The impact of IT-business strategic alignment on firm performance in a developing country setting: exploring moderating roles of environmental uncertainty and strategic orientation

Abstract

Aligning information technology (IT) strategy with business strategy has been one of the top concerns of practitioners and scholars for decades. Although numerous studies have documented positive effects of IT-business alignment on organizational performance, our knowledge about this relationship is still limited due to the complexity of contingent factors. The extant literature is largely based on research in the context of developed countries and few studies have explicitly considered the effects of contextual factors such as market environment and competitive strategy on this relationship. In this study, we attempt to fill these gaps by testing the alignment–performance relationship in a developing country setting and investigating the moderating roles of environmental uncertainty and strategic orientation on the performance effects of strategic alignment using survey data collected in Turkey. Our analyses show that this positive effect is statistically significant in highly uncertain environments and varies across performance measures. Our results also show that the strategic alignment between IT and business has a significant impact on performance across all choices of strategic orientation – defender, prospector, or analyzer. Theoretical and practical implications are discussed and future research directions are explored.

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