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International Journal of Enterprise Management, Vol. 18, No. 6, 2005, pp. 653-664
STRATEGIC ALIGNMENT: A PRACTITIONER’S PERSPECTIVE
Bruce Campbell, University of Technology Sydney, Australia.
Robert Kay, University of Technology Sydney, Australia.
David Avison, ESSEC Business School, France.
Organizations are becoming increasingly aware of the importance of aligning information systems
with organizational processes, goals and strategies. One way of representing strategic alignment is
through the creation of a causal-loop diagram. The exploratory research presented here involved six
senior IS/IT managers during three 2-hour focus group sessions, which led to the development of such
a diagram. The focus group sessions were recorded, transcribed and analyzed using content analysis.
The diagram presents a systemic view of IS/business alignment within organizations, as seen through
the lens of these practitioners. Our research suggests that although practitioners understand that a
high level of connection between IS and business planning processes may be dependent on the level of
integration between the IS group and other sections of the organization; they are still unable to
develop the necessary relationships. It appears that the culture of many organizations is impeding the
development of this integration. The research highlights the inter-relationship between the social and
intellectual dimensions of alignment.
Keywords: strategic alignment, strategy development, causal-loop diagram, focus groups
1 INTRODUCTION
The importance of aligning the objectives and strategies of an organization’s information systems (IS)
group with those of the broader organization has been recognized for some time (Lederer and
Mendelow 1986; Henderson 1990; Chan and Huff 1993; Henderson et al. 1996; Luftman 1996;
Kearns and Lederer 2000; Reich and Benbasat 2000; Chan 2002) and is usually referred to as strategic
International Journal of Enterprise Management, Vol. 18, No. 6, 2005, pp. 653-664
The value of the model in terms of Teo and Ang’s CSFs, is that it provides some level of causality
between the different issues. In order for senior management to pro-actively involve IS in the
business, it must be knowledgeable and comfortable with IT (Snr mgt’s knowledge of IT). This is
gained via Effective communications with senior IS managers as a result of Networking opportunities.
What this set of relationships shows is that the participants had an intuitive understanding of the
importance of social alignment and its impact on strategy development. This is characterized by Earl
(1993) in his organizational approach to strategic planning.
The third and fourth of Teo and Ang’s CSV’s are significant to the discussions in this paper as they
highlight the importance of IT credibility/Management Confidence in IS to the alignment process.
However, both this research and the work of Teo and Ang suggest a tendency for practitioners to focus
their attention on technical expertise as the pre-cursor to the development of IT credibility. They
appear to believe that this will then open the doors to Effective communication and the development of
shared domain knowledge between senior IS and business managers.
It is important to note that the participants were not at senior management level and they indicated
during the focus group sessions that the construct highlighted in Figure 4 is their view of how the
alignment process ‘should’ work, but may not represent their own observations in practice.
3.5 Other Observations to Emerge from the Process
A key variable identified by the participants, but not included in the model, was Culture. Its lack of
inclusion was due to its overriding effect on the dynamics of the entire model. According to these
practitioners, leadership style and culture are the prime factors that influence the behavior of the left-
hand side of the system shown in Figure 1. Some of the organizations that they worked in, the
Australian business units of multi-national corporations, had a culture that did not encourage
communication or collaboration between the business and IS functions, nor between the business units
themselves. In fact the organizational cultures encouraged competition and conflict between
departments and personnel rather than collaboration.
International Journal of Enterprise Management, Vol. 18, No. 6, 2005, pp. 653-664
alignment. The early research into strategic alignment tended to be theoretical in nature (Henderson
and Venkatraman 1990) providing the platform on which later work was developed.
Based on these early developments, a number of dimensions of strategic alignment have emerged.
The social dimension of strategic alignment has been defined as “the state in which business and IT
executives within an organizational unit understand and are committed to the business and IT mission,
objectives, and plans” (Reich and Benbasat 2000, p. 82). The intellectual dimension of strategic
alignment is defined as “the state in which a high-quality set of interrelated IT and business plans
exist” (Reich and Benbasat 2000, p. 82). Put simply, research into the social dimension tends to “...
focus on the people involved in the creation of alignment” whilst the intellectual dimension of
alignment tends to “... concentrate on the content of plans and planning methodologies” (Reich and
Benbasat 1996). This concentration has naturally led to research at the CIO/CEO level at which
planning methodologies are chosen and strategies developed. Furthermore the little research that has
been conducted on the social dimension of alignment has also been focused at this level (Reich &
Benbasat, 1996; 2000; Chan, 2002).
