Year

2014

Degree Name

Doctor of Philosophy

Department

School of Management, Operations and Marketing

Abstract

Explaining the effect of information technology (IT) on organizational performance is a primary concern for strategic IT alignment research. The central hypothesis is that performance is a function of the alignment between IT and the organization’s business strategy. Preceding theories explain the performance implications of IT alignment within a single line of business. However, they do not explain the need for IT to be aligned with distinct strategies developed at the corporate and strategic business unit (SBU) levels in a multi-business organization. This thesis begins the task of unpacking the concept of IT alignment to explain the performance implications of different types of IT alignment within multi-business organizations.

The thesis extends the literature by developing a new conceptualization of IT alignment in multi-business organizations and developing a novel theory of IT alignment in these organizations. In particular, it proposes that IT alignment can be conceived of as a family of constructs to accommodate three distinct alignment phenomena: corporate IT alignment, which refers to alignment at the corporate level, SBU IT alignment, which refers to alignment at the SBU level, and cross-level IT alignment, which refers to alignment between the corporate and SBU levels. Then, the thesis develops and tests a theory of the performance implications of cross-level IT alignment and SBU IT alignment in multi-business organizations.

The primary contribution of this thesis is to unpack IT alignment to explain how different types of IT alignment jointly affect the performance of multi-business organizations. Hypotheses are tested using data collected in a survey of one hundred and seven multi-business organizations in the US, Germany, and Australia. The results show that cross-level IT alignment is a significant enabler of SBU agility and performance. Further, the thesis shows that cross-level IT alignment facilitates SBU IT alignment, which in turn, enhances SBU agility and performance. This thesis contributes to research by showing that there is a link between different types of IT alignment in multi-business organizations and that they are complementary determinants of the performance of SBUs. It extends the understanding of IT alignment challenges facing practitioners in multi-business organizations and provides a platform for further inquiry.

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