The Responsiveness of Information Technology to Business Strategy Formulation: An Empirical Study

Abstract

In a study involving 88 companies, the nature of the linkages between business strategy and information technology (IT) responsiveness was explored. The results indicate that variations in IT-strategy responsiveness, measured by the extent to which IT is explicitly considered in business strategy formulation, are linked to the type of business strategy being pursued by the organization. For example, IT is more responsive to business strategy in organizations which place heavy emphasis on innovation in their product and market strategies than in those which operate in a relatively stable product/market area. This implies that organizations with an aggressive business strategy are more likely than those with a conservative business strategy to explicitly consider IT as a strategic resource in formulating business strategy. This paper suggests that the extent to which IT is used to shape business strategy differs among organizations, and that business strategy can help us understand these differences.

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