There is evidence to suggest that strategies developed at senior management level are often
modified or even sabotaged at lower levels of the organization during implementation (Davies 1993;
Allen and Wilson 2003; Nordstrom and Soderstrom 2003). Chan and Huff (1992) have also made the
observation that strategy is developed at executive level but essentially implemented at lower levels of
an organization, with the consequence that greater attention needs to be paid to the dynamics of
alignment at lower levels of the organization.
To address these concerns, the exploratory research described in this paper was designed around
two main research questions:
• Do IS/IT practitioners identify the same strategic alignment issues as those discussed within the
literature?
• Do IS/IT practitioners attempt to achieve strategic alignment through the same avenues
recommended in the literature?
International Journal of Enterprise Management, Vol. 18, No. 6, 2005, pp. 653-664
The methodological approach used led to the construction of a causal-loop diagram (Capra 1996;
Sterman 2000). This technique was used to elucidate and illustrate the relationship between the
different dimensions of alignment. The emergent diagram is based on the perceptions of IS/IT
managers from the Australian branches of large multi-national organizations. The participants were
purposefully not made aware of the alignment literature prior to the construction of the model in order
to address the first research question described above. The model produced through this process dealt
with a broad range of alignment issues, including:
• Competitive advantage,
• Effective communication between departments and individual personnel,
• The effect of is/it credibility and trust,
• The development of soft skills, and
• The involvement of top management in the process of alignment.
However, only those aspects relating to the two research questions above will be dealt with in this
paper.
The next section of the paper will describe the research methodology used, including the rationale
for using causal loop diagrams. This is followed by the results gained through the modeling sessions
and a discussion of their correlation with existing research on strategic alignment.
2 RESEARCH METHOD
The research described here used a focus group as a mechanism to collect data (Morgan 1997). Unlike
most focus group research, rather than just discussing the topic, in this case IS/business alignment,
participants were invited to develop a causal-loop diagram to represent their ideas (Capra 1996;
Sterman 2000). The diagram presented in this paper was developed over three, two-hour focus group
sessions, each with the same group of participants. The selection of participants was purposive rather
than forming a representative sample (Morgan 1997). The sessions were recorded and then
transcribed. Content analysis (Stewart and Shamdasani 1990) was conducted on both the causal-loop
International Journal of Enterprise Management, Vol. 18, No. 6, 2005, pp. 653-664
diagram and the focus group transcripts. Further, the enquiry reflected a constructionist epistemology
(Crotty 1998).
Causal-loop diagrams (CLDs) have been used within systems thinking, and especially within the
system dynamics discipline, for some time. They are particularly good for:
• Quickly capturing hypotheses about the causes of dynamics,
• Eliciting and capturing the mental models of individuals or teams, and
• Communicating the important feedback loops that you believe are responsible for a problem
(Sterman 2000).
CLDs have been used in system dynamics as an exploratory tool for complex, or messy, problems
(Vennix 1996; Sterman 2000). Their role in this present research was to illustrate the various
relationships between the intellectual and social dimensions of alignment as understood by the
participants. It is important to note that we approached the use of CLDs in this paper from a
constructionist perspective. As such we do not assume that the CLDs produced represent an objective
statement about the world but more closely “…our own constructions of the people’s constructions of
what they and their compatriots [were] up to” (Geertz 1973, p. 9). This distinction is important, as
many previous uses of the technique have assumed more objectivist outcomes.
All participants were in positions within their organizations where they were attempting to
implement mission statements and objectives, but not form them. This decision was taken explicitly
to address existing concerns in the literature regarding an over emphasis on the CIO/CEO level in
current alignment research. Their views, therefore, were drawn from the implementation of plans and
alignment strategies, if they existed, rather than their development. The emergent model reflects this
view.
Participants in the modeling sessions were senior, but not top, IS managers within the Australian
branches of multi-national organizations. Three of the participants had always worked within the IS
field whilst the remaining three had previous careers in general management but had transferred to
their current IS positions.
