Organizational Structure's Influence on Business-IT Alignment: Looking Back to Look Forward

Organizational Structure's Influence on Business-IT Alignment: Looking Back to Look Forward

Gideon Mekonnen Jonathan (Stockholm University, Stockholm, Sweden), Lazar Rusu (Department of Computer and Systems Sciences, Stockholm University, Stockholm, Sweden) and Erik Perjons (Stockholm University, Stockholm, Sweden)
Copyright: © 2018 |Pages: 15
DOI: 10.4018/IJITBAG.2018070102
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Abstract

Despite the long list of cumulative research, business-IT alignment remains to be evasive for practitioners and researchers. As organizations continue to spend a significant amount of their resources on IT to improve the variety and quality of services, achieving and maintaining business-IT alignment is a timely issue. Studies indicate that organizational structure, among other factors, plays an important role on whether organizations succeed in achieving business-IT alignment. A systematic literature review is conducted to provide an overview of previous studies as well as point out possible future research directions. A total of 31 articles were identified and included in the review. The findings indicate that there are few studies poised to address the lack of knowledge on how the formal/informal organizational structure's influence on business-IT alignment. The study presents a summary of previous findings on organizational structure's influence on business-IT alignment and identifies potential future research directions.
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Introduction

Business-IT alignment, which refers to “applying Information Technology (IT) in an appropriate and timely way, in harmony with business strategies, goals and needs” (Luftman, 2000, p. 3), remains to be one of the evasive issues for both practitioners as well as researchers in the information systems research domain. The continuous attention rendered to business-IT alignment by scholars since the mid-1980s is justified given the empirical evidence that established the strong relationships between business-IT alignment and overall organizational performance (Benbya & McKelvey, 2006; Chan & Reich, 2007; Gerow et al., 2014). Surveys carried out among IT executives in different countries across industries have also revealed that business-IT alignment was consistently ranked at the top of the list of concerns for many years in a row (Kappelman et al., 2018).

Poor business-IT alignment has been observed in many organizations across industries. According to Chan (2002), leaders of organizations that fail to reach business-IT alignment struggle to articulate their organizations’ IT needs, nor do they succeed in instilling business vision or knowledge. The author also argues that the value derived from the investment on IT in such organizations might be lower in relation to the overall return. There are other studies that have shown that achieving and maintaining business-IT alignment is important for organizations as IT continues to change the way they run their activities and organize business processes, communicate with customers and deliver their services (Avolio, Kahai & Dodge, 2000).

Numerous academic- as well as practitioners’ articles and books have been published to further our understanding of the subject, organizations still falter in their attempt to demonstrate business-IT alignment. Despite the extensive scholarly deliberations, the IS and cognate domains’ literature continue to provide different conceptualization and definition of business-IT alignment (Knoll and Jarvenpaa, 1994). For instance, Kanellis, Lycett, and Paul (1999, p. 66) describe business IT alignment as a phenomenon which encompasses “the fit between an organization and its strategy, structure, processes, technology and environment”. A more specific definition of the term by Ra’ed and Wheeler (2001, p. 1097) presents business-IT alignment as “convergent intentions, shared understanding, and coordinated procedures.” However, the widely accepted view of business-IT alignment (Chan, 2002; Coltman, Tallon, Sharma and Queiroz, 2015) remains to be “the degree to which the information technology mission, objectives, and plans support and are supported by the business mission, objectives, and plans” (Reich and Beinbast,2000, p. 82). According to Henderson and Venkatraman (1993), achieving business-IT alignment is possible when there is “fit” and “integration” between organizations’ business- and information technology strategies, business infrastructures, and IT infrastructures.

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