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Aligning business and information technology (IT) is a long-standing issue of discussion both in information systems (IS) research and practice (Yolande E. Chan & Reich, 2007; Kappelman, McLean, Luftman, & Johnson, 2013). In general, striving for business-IT alignment means that organizations utilize IT resources in a way that they efficiently enable or support business strategies, objectives, infrastructures and processes and thus create value for the firm (Yolande E. Chan, Huff, Barclay, & Copeland, 1997; Coltman, Tallon, Sharma, & Queiroz, 2015; Sabherwal & Chan, 2001). Cultivating business-IT alignment is, for instance, expected to intensify utilization of IT, increase profitability and generate sustainable competitive advantage (Gerow, Thatcher, & Grover, 2014b; Grover S. Kearns & Lederer, 2003). In contrast, failing to evolve business-IT alignment could lead to poor resource allocation and failed IT initiatives, which adversely affects firm performance (Chen, Mocker, Preston, & Teubner, 2010; Ravishankar, Pan, & Leidner, 2011).
Although, more than 30 years of cumulative research in this field offers strong empirical evidence that organizations revealing high levels of business-IT alignment outperform those with low levels (Yolande E. Chan et al., 1997; Yolande E. Chan & Reich, 2007; Henderson & Venkatraman, 1999; G. S. Kearns & Lederer, 2000; Yayla & Hu, 2011), we seem to be still far from solving the riddle of how to synchronize the efforts of business and information technology (IT) in practice (Grant, 2010). Various reasons for this observation have been brought forward, particularly too mechanistic views of business-IT alignment (Grant, 2010), missing applicability of findings (Vermerris, Mocker, & van Heck, 2014) and, perhaps most importantly, a lack of strong and effective theoretical foundations (Yolande E. Chan & Reich, 2007; Luftman, Lyytinen, & Zvi, 2015).
Intended to find a way of conceptualizing the evolving reciprocal relationship between business and IT that takes on the three major challenges of prior research, we propose a new theoretical perspective on business-IT alignment based on cultural historical Activity Theory (AT). We then show how the tenets of AT enhance our understanding of the process and underlying mechanisms of business-IT alignment within organizational complexities. Moreover, we demonstrate how these concepts can guide alignment efforts in practice.
The remainder of this paper is structured as follows. First, we discuss recent developments in the field of business IT-alignment research and lay out its three major challenges. Second, following a succinct introduction of AT, we outline our activity theoretical perspective on business-IT alignment. Then, the context of our case study as well as our methods are briefly presented. We then continue to report on our findings and discuss the emerging insights. Finally, we discuss the limitations of our study as well as its practical and theoretical contributions.