Six Types of IT-business Strategic Alignment

EMPIRICAL RESEARCH
Six types of IT-business strategic alignment:

an investigation of the constructs and their
measurement
Jennifer E. Gerow
1
,
Jason Bennett Thatcher
2
and
Varun Grover
2
1
Economics & Business Department, Virginia
Military Institute, U.S.A.;
2
Department of
Management, Clemson University, U.S.A.
Correspondence: Jennifer E. Gerow,
Virginia Military Institute,
345 Scott Shipp Hall, Lexington, VA 24450,
U.S.A.
Tel: +540-464-7278;
E-mail: gerowje@vmi.edu
Received: 24 October 2012
Revised: 07 February 2014
Accepted: 28 February 2014
Abstract
Top management has been concerned with IT-business strategic alignment
(hereafter referred to as alignment) for the past 30 years. Consequently,
alignment researchers have developed many models to explain how alignment
generates value for firms. However, these models use inconsistent definitions
and measures of alignment, which has led to conflicting results and has
potentially inhibited the progress of research on this critical topic. This paper
emphasizes the importance of demarcating the six alignment types that are
sometimes confused in the literature into a single, unified model. It also reports
on the development of definitions and measures of these six types of alignment
including alignment between IT and business strategies (i.e., intellectual align-
ment), between IT and business infrastructures and processes (i.e., operational
alignment), and across these two domains such that strategies are linked with
infrastructures and processes (i.e., four types of cross-domain alignment).
Analyzing survey data collected from 140 Chief Information Officers, we found
each measure possesses desirable psychometric properties. Implications for
theory and practice are discussed.
European Journal of Information Systems advance online publication, 20 May 2014;
doi:10.1057/ejis.2014.6
Keywords: alignment; IT-business strategic alignment; intellectual; operational;
cross-domain
Introduction
IT-business strategic alignment has been studied extensively over the last
three decades. The primary focus of this literature has been assessing
whether, and how, aligning the business and IT generates value for the rm
(Celuch et al, 2007; Chan & Reich, 2007). On the one hand, cultivating
alignment between business and IT strategies could increase protability
and generate a sustainable competitive advantage (Kearns & Lederer, 2003).
On the other hand, failure to align could result in wasted resources and
failed IT initiatives leading to adverse nancial and organizational outcomes
(Chen et al, 2010; Ravishankar et al, 2011).
One reason for this persistent concern with alignment is that IT executives
continue to identify alignment as a top-three management issue (Luftman &
Ben-Zvi, 2011). This interest is manifest in Chief Information Ofcer (CIO)
discussion boards on the topic, such as LinkedIns CIO Network group,
which continually revisit alignment and label it as a major challenge that
keeps CIOs worried all the time (Shah, 2012). Due to IT executives
concerns, consulting groups such as Gartner continue surveying organiza-
tions about alignment (e.g., McKendrick, 2011), and technology groups blog
European Journal of Information Systems (2014), 127
2014 Operational Research Society Ltd. All rights reserved 0960-085X/14
www.palgrave-journals.com/ejis/
about howto align IT with business needs and processes (e.
g., Nituch, 2012; Ozcan, 2012).
Consistent with the practitioner literature, academics
frequently emphasize alignments positive aspects in the-
oretical frameworks and empirical research. In general,
alignment research focuses on the improvements to rm
performance (e.g., Cragg et al, 2002; Rivard et al, 2006)
such as increased sales revenue (e.g., Kunnathur & Shi,
2001; Kearns, 2005), improving operational efciency
(e.g., Oh & Pinsonneault, 2007), cost reductions (e.g.,
Chang et al, 2008; Johnson &Lederer, 2010), and enhance-
ments to customer value (e.g., Celuch et al, 2007). Research
suggests aligned rms more frequently leverage IT to
support overall business objectives and exploit opportu-
nities in the market such that they create a sustainable
competitive advantage and achieve supranormal prots
(e.g., Avison et al, 2004; Cumps et al, 2009).
While the preponderance of research emphasizes a posi-
tive relationship between alignment and performance,
some research has found aligned rms report no improve-
ment, or even a decline, in performance (i.e., an alignment
paradox) (e.g., Palmer & Markus, 2000; Tallon, 2003). In
these studies, researchers argue alignment creates a rigidity
that leads to stagnation, strategic inexibility, and a com-
petitive disadvantage by not responding to environmental
change (e.g., Benbya & McKelvey, 2006; Tallon, 2007a;
Chen et al, 2010). This rigidity may be caused by the time-
consuming, costly, and formal nature of alignment that
prevents quick responses to changing market conditions
(Tallon, 2007a; Chen et al, 2010). In summary, evidence of
the relationship between alignment and rm performance
has been inconsistent where most emphasizes a positive
alignmentperformance relationship but other research
indicates there may be a negative relationship.
Difculties in detecting consistent effects of alignment
may result from comparing studies that assess different
theoretical forms of alignment and utilize different align-
ment measures (Avison et al, 2004; Chen et al, 2010).
Conceptually, research has failed to converge on a consis-
tent denition of alignment (Preston & Karahanna, 2009).
For example, some indicate alignment is the linking of IT
and business strategies (e.g., Tan & Gallupe, 2006). Others
dene alignment as the t between IT and business infra-
structures and processes (e.g., Cragg et al, 2007). Still other
researchers refer to alignment as the simultaneous integra-
tion of business strategy, IT strategy, business infrastruc-
ture, and IT infrastructure (e.g., Porra et al, 2005). This
inconsistency in alignments denition is also present in
the practitioner literature. For example, practitioners may
discuss the alignment of architecture practice and deci-
sion making information (van Geel, 2011) or they might
indicate IT systems/application needs to be aligned with
business needs (Bicocchi, 2013). These distinct concep-
tualizations of alignment imply there may be different
types of alignment, as originally suggested by Henderson
& Venkatraman (1993, 1999).
Inconsistent theoretical denitions of the alignment
construct present several problems. First, absent a clear,
well-specied domain for the construct, it is impossible to
assess the adequacy of alignment measures (Nunnally &
Bernstein, 1994; MacKenzie et al, 2011). Second, such
ambiguity leads to confusion about what must be included
and excluded within the domain of alignment and how to
differentiate among types of alignment (MacKenzie et al,
2011). Finally, the indicators may be decient or contami-
nated since alignment is not adequately dened in a way
that differentiates it from other constructs (MacKenzie
et al, 2011).
Consequently, it is not surprising that empirical align-
ment research has failed to converge upon a set of estab-
lished scales. Of the over 175 published alignment studies
in journals, conferences, and dissertations, more than 115
employed some type of questionnaire (citation removed
for blind review). Yet, of these papers, just over 25% used
established scales like Venkatramans (1985) STROBE
(STRategic Orientation of Business Enterprises) and/or
Chan et als (1997) STROEPIS (STRategic Orientation of
the Existing Portfolio of Information Systems) (e.g., Chan
et al, 2006), Luftmans (2000) Strategic Alignment
Maturity Model (e.g., Khaiata & Zualkernan, 2009),
Segars & Grovers (1998) alignment items (e.g., Yayla &
Hu, 2009), or Miles & Snows (1978) categories (e.g.,
Raymond & Bergeron, 2008); none of these scales captures
the various types of alignment. The application of incon-
sistent and incomplete alignment measures presents
many problems for theory and applied research. First, if a
measure inadequately operationalizes alignment, research-
ers could derive invalid conclusions about the relation-
ships with other constructs, and the meaning of the
theory itself could be altered (Oh & Pinsonneault, 2007;
MacKenzie et al, 2011). Second, differing operationaliza-
tions of alignment create inconsistent results, which cause
confusion and make it difcult for researchers to have
condence as they build upon existing research and to
compare results across studies (Dennis et al, 2001;
McKnight et al, 2002). Finally, inconsistent research nd-
ings make it more difcult for practitioners to condently
apply these ndings in a real-world setting (Dennis
et al, 2001).
Taken together, this review suggests the literatures fail-
ure to converge on a shared understanding of alignment or
its implications (Bergeron et al, 2001) reect theoretical
and empirical inconsistencies in denitions and measures
of alignment. Building a cumulative research tradition
requires two advances in the literature. First, we need to
further rene theoretical denitions of the alignment
types that clearly state what is, and is not, included within
each type (Chan & Reich, 2007; MacKenzie et al, 2011).
