabherwal and Thatcher (2006), Gutierrez and Lycett (2011). The outcomes of their
research are summarized in Table (1).
Another study by Yayla and Hu (2009) involved them proposing and empirically
validating a comprehensive strategic alignment model, identifying five antecedents of
alignment, namely centralisation, formalisation, shared domain knowledge, successful
IT history, and relationship management mediated by two drivers of alignment, notably
the level of connection between IT and business planning, and the level of
communication between IT and business managers. The findings of this study showed
significant effects on alignment, confirming the effects of all antecedents except
centralisation.
Most research on antecedents of strategic alignment focused on the role of IT/IS
managers in the alignment process paying less attention to the role of business
managers. Few research have examined the contributions of business managers in the
alignment process. Hence, a research by Mezghani and Mezghani (2014) was conducted
to to identify the contributions of business managers’ skills in achieving alignment
between business strategy and ERP (Enterprise Resources Planning) implementation.
These results of their study are in contradiction with several previous studies that
emphasize the importance of the "technical" skills of business managers (IT/IS skills) to
contribute to alignment.
Reviewing various attempts to measure fit (Atkins, 1994; Chan et al., 1997;
Lefebvre et al., 1992; Luftman et al., 1999; Reich and Benbasat, 2000) and
understanding processes of alignment brings us back to the idea of what may enable or
inhibit alignment (Luftman et al., 1996). Thus, if more studies need to cover alignment,
this needs to cover factors as well as the impact on the organisational performance.

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 3. DEVELOPMENT OF A THEORETICAL MODEL

Previous sections have so far focused on alignment between strategy, IT and

organisational performance based upon a review of the literature. This has shown that
many researchers have emphasised three major steams in the strategic alignment
literature, comprising factors, measures, and impact on organisational performance
(Luftman, 2000; Yayla & Hu, 2011).
By investigating the common factors affecting strategic alignment as detailed in
prior researches and accordingly establishing appropriate enablers to enhance an
organisation’s ability to strategically align business and IT (Luftman, 1999), which can
be measured using different kinds of measurement tools, in this study, the researchers
have selected Luftman’s strategic alignment maturity model (Belfo and Sousa, 2012).
Organisational performance, as an output to strategic alignment, may be measured in
terms of organisational profitability or any other financial benefits in strategic
management (Andrews et al., 2012). However, when measuring the organisational
performance of public organisation’s service quality, clients’ satisfaction, employees’
satisfaction, and cost control are key performance measurements indicators.
Accordingly, no direct link between strategic alignment and organisational
performance of public organisations has been identified conclusively in the literature as
of yet. Although considerable studies of the above relationships have been carried out,
few, if any, public organisations thus far have been able to establish a link between their
strategic alignment and organisational performance (Osman, 2012; Potnis, 2010).
Linking strategic alignment to organisational performance is not a simple task
owing to the fact that many factors influence this relationship (Chao and Chandra,
2012). Moreover, many factors influence organisational performance, and attempts to
trace causality to any single factor, such as strategic alignment, may be risky. In order to
avoid this risk and establish credible links between strategic alignment and the
organisational performance of public organisations, intermediate outcomes may be
introduced (Palmer & Markus, 2000).
The challenge is to identify the appropriate elements and relationships that
describe strategic alignment within an organisation in relation to business and IT
strategies, and accordingly to identify those factors that impact the use of models, such
as SAM; hence, to investigate the implications of organisational performance on public
organisations as a result. Thus, it is envisaged that the strategic alignment concept can
be best used as a concept when striving to understand organisational performance.
Based on this rationale and the preceding literature review, a theoretical model is
developed. The theoretical underpinnings are embedded based on those elements of the
literature as well as contingency theory (Van de Ven and Drazin, 1985; Venkatraman,
1989) and IT acceptance theory, based upon the Technology Acceptance Model (TAM)
(Davis, 1989; Venkatesh et al., 2003). This also notes the importance of linking
acceptance with social norms and behaviours across cultures (Triandis, 1977) and where
the mediation fit perspective from contingency theory is used to link the strategic
alignment with the organisational performance of the public organisations.
The mediation fit perspective is the intervention between an antecedent variable
(business strategy or IS/IT strategy) and a consequent variable (performance) (Kefi and
Kalika, 2005). Hence, a conceptual model was developed for this research with the aim
of examining the relationships between antecedent variables and a consequent variable.
By reviewing the literature in the previous section, Table (1) shows only four
factors were not included in SAM; these are external IT expertise, environmental
uncertainty, organisational size, and prior IS success. In this study, the researcher has

12
not included the external IT expertise, as Hussin et al. (2002) reported that this factor
did not have a relevant impact on strategic alignment. Another factor, which is
organisational size, was also left out of this study because researchers did not find a
significance influence on organisations (Gutierrez et al., 2009, Luftman and Kempaiah,
2007a). Another research by Chan et al. (2006) reported that environmental uncertainty
also does not have influence on strategic alignment; hence, the researchers have omitted
this factor as well. On the other hand, the analysis of the results does not provide any
indication of findings related to prior IS success; therefore, the researcher included this
in the research (Kurti et al., 2014; Yayla and Hu, 2009).
The theoretical analysis on IS success has assisted in the identification of an
additional factor that needed to be considered for further examination, which is IT
acceptance. Therefore, this study will seek to build on previous researches in the field in
an attempt to fill the gaps in the literature. This will be achieved by examining the level
of strategic and IT alignment, and linking it with organisational performance (as also
noted by Chan and Reich, 2007).

