The Role of Alignment between Corporate IT and SBU IT in Creating SBU Agility

Information technology (IT) is considered to be an important enabler of organizational agility. Yet, managers continue to speak of their frustration with IT-based rigidities that hinder responsiveness to market threats and opportunities. This implies that the IT function is not always aligned to the aims of an agile business. Prior research has not investigated this issue in multi-business organizations where strategic business units (SBUs) compete across distinct market segments. To establish synergy across the organization, management defines a corporate IT platform to be shared by SBUs. In contrast, each SBU defines its own IT portfolio to increase local flexibility. This study examines whether the multi-level alignment between SBU IT and corporate IT affects SBU agility. In a survey of 94 multi-business organizations, the study finds that multi-level IT alignment enhances SBU agility and facilitates the alignment between SBU IT and SBU business strategy, which in turn also affects SBU agility.