Second, we need to develop consistent measures for each
alignment type in order to ensure rigorous, comparable
investigations of alignment (Bergeron et al, 2004; Oh &
Pinsonneault, 2007). Therefore, the objective of this study
is to build upon an existing alignment framework to dene,
construct, and statistically evaluate operational measures of the
different types of alignment and their relationship with nan-
cial performance.
Six types of IT-business strategic alignment Jennifer E. Gerow et al 2
European Journal of Information Systems
To realize this objective, we draw on the Strategic
Alignment Model (SAM) (Henderson & Venkatraman,
1993, 1999) as a framework to dene and assess the
different types of alignment. Next, we discuss existing
measures and our instrument development process. We
then discuss our survey and analysis of the results. Finally,
we present the limitations of our study, discuss our
conclusions, and present implications for researchers and
practitioners.
Defining types of alignment
Alignment is the degree to which the needs, demands,
goals, objectives, and/or structures of one component are
consistent with the needs, demands, goals, objectives,
and/or structures of another component (Nadler &
Tushman, 1983, p. 119). In the IT strategy literature,
researchers suggest realizing the full potential of IT
requires aligning some or all of four business and IT
components business strategy, IT strategy, business
infrastructure and processes, and IT infrastructure and
processes. Hence, IT-business strategic alignment refers to
the appropriate and timely t between two or more of
these components such that management of the business
and IT remain in harmony (Luftman & Brier, 1999; Chan
& Reich, 2007).
On the basis of a review of the IT strategy approaches
to alignment, Henderson & Venkatramans (1993) SAM
describes how rms aligning these four fundamental
components of strategic choice help them to realize the
full potential of IT. In particular, SAM suggests rms need
to integrate business and IT components at three levels as
shown in Figure 1: strategies (i.e., external integration
or intellectual alignment), infrastructures (i.e., internal
integration or operational alignment), and strategies and
infrastructures (i.e., cross-domain integration). These
levels are discussed in the following sections.
Intellectual alignment
The rst discussion of alignment between business and IT
components focused on the strategic, external levels (King,
1978). Kings denition focused on a one-way link where
IT strategy was designed to support the business strategy;
specically, he dened alignment as the link between the
organizations strategy set to an MIS strategy set
(p. 27). Future researchers rened Kings denition of
strategy sets by including missions, objectives, and stra-
tegies (Pyburn, 1983, p. 3), plans/planning (Henderson &
Sifonis, 1988; Kearns & Lederer, 2003; Lee et al, 2004; Tan
&Gallupe, 2006), and orientation (Chan et al, 1997; Chen,
2010). Some researchers then emphasized a two-way link
between business and IT strategies where IT strategy could
also inuence the business strategy (e.g., Teo &King, 1997;
Piccoli & Ives, 2005).
Similar to the expansion of the phrase strategy sets, the
term link in Kings original denition has grown more
nuanced since the 1970s. Some of the more recently
introduced terms that describe this link (Luftman &
Ben-Zvi, 2010, p. 51) include alignment (e.g., Sabherwal
Figure 1 Henderson & Venkatramans (1999, p. 476) strategic alignment model.
& Kirs, 1994; Chan et al, 1997; Tallon et al, 2000; Kearns &
Lederer, 2003), interrelated (Tan & Gallupe, 2006), and
harmony (Chen, 2010). Taken together, the focus of
Kings (and other similar researchers) work focuses on
bringing IT and business strategies into agreement. This
type of alignment is referred to as strategic or intellectual
alignment (Reich & Benbasat, 1996, 2000; Chan & Reich,
2007), which is dened as the link between business
strategy and I/T strategy reecting the external compo-
nents (Henderson & Venkatraman, 1999, p. 476).
Operational alignment
In the early 1990s, IT strategy research expanded in scope
to consider the corresponding internal domains of align-
ment (Henderson & Venkatraman, 1999, p. 476), which
refers to the alignment between the business and IT
infrastructures and processes (Lee & Leifer, 1992).
Henderson & Venkatraman (1999) considered three
components as illustrated in Figure 1: administrative
infrastructure/architectures, processes, and skills. More
specically, these include policies (e.g., employee hiring
or security), procedures (e.g., customer service or work
ow), personnel (e.g., existing employees), systems (e.g.,
data center operations), structure (e.g., centralization vs
decentralization), and activities (e.g., product/IT develop-
ment) (Henderson & Venkatraman, 1999; Barua et al,
2004; Heim & Peng, 2010). Therefore, this alignment type
depends on managements ability to integrate the infra-
structures and processes of the business and IT rather than
aligning distinct sets of strategies.
Researchers further rened Lee and Leifers (1992) refer-
ence to alignment through the 2010s by including terms
such as coordinating (e.g., Brown, 1999), t (e.g., Barua
et al, 2004; Thrasher et al, 2006; Cragg et al, 2007),
integration (e.g., Kang et al, 2008; Lee et al, 2008), and
extent of adoption (e.g., Heim & Peng, 2010). Across
papers, research examined similar aspects of operational
alignment which refers to the corresponding internal
domains, namely, the link between organizational infra-
structure and processes and I/S infrastructure and pro-
cesses (Henderson & Venkatraman, 1999, p. 476).
Cross-domain alignment
While intellectual and operational alignment examine
linkages at the same level (i.e., strategy to strategy or
infrastructure to infrastructure, respectively), cross-
domain alignment research addresses a more holistic
view of alignment by considering the strategy and infra-
structure components simultaneously (Henderson &
Venkatraman, 1999, p. 477; Sabherwal et al, 2001, p. 195).
This is important since business strategy changes may
require alignment of the business/IT infrastructure and
processes (e.g., Main & Short, 1989; Broadbent et al, 1999)
or IT strategy changes may require alignment of the
business/IT infrastructure and processes (e.g., Jordan &
Tricker, 1995).
Henderson & Venkatraman (1993) elaborated on four
unique cross-domain combinations of strategy and infra-
structure: strategy execution, technology transformation,
competitive potential, and service level. Strategy execution
is where the business strategy impacts the IT infrastructure
(business strategy-to-IT infrastructure cross-domain align-
ment) but is constrained by the business infrastructure
(business alignment). Technology transformation is where
the IT infrastructure is affected by the business strategy
(business strategy-to-IT infrastructure cross-domain align-
ment) but is constrained by the IT strategy (IT alignment).
Competitive potential is where the business infrastructure
is affected by the IT strategy (IT strategy-to-business infra-
structure cross-domain alignment) but is constrained by
the business strategy (business alignment). Service level is
where the IT strategy impacts the business infrastructure
(IT strategy-to-business infrastructure cross-domain align-
ment) but is constrained by the IT infrastructure (IT
alignment).
Taken together, cross-domain IT strategy research sug-
gests that some rms may pursue alignment of the total
organization (Ling et al, 2009) such that there is a simulta-
neous t (e.g., Chan & Reich, 2007; Chen et al, 2010),
creation (e.g., Wijnhoven et al, 2006; Huang & Hu, 2007),
harmony (e.g., Luftman et al, 1993), collaboration
(e.g., Baets, 1996), or integration (e.g., van der Zee & de
Jong, 1999) between business strategy, IT strategy, busi-
ness infrastructures, and IT infrastructures (e.g., Karimi &
Konsynski, 1991; Porra et al, 2005). Henderson &
Venkatraman (1993) refer to this as a recognition of
multivariate relationships (p. 477) or cross-domain align-
ment, which is the degree of t and integration among
business strategy, IT strategy, business infrastructure, and
IT infrastructure (Henderson &Venkatraman, 1999; Chan
& Reich, 2007, p. 300).
Using SAM as a framework
While empirical studies often reference SAM when oper-
ationalizing alignment (Ravishankar et al, 2011), many
researchers view SAM as simply a high-level conceptual
map that is weak and has no practical real-world applica-
tion (e.g., Hu & Huang, 2006; Luftman et al, 2008). While
drawing on assumptions of SAM (Huang & Lin, 2006;
Chan & Reich, 2007, p. 303), researchers have offered
distinct operationalizations that extend SAM to many
different organizational contexts (e.g., Broadbent & Weill,
1993; Luftman et al, 1993; Baets, 1996). As a result, the
alignment literature is littered with dozens of denitions
for the types of alignment, potentially compromising the
original organizing power of SAM.