International Journal of Enterprise Management, Vol. 18, No. 6, 2005, pp. 653-664
Participants were asked to develop a generic causal-loop diagram indicating how, in their
experience, IS/business alignment could be achieved in an average business. The model was to include
both the key enablers and inhibitors of IS/business alignment that the participants considered most
important. As the participants were developing the model, they were encouraged to debate the
different cause/effect pairs they considered important and the polarity of the causal loops connecting
them. The results of this process are described in the next section.
3 RESULTS AND DISCUSSION
The results and discussion will be presented in five sections. Section 3.1 will provide a brief
introduction to causal loop diagrams; to assist readers interpret the model that was generated. Sections
3.2 to 3.5 will discuss the model in terms of the existing alignment literature.
3.1 Reading Causal Loop Diagrams
Causal loop diagrams can be read using two constructs – link and loop polarity. ‘Link polarity’ is
shown by positive and negative symbols at the head of the arrows indicating a ‘causal link’. A
positive symbol indicates that any change in the cause will create a movement in the same direction in
the effect beyond what it would otherwise have been (Sterman 2000). Causal links combine naturally
to form causal loops. The polarity of these loops may be indicated by a positive or negative sign at the
centre of the loop. As such, a negative causal loop will tend towards equilibrium within a restricted
range, whilst a positive loop will tend to either increase or decrease exponentially. Positive loops are
known colloquially as “virtuous” or “vicious” cycles. A simple way to identify positive or negative
feedback loops is to sum the number of negative connections within a loop. Assuming equal impact
for each element, a positive sum indicates a positive feedback loop, whilst a negative sum indicates a
negative feedback loop. The next sections will now compare and contrast the causal loop diagram
developed by the practitioners with the alignment literature.
3.2 Practitioners’ Perspectives on Using Credibility to Attain Alignment
International Journal of Enterprise Management, Vol. 18, No. 6, 2005, pp. 653-664
There are multiple paths to achieving IS business alignment described in the literature (Nelson and
Cooprider, 1996; Reich and Benbasat, 2000) and, as will be seen, in the model that the practitioners
produced. What is significant to note is the centrality of performance driven IT Credibility to the
practitioners’ model.
Earlier research indicates that most IS personnel believe their credibility is derived from their
technical knowledge and ability to deliver (Bashein and Markus 1997). The causal loop highlighted in
Figure 1 indicates that these practitioners hold a similar view. This is indicated by the positive link
between Successful Projects and IT Credibility. This is also significant as participants indicated that
they spent most of their working lives focused on improving their credibility via improved project
performance.
Figure 1. A focus on building credibility
The highlighted loop Building Expertise within this section is a negative feedback loop. This loop
is extremely simplistic but captured the experience of the practitioners and they did not wish to
elaborate this aspect of the model further. The overall effect of this (negative) loop is that variables
will tend to oscillate within a given range of values. The implication is that any quantum change in
the performance of an IS group is likely to be difficult. The model indicates that IT Credibility, too,
International Journal of Enterprise Management, Vol. 18, No. 6, 2005, pp. 653-664
will tend to oscillate within a relatively narrow band of possible values, unless alternative strategies
are employed by the IT/IS group. This may help to explain why attempting to increase IT Credibility
via improved Successful Projects is not a particularly effective tactic. This is significant as seen in the
next sections where the practitioners are attempting to use this variable as a primary lever to attain
alignment with only limited recourse to other strategies.
3.3 Practitioner’s Perspective on Developing Collaboration
According to the practitioners in this research, collaboration between IT and business personnel is a
pre-requisite to attaining alignment. This must occur at all levels of an organization. Without prior
collaboration it is unlikely, in the subjects’ view at least, that senior IT managers will be invited to
business planning sessions. Without this invitation, alignment of strategies is made difficult. Similarly,
they argue that without collaboration at lower levels of an organization, it is unlikely that strategies
will be successfully implemented. It is interesting, therefore, that there is a tendency within some of
the IS literature (for example Reich & Benbasat, 2000) and amongst our practitioners to view
communication and collaboration as a result of IT credibility rather than a basis for it.
Figure 2. A focus on collaboration
International Journal of Enterprise Management, Vol. 18, No. 6, 2005, pp. 653-664
Collaboration does not appear to achieve a great deal of significance in the alignment literature.
