Week 4 - Strategic Alliance Model

Source / Reference:
1)  "Strategic Alignment: Leverage Information Technology for transforming organization" by J C Henderson and N Venkartraman 1993

http://www.sciencedirect.com.ezproxy.lb.polyu.edu.hk/science/article/pii/S0378720605000674

Subject:
In Lect 4 - Which alignment strategy in SAM model is the best? and why? 

Response:

From the article, it shown that not every view of strategic alignment yields positive results and there may still be a problem with trying to create and develop both plans consistently. Especially for the small and medium size firms, the gap between business and IT managers might be very significant.

There are four types of alignments: Process coordination alignment, Process integration alignment, Outcome matching alignment and Outcome moderating alignment.  As mentioned, not every view of strategic alignment can be served as a moderator between IT investment and firm performance. Among those, one of the process alignment factors (coordination) and both outcome alignment factors (matching and moderating) showed a leveraging effect on the relationship between IT investment and firm performance. And most of the evidences seem to indicate that the benefits could override the problems of developing those alignment.

However, there is no any alignment strategy in SAM is the best in all types of business. It's because different alignment strategy will fit on different business situation. To have the best firm performance and IT investment, we need to first understand the business situation of the firm deeply. For example, the firm size, the business goal, the business type, the external environment factors, the way  business performance is calculated  etc. In the article, it shown that different size of business will be benefited from different type of alignment strategy in various degree.

Another important point is to make the alignment strategy supporting the firm goal objectives and activities. That is, to ensure the effective of IT and always conduct re-conceptualize assessment of the performance of IT. 

Although we cannot tell which alignment strategy has the best performance, from the research, we noticed that if there is no alignment strategy in a business, increasing the IT investment will lead to a decrease in the firm performance. This shows how the alignment strategy is important for the firm. No matter which alignment strategy the firm chose, as long as it fits the business model, the firm can gain from it.