Since case study research has shown SAM accurately
reects alignment concepts used in modern businesses
(Cooper et al, 2000; Avison et al, 2004), we seek to
demonstrate SAM is empirically testable as well as pos-
sesses practical relevance. In particular, Henderson &
Venkatraman (1993) were among the rst to discuss
IT alignment as a continuous and dynamic process
necessary for rms to adapt and change in response
to the environment (consistent with Mintzbergs (1994)
conceptualization of planning as a learning process). Their
conceptualization of cross-domain alignment directed
attention to the simultaneous development of IT strategy
with the business strategy. Since then, contemporary
researchers have emphasized this dynamic view when
discussing alignment as a moving target (Avison et al,
2004, p. 229; Ravishankar et al, 2011, p. 40) that needs to
be constantly renewed and adjusted to respond to an ever-
changing and hypercompetitive business environment
(Baker et al, 2011; McLaren et al, 2011; Guillemette &
Pare, 2012).
SAMalso remains relevant to practice because it provides
rms guidance for why a exible level of alignment
enables them to take advantage of opportunities afforded
by dynamic marketplaces (Avison et al, 2004; Ravishankar
et al, 2011). To create this exibility, academics suggest
that alignment between business strategies, IT strategies,
business process, and IT processes should be coevolution-
ary and simultaneous rather than rigid and sequential
(e.g., Ke & Alexandre-Leclair, 2009; Baker et al, 2011).
Two main frameworks support the importance of exibil-
ity: the Dynamic Capabilities Framework and the Coevo-
lutionary Perspective. First, dynamic capability refers to
the rms ability to integrate, build, and recongure
internal and external competencies to address rapidly
changing environments [in order] to achieve new and
innovative forms of competitive advantage (Teece et al,
1997, p. 516). In particular, this perspective emphasizes
capabilities, such as alignment, can be developed inten-
tionally over time rather than acquired (Baker et al, 2011).
As such, alignment can be used to maintain exibility in
the rms business and IT strategies and processes in
response to environmental changes (Schwarz et al, 2010;
Baker et al, 2011).
Second, coevolution is the joint outcome of managerial
intentionality, environment, and institutional effects
[such that] change may occur in all interacting popula-
tions of organizations (Lewin & Volberda, 1999, p. 526).
In particular, the coevolution perspective emphasizes busi-
ness and IT must continually adjust to each other, result-
ing in alignment that is often complex and undened
(Peppard & Breu, 2003; Zhang et al, 2011). As such, rms
address mist between IT and business by continually
rening their business and IT strategies and processes
(Kearns & Lederer, 2003; Oh & Pinsonneault, 2007;
Tiwana & Konsynski, 2010).
In summary, the Dynamic Capabilities Framework and
the Coevolutionary Perspective suggest rms need to con-
stantly adjust to the changing business environment by
developing the capability to adapt and match strategies to
processes. By doing so, rms may realize an alignment
over time (Peppard & Breu, 2003, p. 745; Lee et al, 2008).
SAM works well with these two perspectives because SAM
(a) differentiates the external (i.e., strategy) and internal
(i.e., infrastructure) choices rms need to make and (b)
emphasizes these choices change over time and necessi-
tate subsequent responses in other domains such that
alignment is not an event but a process of continuous
Figure 2 Measure development process.
Source: Moore & Benbasat (1991).
adaptation and change (Henderson & Venkatraman,
1999, p. 473). By distinguishing the different types of
alignment and deriving measures consistent with their
conceptualization, we can determine how dynamic align-
ment may affect nancial performance (Henderson &
Venkatraman, 1999; Tallon et al, 2000) and can strengthen
understanding of alignment and deepen understanding of
alignments impact on nancial performance (see Dong
et al, 2009 for a similar approach), where nancial perfor-
mance is dened as the rms ability to gain competitive
advantage and therefore higher prots or stock values
(Hitt & Brynjolfsson, 1996, p. 123).
Instrument development process
To develop measures of the distinct forms of alignment
identied in SAM, we implemented the three broad instru-
ment development stages (i.e., Item Creation, Scale Devel-
opment, and Instrument Testing) employed by Moore &
Benbasat (1991) and detailed by MacKenzie et al (2011).
Figure 2 is an illustration of the specic process we
followed.
After dening our constructs, we began by creating
pools of items for the types of alignment by identifying
potentially acceptable items from existing scales as well as
creating new items that appeared to t the construct
denitions. For intellectual alignment, we adapted items
from Segars & Grover (1998) as these items have been
commonly used by other researchers studying the align-
ment between IT and business strategies. For operational
alignment, we adapted items from Lee et al (2008) and
Hong & Kim (2002). We also adapted some Segars &
Grover (1998) items to apply to alignment between IT
and business infrastructures and processes. For cross-
domain alignment, we adapted items from Hung et al
(2010), Gupta et al (1997), Sanchez Ortiz (2003) and
adapted the intellectual and operational alignment items
to apply to the alignment of strategies and infrastructure/
processes for all four types of cross-domain alignment.
We undertook four unique rounds of Q-sorts since they
are considered one of the best methods to assess content
validity for formative constructs (Petter et al, 2007,
p. 639). Following the procedure of Moore & Benbasat
(1991) for sorting newly created and existing items into
common pool of items that should be associated with the
various constructs, we used fresh participants for each
round: 7 academic judges and 3 practitioner judges for
the rst round, 4 academic judges for the second round, 29
undergraduate business students for the third round, and
5 Management Ph.D. students and 3 Management Ph.D.s
as judges for the fourth round. The judges in each round
were asked to sort the randomized items based on the
construct denitions we provided but were given liberty to
either not sort the item or choose an other or n/a
classication. If the judges consistently placed an item
within a particular construct pool, it was considered to
demonstrate content validity (Moore & Benbasat, 1991;
Churchill, 1979). Potentially, this indicates the items
demonstrate convergent validity with the related con-
struct and discriminant validity with the other two con-
structs. On the basis of participants feedback and their
apparent difculty in distinguishing the different types of
alignment, we updated the denition of cross-domain
alignment used in our stem (i.e., item lead-in phrase like
In the following items, think about ) to differentiate it
from intellectual and operational alignment and added
denitions for business and IT alignment (other compo-
nents of cross-domain alignment) as shown in Table 1.
After each round, we reworded items to make them
consistent with contemporary language used to describe
technology (e.g., IS was changed to IT in the Segars &
Grover, 1998 items) as well as to make them clearer and
more internally consistent. These changes resulted in
items that differed substantially from the initial pool of
Table 1 Alignment denitions
Construct New definition
Business alignment Refers to the level of alignment in the BUSINESS and is the degree to which the higher level,
externally focused business strategies are aligned with the lower level, internally focused
business infrastructure and processes
Cross-domain alignment (business strategy to IT
infrastructure and processes)
Refers to all aspects of BRIDGING higher level, externally focused strategies with lower level,
internally focused infrastructure and processes. This includes howthe business strategy aligns
with the IT infrastructure and processes
Cross-domain alignment (IT strategy to business
infrastructure and processes)
Refers to all aspects of BRIDGING higher level, externally focused strategies with lower level,
internally focused infrastructure and processes. This includes how the IT strategy aligns with
the business infrastructure and processes
Intellectual alignment Refers to the higher level, externally focused STRATEGIC level of alignment and deals with
how business strategy supports and is supported by the IT strategy
IT alignment Refers to the level of alignment in INFORMATION TECHNOLOGY (IT) and is the degree to
which the higher level, externally focused IT strategies are aligned with the lower level,
internally focused IT infrastructure and processes
Operational alignment Refers to the lower level, internally focused OPERATIONAL level of alignment and deals with
how the business infrastructure and processes align with the IT infrastructure and processes
items drawn from the literature (see the Appendix for the
nal set of items). The factor structure (Moore &
Benbasat, 1991, p. 201) that emerged from the fourth and
nal round demonstrated high agreement among the
judges (based on a similar high established by Moore &
Benbasat, 1991) (see Table 2). Hence, we concluded that
the development process resulted in scales that demon-
strated content validity for all three main alignment types
with high potential to receive very good reliability
coefcients.