Instead, communication seems to be used as an alternative term. But our participants argued that
collaboration is much stronger. Reich and Benbasat (2000) developed a model from the literature to
guide their research into the social dimension of alignment. This model indicated that Shared Domain
Knowledge and Successful IT History were antecedents of both Communication and Connections
between Business and IT Planning. These, in turn, are antecedents to Alignment. These relationships
can be seen in Figure 3. Note that Reich and Benbasat, as with much of the literature, were only
concerned with dealings between IT and business executives. They do not consider effects at lower
levels of an organization.
Figure 3. Role of shared domain knowledge and communication in the literature
Nelson and Cooprider (1996) found that the Ability to Influence and Mutual Trust were necessary
antecedents to Shared Domain Knowledge, which in turn was an antecedent to IS Performance. It can
be argued that the IS Performance used by these authors is similar in concept to Successful IT History
International Journal of Enterprise Management, Vol. 18, No. 6, 2005, pp. 653-664
used by Reich and Benbasat (see Figure 3). This immediately highlights an anomaly. Nelson and
Cooprider argue that Shared Domain Knowledge is an antecedent to IS Performance whilst Reich and
Benbasat argue that it is the inverse. The latter do admit, however, that all the relationships in the
model they developed from the literature could be recursive although they did not investigate this.
To further complicate matters, the literature on trust shows that, in most situations, prolonged positive
communication is necessary in the development of mutual trust as shown in Figure 3 (see, for
example, Kramer and Tyler 1996; Bashein and Markus 1997). Thus good communications is a
prerequisite to shared domain knowledge and not a result of it, as suggested in the model of Reich and
Benbasat (2000). This further anomaly illustrates the complexity of this whole area.
When asked about trust, the practitioners maintained that it is an integral part of IT credibility and
did not need to be modeled separately. The model then indicates that they are using the credibility and
trust developed via successful projects to further Networking opportunities, Effective communications
and the eventual development of their knowledge of the business and, ultimately, IT/business
collaboration. Put simply, our practitioners believe that technical expertise is the underlying driver for
the development of trust, credibility, communication, collaboration and alignment. This is supported
by the literature in part, though some business and the social sciences literature suggests that
prolonged communication should be the underlying driver.
3.4 The Role of Senior Management Support
As noted in the introduction, Reich and Benbasat (2000) have identified two dimensions of alignment
- the social, which has largely been discussed in the previous two sections, and the intellectual. Both of
these dimensions tend to be considered independently in the literature. For our practitioners, however,
the distinction is not as clear. The highlighted section of the model in Figure 4 illustrates the important
interaction of both business and IS senior management in the formulation and alignment of business
plans.
International Journal of Enterprise Management, Vol. 18, No. 6, 2005, pp. 653-664
Figure 4. A focus on senior management support
Teo and Ang’s (1999) survey research of 169 IS managers prioritized the 18 most important critical
success factors (CSFs) in aligning business and IS plans. Many of these CSFs are reflected in the
causal-loop model developed by our participants, but in this section we will consider only their top
four. Table 1 indicates the concepts from the model that are analogous to Teo and Ang’s CSFs.
Top 4 Critical Success Factors Concepts from the Model
1. Top management is committed to the strategic
use of IT
Pro-active senior Management in involving IT in
business
2. IS management is knowledgeable about the
business
Senior Management knowledge of IT in business
3. Top management has confidence in the IS
department
IT Credibility
4. The IS department provides efficient and
reliable services to user departments
Successful Projects
Table 1 Integrated Planning Critical Success Factors (Teo and Ang, 1999) and Model Variables
International Journal of Enterprise Management, Vol. 18, No. 6, 2005, pp. 653-664
For example, participants related the following two stories:
Manager 1: So there’s a bunker mentality – New South Wales branch against Victoria
branch. I’ve come across this a lot in the last few months, and I’m just thinking it makes
no sense. So, as far as IT and business alignment goes one of the main inhibitors may
well be divisions within the business as well, not just IT.
Manager 2: ... I believe the current philosophy in our group is....very conflict oriented.
There’s a whole history of things that have gone sour and people...many (IT) managers
are extremely defensive.
The lack of communication means that the development of trust is severely impeded (Creed and
Miles 1996; Campbell 2003). This, then, affects the development of shared domain knowledge
(Nelson and Cooprider 1996) which, in turn, affects long term strategic alignment (Reich and
Benbasat 2000). The construct of the model in Figure 1 indicates that it also affects the development
of integrated IS/Business plans and strategies. Ongoing research, not reported here, indicates that the
structure of many organizations and the tendency to separate IS personnel from their internal
customers, also severely impedes the development of communication.
