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international journal of management review

international journal of management review     ISSN: 2789-665X

Current Issue: Volume 9, Issue 1, 2023 Abbreviated Title: Int. j. manag. rev.

The Relationship between the Alignment of Information Technology and Business Strategy and the Organization’s Financial Performance

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The alignment of information technology (IT) and business strategy and its relationship with the organization’s financial performance are research domains that are still being investigated despite having a long history. The present study attempted to analyze the relationship between IT and business strategy alignment (vertical alignment) and the organization’s financial performance in five years from 2014 to 2018 in a group of companies registered in the Tehran Stock Exchange. The configuration theory in strategic management was used to develop the conceptual model and research hypotheses. By analyzing the resulting data, the IT strategy was divided into four configurations of developmental, innovative, and conservative behavior, and the business strategy was divided into four configurations of innovators, cost defenders, distinction defenders, and analysts. Research hypotheses involved the relationship between the combination of configurations and the organization’s financial performance. Therefore, two methods of alignment as correlation and alignment as Gestalt were used. In the correlation test, the relationship between combinations was extracted from the literature, and in the Gestalt method, the configurations were combined in an exploratory manner using the data of the problem without presuppositions in the literature. Results of the correlation test showed that, except for the relationship between conservative and cost defender configurations, the other relationships do not have a significant correlation with performance. In the Gestalt method, two clusters were obtained; the first cluster with high performance was mainly a combination of innovators’ and distinction defenders’ strategies in terms of business and innovation and developmental strategies in terms of IT.

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