Item-creation strategies
As part of our item creation, we analyzed and compared
two approaches to item creation: domain sampling
(Nunnally, 1967, p. 175) and cognitive processing (Jobe,
2003, p. 219). Domain sampling is the process of dening a
construct (i.e., establishing the domain through a concep-
tual denition) and then selecting or generating a few
individual items that will faithfully capture the established
domain (Nunnally, 1967; Davis, 1989). This is the approach
used to create the alignment scales found in the literature
(e.g., Segars & Grover, 1998 items presented on page 146,
where they created eight items to capture different aspects
of their construct Planning Alignment). This process
favors parsimony (the optimal number of items vs maximal
accuracy), in that the fewest number of items should be
included to validly represent the domain and achieve an
acceptable reliability (Joshi, 1989; Little et al, 1999).
By way of contrast, the cognitive processing approach
conceptualizes the thought-process between the item pre-
sentation and response through probing and cognitive
interviewing of potential participants (Jobe, 2003;
Karabenick et al, 2007). Unlike domain sampling where
researchers delineate the construct domain and then
create a minimum set of representative, individual items
to capture that domain (Joshi, 1989), cognitive processing
takes a gestalt approach by more closely targeting the
perceptions of potential participants and attempting to
capture elements of their environment in the items that
are used to measure the construct of interest (Karabenick
et al, 2007). By including clear construct denitions,
instructions, and examples in the stem to ensure the
options are properly understood, researchers can improve
their measurement validity and reliability with fewer, and
more similar, individual items. For example, Karabenick
et al (2007) favored the item How certain are you that you
could gure out how to do a math assignment on your
own if you miss class? over How condent are you that
you can do even the hardest work in math class? because
the latter only elicited content on personal math ability
while the former captured the desired continued effort in
math.
The differences between these two approaches are
summarized in Table 3.
Table 2 Item placement ratios fourth sorting round
Designed construct pool Participants construct pool Total Target %
IA OA CA CAb BA ITA n/a
Intellectual alignment (IA) 32 3 1 40 80%
Operational alignment (OA) 47 48 97.9%
Cross-domain alignment business Strategy to IT Infrastructure and Processes (CA) 5 33 2 40 82.5%
Cross-domain alignment IT strategy to business infrastructure and processes (CAb) 1 1 34 4 40 85%
Business alignment (BA) 1 21 24 87.5%
IT alignment (ITA) 24 24 100%
Total Item Placements = the total number of items sorted (the sum of the Total column) 216
Hits = adding all the diagonal values (i.e., sorting of the items into the designed construct pools) 191
Overall Hit Ratio = dividing the Hits (correct sorting) by the Total Item Placements (total items sorted) 88.4%
Table 3 Domain sampling vs cognitive processing item-creation approaches
(Little et al, 1999; Jobe, 2003; Lewis et al, 2005)
Domain sampling Cognitive processing
Stem
a
richness Parsimonious (e.g., one- to three-word phrases) Rich, complex, and detailed
Item meaning Imprecise where respondent interpretations may be different
based on their situation
Precise definitions and examples provided in the stem to
guide respondent thinking
Item derivation Subjective creation by the researcher Examples from practice
Item complexity Thoroughly capture the construct Simplified because complexity is captured in the stem
Number of items Many are needed to capture all the dimensions of a broad
construct
Few because complexity is captured in the stem
a
Stems are the theoretical sub-parts of dimensions and are often extracted from a combination of literature review and experience surveys in MIS
studies (Lewis et al, 2005, p. 390); in this case, it refers to the introductory verbiage that applies to the items that follow (e.g., In the following items, think
about ).
Our pre-test of items adapted from the alignment litera-
ture (i.e., domain-sampling items) with a sample of 35
CIOs revealed cross-loadings in the conrmatory factor
analysis (i.e., convergent validity problems) and cross-
factor correlations in the correlation matrix (i.e., discrimi-
nant validity problems). Given these validity problems,
we chose to discard the adapted items created with a
domain-sampling approach and elected to adopt the
cognitive processing approach to create new items for
two reasons (following the approach of Karabenick et al,
2007). First, alignment is a broad construct with many
nuances. For example, operational and cross-domain
alignment include all the rms operations, infrastruc-
tures, and processes. Since this includes a wide range of
activities (e.g., hiring, software purchases, centralization),
it is difcult to capture all the necessary components
consistently and parsimoniously in a few items. Therefore,
we created detailed stems that described specic activities
for the respondents to consider (i.e., before presenting the
items, we provided real-world examples at the top of the
survey page that were designed to improve convergent
validity).
Second, alignment has not been clearly dened in the
literature or in practice. As discussed previously, each
alignment type has numerous denitions in the literature
and is discussed in multiple ways by practitioners.
As a result, it is difcult to determine how respondents
interpret items since their understanding of the
different concepts is questionable. Therefore, we provided
an illustration of SAM to highlight the construct in
question to illustrate how it is different from other align-
ment types.
As shown by our survey in the Appendix, the cognitive
processing approach presents far richer stems to describe
the complex alignment concept as opposed to the simpler
items presented in domain sampling. While the respon-
dent has to take more time reading the extensive deni-
tions and examples in the cognitive processing approach
(i.e., these are longer than the 1-to-3 word stems from
domain sampling), items generated from domain sam-
pling would involve too many concepts and require too
many items to capture the full construct and still maintain
an acceptable validity and reliability (Little et al, 1999;
Karabenick et al, 2007).
Survey administration
We contracted with a reputable data collection service to
survey a sample of CIOs with veried identities and job
responsibilities. We then analyzed the reliability and
validity (i.e., discriminant and convergent) of the items,
tested for predictive validity including mediation tests,
and analyzed our measures inuence vis a vis well-estab-
lished control variables to situate types of alignment
within the broader nomological net (i.e., internal validity).
We provide detail on this process in the following
paragraphs.
Research design
Research Now, a national market research rm, adminis-
tered our survey. Research Now provides access to respon-
dents whose roles within organizations are veried. This
data collection approach is used in management research
(e.g., Porter & Donthu, 2008) and MIS research (e.g., Sun,
2012). We used Research Now to elicit responses fromCIOs,
because the CIO plays a key role in alignment decisions
regarding IT, has an eye on the external environment due
to an upper-level management position, and is well posi-
tioned to assess the rms alignment level (Carter et al,
2011). Research Nows CIO panel is comprised of almost
2000 members fairly evenly spread across the United States
(the Southern region has about 200 more members than
the other regions). Reecting the diversity in titles held by
the most senior IT professionals in companies, the CIO
panel includes respondents with titles such as Director of
IT, Vice President of IT, and Chief Technology Ofcer
(Preston & Karahanna, 2009; Banker et al, 2011).
The survey was sent to 1077 CIOs in the Research Now
CIO panel. Of these, 218 panelists clicked on the e-mail to
the survey link page. Eighteen respondents chose not to
enter the survey. In addition, the screening question
eliminated 36 respondents. A total of 140 questionnaires
were completed, resulting in a response rate of 13%. While
this response rate is low, this is consistent with research
conducted on CIOs where response rates typically range
from 7 to 20% (Preston et al, 2006; Oh & Pinsonneault,
2007). Respondents demographic statistics are shown in
Table 4.
Analyses
Reliability, convergent validity, and discriminant validity
analyses
We assessed unidimensionality of the six alignment types
by estimating a conrmatory factor analysis. Like the pre-
test, we used SmartPLS 2.0 (Ringle et al, 2005) to run this
analysis. Table 5 shows satisfactory factor analysis results
since all items loaded higher on their hypothesized con-
structs than on other constructs.
We also estimated the Cronbachs , skewness, and
kurtosis (Noar, 2003) to verify the normal distribution of
each construct. Table 6 reveals satisfactory levels and no
non-normality problems. Taken together, these results
indicate that the six alignment types and nancial perfor-
mance are normally distributed such that the statistical
tests we used are appropriate in this study.
For convergent validity, we evaluated the loading of
each item onto their specied factor (Chin & Frye, 1996).
First, we compared the coefcients for the indicators with
the standard errors, where the loadings should be at least
twice as much as the standard error (Anderson & Gerbing,
1988). Second, a t-statistic of 1.65 or higher suggests the
item loading is signicant at 0.05 (n=140). All the load-
ings are signicant as illustrated in Table 7.