Another issue that the participants wanted to highlight is that the model must be read at various
levels. As previously mentioned, most alignment research has restricted itself to considerations at the
executive level. These participants believe that the model they constructed is relevant at all levels of
the organization. That is, the development of mutual trust, ability to influence and shared domain
knowledge (Nelson and Cooprider 1996) must occur at all levels of an organization to ensure that not
only are strategies aligned during development, but that alignment aligned occurs at implementation.
4 CONCLUSION
This paper has reported on the perceptions of IS managers on strategic alignment between the IS and
business functions of organizations. The goal was to explore two main research questions:
International Journal of Enterprise Management, Vol. 18, No. 6, 2005, pp. 653-664
• Do IS/IT practitioners identify the same strategic alignment issues as those discussed within the
literature on the topic?
• Do IS/IT practitioners attempt to achieve strategic alignment through the same avenues
recommended in the literature?
In response to the first research question, it became clear through the development of the causal-loop
diagram that the sample of IS/IT managers involved in the focus groups held similar perceptions to the
literature regarding strategic alignment. However, we found, in regard to the second question on how
strategic alignment is achieved, that a range of divergent views exists between the literature and the
practices of IS managers.
The dilemma arises when attempting to achieve alignment. Although the participants believed that
strategic alignment generally depends upon communication, collaboration, the development of trust
and shared domain knowledge, as suggested in the literature, actually achieving these prerequisites is
problematic. In many organizations, including those of the participants in this study, activities
supporting the development of these prerequisites were either poorly supported or actively
discouraged. This was primarily due to a combination of the prevalent organizational culture that, in
part, promoted competition between departments and the structure of many organizations that made
personal communication difficult. This could provide an explanation for the perceived focus on the
achievement of a track record of successful projects, as this was seen as a way to develop the required
credibility to engage the social interactions necessary for successful strategy development. This is
also reflected in some of the literature.
Reich and Benbasat (2000) argued that the credibility of the IS/IT function is gained via its
technical expertise (Successful IT History in Reich and Benbasat’s terms) and that this then can lead to
successful communications. Bashein and Markus (1997), however, note that it is a commonly held
misconception by technical personnel that their credibility is created by their technical expertise. It is
actually developed through other more social avenues including regular communication.
International Journal of Enterprise Management, Vol. 18, No. 6, 2005, pp. 653-664
The mental model held by our practitioners will be extremely problematic if, as the model
indicates, it is difficult to increase credibility in any significant degree over a prolonged period of time
by means of improving project success. If they currently lack credibility it is unlikely that they will
ever be able to improve this to a point where they feel comfortable enough to develop the relationships
that are necessary to promote shared domain knowledge, collaboration and alignment. This was borne
out by our practitioners who admitted that they spend little time developing relationships with business
personnel – they tend to concentrate on the technical aspects of their jobs, attempting to improve their
credibility via their successful completion of projects.
IS researchers need to reassess their own mental models in regard to this issue, as although some
researchers have acknowledged a potentially recursive relationship between many alignment variables
(Reich and Benbasat 2000), it appears that very few have explored this facet of the topic and as such it
remains poorly understood.
The research presented in this paper was exploratory in its attempt to gain an appreciation of the
dynamic nature of alignment. The model derived via the focus groups is generic in nature and
therefore may not represent any particular situation as participants were drawn from various
organizations and circumstances. It represents an idealized picture of the interaction between the
social and intellectual dimensions of alignment formed by these practitioners.
Our view as researchers is that we should not study the intellectual dimension of alignment or the
social dimension of alignment separately. We need to study the intellectual and social dimensions
together. They are inextricably linked in a web of cause and effect.
Additionally, both researchers and practitioners need to consider alignment issues at all levels of an
organization. It is not sufficient to develop aligned strategies at the executive level; we need to ensure
that alignment occurs during implementation. Both this and other research (Davies, 1993; Allen &
Wilson, 2003; Nordstrom & Soderstrom, 2003) further indicate that the occurrence of alignment at one
level does not guarantee alignment at another.
International Journal of Enterprise Management, Vol. 18, No. 6, 2005, pp. 653-664
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