Research Nature of Nature of Factors Common

Empirical Alignment factors
Research

-IT involvement in
Luftman, Papp Data from 1051 Alignment of IT strategy development
and Brier business and IT plans and - IT understanding of
(1999) executives business Plans business - Planning
participating in - IT failure to meet Sophistication
alignment classes commitments
- Senior executive
support for IT
-Well-prioritised IT
projects - Shared
- Business IT Knowledge
Partnerships

Reich and 57 interviews in The social -Shared domain

Benbasat 10 business units dimension of the knowledge - Prior IT
(1996) business-IT - Successful IT history Success
alignment - Connections between
IT and business planning
- Communications - External IT
between IT and business expertise
executives
Questionnaire The Alignment
Hussin, King Survey of 256 between the -CEO commitment to IT
and Cragg small content of - IT sophistication
(2002) manufacturing business and IT - External IT expertise
firms strategies
- Environmental
Chan, Questionnaire Antecedents and uncertainty
Sabherwal and survey of 226 Outcomes of - Planning sophistication
Thatcher (2006) business firms Strategic IS - Shared domain
and 202 academic Alignment knowledge
institutions - Prior IS success
- Organisational size

Table 1: Common factors related to alignment of business and IT from prior research

13
 Researchers within the field of strategic alignment have explained the
importance and value of alignment to organisations by developing models and
frameworks; however, the results obtained after testing these models were inconsistent.
Researchers have related this inconsistency to the use of different measures of
alignment, contributing to the slow progress of research in this critical field (Gerow,
2014). Accordingly, this study concludes by proposing a model that is based on the
strategic alignment model and the matching assessment tool linked to organisational
performance assessment measures (Figure 3), as discussed in the following section.

3.1 Proposed Theoretical Model

A comprehensive conceptual model is presented in Figure 3, which illustrates

the relationships discussed so far. The importance of the relationships within the
conceptual model is presented in Section 2; the impact of this factor on performance has
been studied in previous researches (Cragg et al., 2002; Kearns and Lederer, 2001). The
process of strategic alignment maturity assessment for public organisations comprises
the analysis of the correlation between the level of alignment with organisational
performance, highlighting the impact of the factors influencing this alignment (Zaid,
2014), as shown in Figure 3.

Prior IS Success IT Acceptance

IT
Strategies

Strategic Alignment Organisational Performance

Business
Strategies

Latent Variable

Figure 3: Conceptual Model for Strategic Alignment and Organisational performance

The conceptual model is based on the strategic fit of the components of

Henderson and Venkatraman’s Strategic Alignment Model (1993). It links the strategic
alignment with organisational performance, and predicts the enhanced performance
predicted to be an outcome of the alignment between the two independent latent
variables, which are business strategy and IT strategy.
Measuring the strategic alignment of the two variables is the main argument of
this research. It is suggested that this link be measured in a more practical way through
the use of Luftman’s strategic alignment maturity assessment tool (Reix, 2002; Kalika
et al., 2003).
The researchers have proposed an approach that is globally dependable on the
original model of Henderson and Venkatraman (1993). This approach is used in a
number of recent empirical works (Mikalef et al., 2014; Osman, 2012). Organisational
performance—which is recognised as the dependable variable of the conceptual model
presented—is suggested to be measured by multiple criteria measures.

14
 4. CONCLUSION

The research being undertaken and presented in this paper highlights the
importance of strategic alignment between business and IT strategy, and the potential
positive impact it can have on organisational performance. Aligning business and
Information Technology is significant once the factors affecting this alignment are
considered and strategic alignment is linked to the goals and objectives of the
organisation. Furthermore, with regard to public organisations’ performance, the
researchers have taken the theoretical gap in this field into consideration in an effort to
develop a strategic alignment model that links the maturity of the strategic alignment
with organisational performance through the implementation of a multidimensional
approach. This may be of a great value for practitioners as an aid in the decision-making
process. It will also provide empirical evidence and widen the research on the strategic
alignment in the context of public organisations.
The conceptual model presented seeks to structure the empirical stage for future
research as a foundation for research design. The model identifies the elements about
which data needs to be collected to make the research outfitted. The structure of the
conceptual model defines the structure of the questionnaire and the data collection
process as a whole. A follow-up research will examine the presented model in an effort
to provide the evidence that populates it and provides the empirical data.

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