Then, we evaluated discriminant validity. We entered all
rst-order factors in a correlation matrix. Then, we
compared cross-factor correlations against the square root
of the average variance extracted (AVE) of each factor
(Chin & Frye, 1996). If the cross-factor correlation exceeds
the square root of the AVE, there may be a lack of
discriminant validity. The correlation matrixes illustrated
in Table 8 indicate that there are some high cross-factor
correlations between cross-domain alignment and opera-
tional alignment, suggesting that there may be discrimi-
nant validity issues between these two constructs.
However, our Q-sorts and pre-tests indicated that cross-
domain alignment was conceptually distinct from the
other types of alignment. Also, given that our AVE was
higher than the inter-construct correlations, evidence
suggests that the constructs were discriminant (Chin,
1998). Across our factor analysis, reliability calculations,
and item-level discriminant validity tests, we found evi-
dence that our measures were discriminant.
Predictive validity
Predictive validity, subsumed in construct validity, ensures
that our constructs demonstrate relationships consistent
with theory and correlate with or predict a given outcome
variable (Straub et al, 2004, p. 398). To establish predictive
validity, we used nancial performance as the dependent
Table 5 Conrmatory factor analysis results
BA CA CAb IA ITA OA PERF
Business alignment
BA1 0.89 0.52 0.50 0.37 0.48 0.50 0.52
BA2 0.73 0.39 0.39 0.23 0.35 0.33 0.40
BA3 0.82 0.45 0.42 0.34 0.42 0.44 0.46
BA4 0.80 0.44 0.41 0.31 0.42 0.40 0.32
BA5 0.79 0.41 0.38 0.24 0.38 0.39 0.35
BA6 0.85 0.46 0.43 0.34 0.40 0.48 0.49
Cross-domain alignment (business Strategy to IT infrastructure and
processes)
CA1 0.46 0.82 0.70 0.56 0.60 0.66 0.26
CA2 0.40 0.80 0.63 0.44 0.56 0.64 0.27
CA3 0.52 0.86 0.68 0.52 0.65 0.75 0.40
CA4 0.46 0.81 0.65 0.50 0.51 0.67 0.33
CA5 0.44 0.85 0.68 0.48 0.61 0.78 0.28
CA6 0.43 0.85 0.70 0.48 0.57 0.75 0.34
Cross-domain alignment (IT strategy to business infrastructure and
processes)
CAb1 0.37 0.66 0.83 0.55 0.64 0.73 0.26
CAb2 0.38 0.61 0.79 0.46 0.63 0.66 0.15
CAb3 0.48 0.67 0.83 0.60 0.60 0.70 0.34
CAb4 0.39 0.67 0.80 0.53 0.63 0.70 0.27
CAb5 0.42 0.71 0.83 0.49 0.70 0.73 0.18
CAb6 0.50 0.68 0.87 0.52 0.60 0.71 0.34
Intellectual alignment
IA1 0.34 0.52 0.54 0.82 0.44 0.51 0.19
IA2 0.44 0.60 0.58 0.85 0.51 0.59 0.32
IA3 0.16 0.38 0.42 0.72 0.35 0.43 0.14
IA4 0.25 0.43 0.47 0.84 0.39 0.49 0.25
IA5 0.27 0.41 0.49 0.73 0.37 0.41 0.21
IA6 0.19 0.43 0.49 0.72 0.36 0.44 0.08
IA7 0.23 0.37 0.49 0.77 0.39 0.46 0.19
IA8 0.35 0.55 0.56 0.82 0.49 0.57 0.23
IT alignment
ITA1 0.42 0.51 0.60 0.40 0.84 0.60 0.18
ITA2 0.44 0.64 0.65 0.48 0.85 0.66 0.21
ITA3 0.44 0.56 0.61 0.41 0.82 0.58 0.19
ITA4 0.46 0.59 0.62 0.50 0.83 0.66 0.20
ITA5 0.40 0.64 0.66 0.47 0.86 0.72 0.14
ITA6 0.33 0.58 0.66 0.43 0.81 0.64 0.15
Operational alignment
OA1 0.41 0.67 0.72 0.50 0.66 0.81 0.21
OA2 0.40 0.59 0.64 0.42 0.61 0.73 0.18
OA3 0.50 0.70 0.68 0.55 0.58 0.82 0.33
OA4 0.34 0.66 0.69 0.51 0.62 0.78 0.20
OA5 0.40 0.76 0.69 0.47 0.60 0.84 0.29
OA6 0.48 0.75 0.74 0.60 0.71 0.87 0.25
Financial performance
PERF1 0.51 0.38 0.32 0.24 0.23 0.33 0.87
PERF2 0.40 0.29 0.28 0.18 0.19 0.26 0.85
PERF3 0.39 0.31 0.26 0.21 0.25 0.23 0.82
PERF4 0.43 0.27 0.22 0.20 0.05 0.19 0.80
PERF5 0.38 0.26 0.19 0.20 0.14 0.22 0.70
PERF6 0.47 0.33 0.28 0.22 0.12 0.29 0.87
PERF7 0.44 0.32 0.29 0.29 0.22 0.24 0.80
PERF8 0.38 0.30 0.31 0.27 0.22 0.26 0.73
The bold values highlight the loadings on the correct construct.
Table 4 Demographic statistics (n=140)
Characteristic Frequency
Gender Male 112
Female 20
Unreported 8
College Education Average =5.42 years
Industry CIO IT
Experience <1 year 3 4 1
15 years 35 45 6
610 years 37 48 18
1115 years 35 21 32
16+ years 27 18 80
Status Direct report to CEO 79
1 level to CEO 51
2+ Levels to CEO 10
Title CIO 64
CTO 18
Director of IT 21
VP of IT 16
Other 21
Age Average =45.16 years
Firm type Public 41
Private 88
Firm size
(revenue in million dollars)
<100 31
101500 30
5011000 24
>1000 29
Industry Manufacturing 45
Service 47
Other 48
variable in the four dominant alignment perspective mod-
els: strategy execution, technology transformation, com-
petitive potential, and service level (Henderson &
Venkatraman, 1999). These models follow a specic logic,
with relationships that are unidirectional in nature: strat-
egy execution is driven by business alignment, which
leads to nancial performance through operational align-
ment; technology transformation is driven by intellectual
alignment, which leads to nancial performance through
IT alignment; competitive potential is driven by intellec-
tual alignment, which leads to nancial performance
through business alignment; service level is driven by IT
alignment, which leads to nancial performance through
operational alignment (Henderson & Venkatraman,
1999). These four models address the dysfunctional con-
sideration of bivariate relationships and recognize the
importance of cross-domain relationships in addition to
intellectual and operational alignment (Henderson &
Venkatraman, 1999, p. 477).
Theory suggests rms with higher levels of alignment
should realize higher long-termprotability, availability of
nancial resources, and sales growth than rms with lower
IT alignment (Cragg et al, 2002; Croteau & Raymond,
2004). In addition, the level of performance may shift
depending on the alignment perspective the rm chooses
(Henderson & Venkatraman, 1999). As such, we included
Table 6 Reliability and normality test results
Construct Reliability
()
a
Mean Standard
deviation
Skewness
(error)
b
Kurtosis
(error)
b
Intellectual alignment 0.91 31.29 4.97 1.61 (0.21) 6.27 (0.41)
Operational alignment 0.90 23.56 3.50 0.54 (0.21) 1.63 (0.41)
Cross-domain alignment business strategy to IT infrastructure and
processes
0.91 23.47 3.72 0.53 (0.21) 1.30 (0.41)
Cross-domain alignment IT strategy to business infrastructure and
processes
0.91 23.48 3.59 0.48 (0.21) 1.09 (0.41)
Business alignment 0.90 23.11 4.96 0.99 (0.21) 2.60 (0.41)
IT alignment 0.91 23.99 3.84 0.74 (0.21) 1.57 (0.41)
Financial performance 0.92 29.21 7.34 1.26 (0.21) 2.98 (0.41)
a
Highly reliable >0.8 or 0.9 (Nunnally, 1978; Cronbach & Shavelson, 2004).
b
Severe nonnormality issues: skewness >2 and kurtosis >7 (Fabrigar et al, 1999).
Table 7 Convergent validity test
a
Item t-value (STERR) Item t-value (STERR) Item t-value (STERR)
Cross-domain alignment (business strategy to IT infrastructure and processes) Operational alignment IT alignment
CA1 21.17 (0.04) OA1 16.51 (0.05) ITA1 12.97 (0.06)
CA2 18.46 (0.04) OA2 10.18 (0.07) ITA2 15.74 (0.05)
CA3 34.36 (0.03) OA3 25.27 (0.03) ITA3 10.54 (0.08)
CA4 18.08 (0.04) OA4 13.34 (0.06) ITA4 11.14 (0.07)
CA5 22.86 (0.04) OA5 26.19 (0.03) ITA5 13.89 (0.06)
CA6 24.30 (0.03) OA6 30.12 (0.03) ITA6 10.60 (0.08)
Cross-domain alignment (IT strategy to business infrastructure and processes) Business Alignment
CAb1 19.76 (0.04) BA1 29.56 (0.03)
CAb2 14.42 (0.05) BA2 9.18 (0.08)
CAb3 25.67 (0.03) BA3 13.97 (0.06)
CAb4 18.92 (0.04) BA4 12.49 (0.06)
CAb5 20.71 (0.04) BA5 10.11 (0.08)
CAb6 29.93 (0.03) BA6 25.01 (0.03)
Intellectual alignment Financial performance
IA1 7.40 (0.11) PERF1 26.12 (0.03)
IA2 8.38 (0.10) PERF2 21.82 (0.04)
IA3 4.51 (0.16) PERF3 16.66 (0.05)
IA4 7.15 (0.12) PERF4 12.71 (0.06)
IA5 7.11 (0.10) PERF5 9.99 (0.07)
IA6 4.37 (0.16) PERF6 36.83 (0.02)
IA7 6.35 (0.12) PERF7 15.31 (0.05)
IA8 7.18 (0.11) PERF8 11.21 (0.06)
a
All significant at 0.05; STERR =Standard Error.
nancial performance in our model to (a) establish that
our measure predicts nancial performance and (b) evalu-
ate whether the relationship between the types of align-
ment and nancial performance varies. The results shown
in Figures 36 demonstrate that our measures signicantly
predict nancial performance, where the competitive
potential perspective has the strongest relationship with
nancial performance (R
2
=28.1%) and the technology
transformation has the weakest (R
2
=5.8%). Given the
signicant alignmentperformance relationship and the
varying relationship between the alignment perspectives
and nancial performance, we found evidence that our
measures have predictive validity.
Sobel test for mediation
To further test for predictive validity and fully test SAM, we
also used Sobels (1982) test for mediation. To test for the
mediation of the six alignment types, we calculated Sobels
(1982) test for mediation using the formula shown in
Equation (1). The results shown in Table 9 indicate
that business, intellectual, and IT alignment do have
mediation effects through operational, IT, and business
alignment in their given models. Therefore, we con-
clude that business alignment has an indirect effect on
nancial performance through operational alignment in
the strategy execution alignment perspective, intellectual
alignment has an indirect effect on nancial perfor-
mance through IT and business alignment in the
technology transformation and competitive potential
alignment perspectives, respectively, and IT alignment
has an indirect effect on nancial performance through
operational alignment in the service-level alignment
perspective.
z - value
a*b
b
2
*s
2
a
+ a
2
*s
2
b

q (1)
Table 8 Construct correlation matrix
a,b,c
BA CA CAb IA ITA OA PERF
Business alignment 0.80
Business strategy to IT infrastructure and processes 0.54 0.83
IT strategy to business infrastructure and processes 0.51 0.81 0.82
Intellectual alignment 0.36 0.60 0.64 0.79
IT alignment 0.49 0.71 0.77 0.53 0.84
Operational alignment 0.49 0.84 0.86 0.62 0.78 0.81
Financial performance 0.51 0.38 0.32 0.27 0.22 0.29 0.81
a
Diagonals = Square-root AVE.
b
Off-diagonals = Correlations.
c
Cross-factor correlations that exceed the AVE (potential lack of discriminant validity).
The bold values highlight the loadings on the correct construct.
Figure 3 Predictive validity results for strategy execution.
Internal validity analysis: control variable results
To more rigorously assess predictive validity, we included
variables that capture noise in the broader nomological
net surrounding business-IT alignment and performance
relationship. By including rm demographics such as rm
age (number of years since founded), rm size (measured
in terms of employees and revenues), and rmtype (public
vs private) (Powell, 1992; Armstrong & Sambamurthy,
1999; Cragg et al, 2002; Chan et al, 2006) and IT
department demographics such as IT department size (the
number of IT employees), IT spending (the percentage of
revenue spent on IT), and IT department (number of years
since founded) (Karimi et al, 2000; Teo et al, 2003; Li et al,
2006), we could isolate our measures ability to predict
alignments relationship with performance. Even when
these control variables were entered, we found that
the alignmentperformance relationship was largely
unchanged (less for rm size (revenue) and rm type) as
Figure 4 Predictive validity results for technology transformation.
Figure 5 Predictive validity results for competitive potential.
shown in Table 10. This provides further evidence of the
robustness of our alignment measures.
Limitations
As with all research, it is important to note the limitations
of our work. First, we followed a cognitive processing
approach to developing our items. While the items use
broad terminology (i.e., strategies, infrastructures, pro-
cesses), the stems were designed to target specic concepts
(e.g., business strategy = business competing in the
market; business infrastructure and processes = internal
business policies, procedures, personnel, and structure). By
doing so, we ensured that respondents interpreted items in
the way we intended. However, cognitive sampling
requires more extensive reading and reection on the
items meaning than for simpler constructs such as ease of
use; this can lead to fatigue, as well as increase common-
method bias. Therefore, to avoid respondent fatigue, we
recommend future researchers collect data using the align-
ment measures most germane to their investigation.
Second, we only surveyed CIOs. Studies often cite their
use of single respondents as problematic due to common
source bias (e.g., Lai et al, 2009). Although this concern can
be addressed by using multiple respondents in the same
rm (Teo & King, 1996), collecting data from two sources
at the executive level is quite difcult (Chan et al, 1997)
and could compromise the anonymity of the question-
naire (Podsakoff et al, 2003; Kearns & Sabherwal, 2006). In
addition, subjectivity and measurement error are still a
possibility even for matched pairs (Tallon, 2007b). None-
theless, while we are condent in our measures, we believe
future work that assesses their psychometric properties
using matched pairs and in diverse populations may
provide additional insight into their usefulness.
Like all behavioral research studies, common-method
bias threatens the validity of our study (Podsakoff et al,
2003). Following the techniques described by Podsakoff et
al (2003), we tried to control for common-method bias
through the design of our studys procedures and through
statistical controls. Procedural remedies help control com-
mon-method bias by identifying the connection between
the measures of the predictor and dependent variables and
then eliminating or minimizing these common character-
istics by carefully designing the study (Podsakoff et al,
2003). We employed two procedural remedies to try to
control the inuence of common-method bias: psycholo-
gical separation of measurement (i.e., our cover letter did
not tie alignment to performance and we physically
separated the alignment and performance measures in the
survey) and protecting respondent anonymity/reducing
evaluation apprehension (i.e., we never identied the
respondents by name or company).
We also conducted two statistical remedies to control for
common-method bias. First, we used a Harman one-factor
Figure 6 Predictive validity results for service level.
Table 9 Sobel test
Alignment perspective z-value P-value a b s
a
s
b
Strategy execution 3.27 <0.001 0.53 0.31 0.12 0.07
Technology transformation 2.91 0.01 0.53 0.24 0.13 0.06
Competitive potential 2.90 0.01 0.39 0.53 0.13 0.05
Service level 4.56 <0.001 0.78 0.31 0.04 0.06
a = coefficient of the independent variable to the mediator variable;
b = coefficient of the mediator variable to the dependent variable;
s = standard error of the coefficient.
test (Harman, 1976; Malhotra et al, 2006) and found no
single factor accounted for a majority of the covariance
(the factors accounted for 70.42% of the variance with the
rst factor accounting for 34.97%), which suggests com-
mon-method bias might not pose a severe threat to the
validity of our study (Harman, 1976). In addition, we used
Lindell & Whitneys (2001) correlation marker technique,
which uses a marker variable (i.e., a theoretically unrelated
variable) to adjust the correlations of the models core
constructs (Lindell & Whitney, 2001). We did not nd
high correlations between the common-method bias
variable and any of the models core constructs and found
our signicant correlations remained signicant. Having
used these procedural and statistical controls for common-
method bias, we posit that common-method bias was not
particularly problematic in our study even though we
acknowledge that there are limitations to the techniques
we used to test for common-method bias (see Chin et al,
2012 for details on the problems associated with latent
method construct approaches).
Finally, although we attempted to develop scales for
cross-domain alignment, two cross-domain alignment
measures (i.e., Business Strategy to IT Infrastructure and
Processes and IT Strategy to Business Infrastructure and
Processes) were confounded with the other types of align-
ment. While the sorting exercises and pre-tests indicated
that these two cross-domain alignment types were con-
ceptually distinct from the other types of alignment, and
while their scales have good reliability, the factor analysis
from our pre-test grouped these two cross-domain align-
ment types with intellectual and operational alignment.
Furthermore, analysis of the correlation tables indicates
that these two cross-domain alignment types had poten-
tial discriminant validity issues with intellectual and
operational alignment in the pre-test and with operational
alignment in the nal study (as shown in Table 8). How-
ever, we note that the other two types of cross-domain
alignment (i.e., business and IT alignment) exhibit satis-
factory reliability and validity in all tests. We discuss this
further in the next section.
Discussion and implications
Contributions to practice
This study offers three implications for practice. First,
cross-domain alignment is associated with higher levels of
nancial performance as indicated by the signicant cor-
relations between IT/business alignment and nancial
performance for three of the four alignment perspectives
(all but Service Level as shown in Figure 6). This suggests
that rms pursuing alignment of strategies and infrastruc-
tures may experience supranormal prots and may be
able to achieve a sustainable competitive advantage.
Second, aligning business and IT strategies (i.e., intellec-
tual alignment) and business strategies and infrastructure
(i.e., business alignment) is more closely associated with
higher levels of nancial performance than other align-
ment combinations examined in this study (as indicated
by the Competitive Potential results in Figure 5). This
suggests that rms may not need to place as much
emphasis on aligning their IT infrastructure with the
other three alignment components to see higher levels of
nancial performance. Finally, aligning business and IT
strategies (i.e., intellectual alignment) alone is not asso-
ciated with higher levels of nancial performance
(as indicated by the results from the Sobel test). This
suggests rms may need to consider how they can align
their infrastructure with their strategy to see improve-
ments in their performance.
Contributions to research
In addition to the contributions to practice, our ndings
also have implications for research. First, cross-domain
alignment has been largely neglected in the literature with
regard to denitions and measurement. While Henderson
& Venkatraman (1993) dened intellectual and opera-
tional alignment with a fair amount of precision, they
gave cross-domain alignment a broad denition to capture
anything that crosses the strategy-infrastructure domains.
As such, the four unique types of cross-domain alignment
were not dened and research since that time has not
clearly differentiated these alignment types. We found 9
studies that empirically examined cross-domain align-
ment (of the 175 alignment studies mentioned earlier). Of
these studies, none considered business or IT alignment.
We also could not nd any studies that specically dened
or measured the unique cross-domain types from business
strategy to IT infrastructure or IT strategy to business
infrastructure; instead, they used a broad denition of
cross-domain alignment (i.e., aligning strategies and infra-
structures or processes). As such, this is the rst study that
Table 10 Control variable results
Model (alignment perspective) coefficient
Firm age Firm size (employees) Firm size (revenue) Firm type IT age IT spending IT size
Strategy execution 0.11 0.03 0.19* 0.22* 0.09 0.10 0.01
Technology transformation 0.11 0.01 0.20* 0.23* 0.09 0.13 0.05
Competitive potential 0.04 0.06 0.26* 0.16* 0.09 0.07 0.09
Service level 0.11 0.03 0.19* 0.22* 0.09 0.10 0.02
*significant at 0.05.
has attempted to demarcate these four cross-domain align-
ment types.
Through our item development process, we were able to
clarify and rene the denitions of the types of alignment.
The development steps showed that the existing align-
ment denitions made it hard to conceptually distinguish
between the different types such that it was confusing to
determine what was and was not included in the deni-
tion of each type of alignment. As a result, we expanded
the denitions to specify the level of analysis. For example,
we created more precise denitions that established intel-
lectual alignment as the higher level, externally focused
STRATEGIC level of alignment as opposed to the lower
level, internally focused, OPERATIONAL level for opera-
tional alignment. We also ensured that each denition
clearly specied the components that were being aligned.
For example, business alignment includes the alignment
of business strategy and business infrastructure/processes.
Therefore, our denition makes reference to both of these
boxes in that the higher level, externally focused business
strategies are aligned with the lower level, internally
focused business infrastructure and processes. These changes
highlight the focus of each type of alignment such that
one can clearly determine which components of align-
ment are under consideration.
By creating comprehensive denitions that clearly spe-
cify the components of each type of alignment, future
researchers will be able to utilize items that clearly cover
the domain of interest, can test the adequacy of each
alignment measure, have a strong foundation on which
to build future alignment research, and can compare
results across studies since they can be condent that they
are examining the same construct. Specically, we recom-
mend that future researchers consider the context of their
study and then pick the type of alignment that is most
suited to that situation. For example, operational align-
ment may be more important in manufacturing rms
while IT alignment may be more critical in technology
rms. Since we found public or private rm type was a
signicant control variable in our models, it may be
interesting to compare the strength of the alignment
performance relationship based on public or private sector,
specic industries, or performance goals.
Second, the study contributes to the literature by devel-
oping an overall instrument to measure the various types
of alignment. The instrument development process
included surveying known existing instruments, adapting
appropriate items, creating new items using the cognitive
processing approach, and undertaking an extensive scale
development process based on the procedures employed
by Moore & Benbasat (1991) and described by MacKenzie
et al (2011). Due to the rigor of our process, our measures
demonstrated a high degree of content and construct
validity as illustrated in Table 11 (Moore & Benbasat,
1991; MacKenzie et al, 2011). Specically, our study
yielded a 38-item instrument that measures 6 alignment
types, all with acceptable levels of reliability. To establish
their predictive validity, we examined how the different
alignment types inuence nancial performance. To
further an understanding of alignments nomological net,
we recommend future researchers employ our measures to
examine other dimensions of rm performance such as
productivity or customer benet since different industries
or rms often have different performance goals (Deming,
1986) such that manufacturers may be more interested in
productivity whereas retailers may consider customer ben-
ets more important.
In addition, it is also important to consider other
constructs in alignments nomological network. First,
environmental turbulence (i.e., uncertainty) may impact
a rms ability to align (e.g., Bergeron et al, 2001; Chang
et al, 2008; Huang, 2009). Second, IT investments may be
necessary to support and enable alignment of IT with the
business (e.g., Kearns & Lederer, 2004; Byrd et al, 2006;
Schwarz et al, 2010). Third, alignment may be contingent
upon the rms strategy (e.g., Palmer & Markus, 2000;
Chan et al, 2006; Raymond & Croteau, 2006). Fourth,
governance structure (e.g., authority structure) may facil-
itate alignment success (e.g., Bergeron et al, 2001; Oh &
Pinsonneault, 2007; Lee et al, 2008; Yayla, 2008). Finally,
people, commitments, and communication (i.e., social
alignment) may be the foundation for establishing align-
ment (e.g., Kearns & Lederer, 2003; Celuch et al, 2007;
Taipala, 2008). Taken together, it may be useful to evaluate
an omnibus model that integrates all the constructs in
alignments nomological network in addition to the six
Table 11 Construct development test results
Analysis Test Test result
Content validity Four Q-sorts High agreement among the judgesEstablished
Reliability Cronbachs Established (over 0.8 and 0.9)
Normality Skewness, kurtosis Normal (skewness >2, kurtosis >7)
Convergent
validity
Factor analysis; t-statistic Satisfactory loadings ( >2 times standard error) and significant
Discriminant
validity
Cross-factor correlation Cross-domain and operational alignment correlations high but otherwise
established
Predictive validity Sobel test Mediation exists
Modeled with dependent and control
variables
Established
alignment types and their relationships with all three
dimensions of rm performance.
Despite the care we took to develop measures consistent
with Henderson & Venkatramans (1993) conceptual de-
nitions, our nding suggests an opportunity for additional
conceptual and empirical work on two of the four cross-
domain alignment constructs that did not exhibit strong
properties of discriminant validity. Specically, these two
cross-domain alignment types each deal with the bridge
between business strategy and IT infrastructure and pro-
cesses (CA) and IT strategy and business infrastructure and
processes (CAb). Interestingly, these confounded dimen-
sions are subsumed in the four dominant alignment
perspectives described by Henderson & Venkatraman
(1993) such that they are contingent upon the type of
alignment perspective selected. On one hand, CA must be
in place for strategy execution and technology transforma-
tion. On the other, CAb must be in place for competitive
potential and service level. As such, it is possible that
respondents conceptually understand the difference
between these two confounded cross-domain alignment
constructs and the other types of alignment but cannot
differentiate them based on the activities in their rms
(Henderson & Venkatraman, 1999). For example, rms
that use their business strategy to drive their business and
IT infrastructures and processes will naturally employ
cross-domain alignment (specically, CA) in addition to
business and operational alignment (i.e., the strategy
execution alignment perspective). However, the respon-
dent may not always recognize a distinct link between the
business strategy and IT infrastructures and processes
because business and operational alignment subsumes
that link (Henderson & Venkatraman, 1999). As such,
future researchers may need to consider these two cross-
domain alignment types as higher order constructs that
result from the pursuit of one of the four dominant
alignment perspectives.
Finally, alignment researchers have emphasized the
importance of predicting nancial performance (Tallon,
2003; Barua et al, 2004). In this study, we found that the
competitive potential alignment perspective (comprised of
intellectual and business alignment) explains 28.1% of the
variance in nancial performance. This suggests that
the alignment of business and IT strategies followed by
the alignment of the business strategies and infrastructure/
processes may be important for enhancing nancial per-
formance. To a lesser extent, the strategy execution
alignment perspective (i.e., business and operational align-
ment) and the service-level alignment perspective (i.e., IT
and operational alignment) explain 9.7 and 9.3% of the
variance in nancial performance, respectively. This indi-
cates that the alignment of business and IT infrastructures/
processes can follow either business alignment (where
the business strategies and business infrastructures/
processes are aligned with each other) or IT alignment
(where the IT strategies and IT infrastructures/processes
are aligned with each other), with the similar effects
on nancial performance. Finally, the technology
transformation alignment perspective (comprised of intel-
lectual and IT alignment) explains only 5.8% of the
variance in nancial performance. This supports existing
research that asserts IT has a lesser impact on the nancial
performance of the rm (Cooper et al, 2000; Roepke et al,
2000).
Our tests of predictive validity suggest that while IT is
important in the overall process (e.g., IT should align with
the business), it is not by itself critical to the nancial
success of the rm. Only by clearly specifying the domain
of each type of alignment can researchers compare the
relationships between the different alignment types and
performance more precisely. Specically, future research-
ers should try to determine the reasons behind the rela-
tionship differences between the cross-domain alignment
perspectives and nancial performance. For example,
researchers may need to engage in longitudinal research
to determine the sequence of alignment processes that
need to occur to generate certain levels of nancial perfor-
mance (e.g., IT strategy should be aligned with business
strategy before the rm engages in alignment of the IT
infrastructures and processes). In turn, this will help
researchers provide straightforward directions to practi-
tioners for each type of alignment.
Conclusion
This paper was motivated by a desire to facilitate the
development of a cumulative research tradition in the
alignment literature. We realized our threefold objective.
First, we clearly dened the six alignment types and
created a robust alignment framework by building upon
Henderson & Venkatramans (1993) SAM. Specically, we
created consistent denitions for six types of alignment by
clearly specifying the level of analysis (i.e., strategic vs
operational) and by capturing the content of the compo-
nents being aligned (i.e., strategy vs infrastructure and
processes). This is particularly important to ensure that
we are adequately dening alignment such that we can
clearly differentiate it from other constructs and alleviate
any confusion about what is or is not included in the
construct denition.
Second, we created and statistically evaluated opera-
tional measures for each alignment type to create rigorous
measures. Specically, we created a 38-item instrument (8
items for intellectual alignment and 6 items for each of the
other alignment types) that gives future researchers a
useful tool for studying the 6 types of alignment and their
relationship with other constructs such as nancial perfor-
mance. By using this overall alignment measure (or a
subset of it), future alignment researchers will be able to
evaluate alignment in a variety of contexts so they can
draw conclusions that are more consistent across studies,
resulting in clearer direction for practitioners.
Finally, we tested the alignmentperformance relation-
ship to explore the alignment paradox and the empirical
validity of SAM. Specically, we tested the relationship
between the four cross-domain alignment perspectives
presented by Henderson & Venkatraman (1999) and
nancial performance. By testing these models, we found
these four dominant alignment perspectives are positively
related to nancial performance. As such, future research-
ers should consider the four types of cross-domain
alignment in addition to intellectual and opera-
tional alignment when examining the relationship
between alignment and performance; in addition, they
may nd that SAM is a useful model for including all six
alignment types.
About the Authors
Jennifer E. Gerowis an Assistant Professor in the Econom-
ics and Business department at Virginia Military Institute.
She holds a B.S. in Biological Sciences with a minor in
Secondary Education, an M.B.A., and a Ph.D. in Manage-
ment (Concentration: Information Systems) from Clem-
son University. Her research interests are power and
politics in the workplace, IT-business strategic alignment,
and drivers of IT use/resistance. She has previously pub-
lished in the European Journal of Information Systems,
Computers in Human Behavior, Journal of Information Tech-
nology Theory and Application, the Journal of Service Science &
Management, and the proceedings of various conferences.
Jason Bennett Thatcher directs the Social Analytics Insti-
tute and is a Professor of Information Systems in the
Department of Management at Clemson University.
He holds B.A.s inHistory (CumLaude) and Political Science
(Cum Laude) from the University of Utah as well as a
M.P.A. from the Askew School of Public Administration
and Policy and a Ph.D. in Business Administration from
the College of Business at Florida State University. His
work appears in MIS Quarterly, Journal of the AIS, Journal of
Applied Psychology, Organizational Behavior and Human
Decision Processes, Journal of Management Information
Systems, European Journal of Information Systems, and
IEEE Transactions on Engineering Management. He lives in
Greenville, South Carolina where he reads Garden and
Gun, sips bourbon, and smokes BBQ.
Varun Grover is the William S. Lee (Duke Energy) Distin-
guished Professor of Information Systems at Clemson
University. He has published extensively in the informa-
tion systems eld, with over 200 publications in major
refereed journals. Nine recent articles have ranked him
among the top four researchers based on number of
publications in the top Information Systems journals, as
well as citation impact (h-index). He is Senior Editor for
MISQ Executive, and Senior Editor (Emeritus) for MIS
Quarterly, the Journal of the AIS and Database. He is
currently working in the areas of IT value, system politics,
and process transformation and recently released his third
book (with M. Lynne Markus) on process change. He is
recipient of numerous awards from USC, Clemson, AIS,
DSI, Anbar, PriceWaterhouse and so on for his research
and teaching and is a Fellow of the Association for
Information Systems.
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Appendix
Survey
Description of the research and your participation
You are invited to participate in a research study con-
ducted by Jennifer Gerow, Varun Grover, and Jason
Thatcher. The purpose of this research is to determine
what factors inuence the CIOs impact on the strategic
and technical decisions of the rm. You participation will
involve the evaluation of your behavior and the behavior
of the executive team members in your rm. The amount
of time required for your participation will be 1015 min
answering questions on a web survey. This research is
anonymous and no answer will be tied to you or your rm;
in addition, there are no known risks associated with this
research.
Benets to the participating individual
The goal of this research is to empower CIOs like you to
more positively inuence your rms top-level decision
makers. The research team will be happy to provide the
results to any interested individual. The comprehensive
report will provide an interpretation of data collected,
visual presentation, and recommendations. This report
will include an analysis of CIO perceptions of executive
team behaviors. All monetary benets will be provided by
the company in charge of the panel.
Condentiality
All data will be collected and maintained under strict
standards to ensure the condentiality of individual iden-
tities. No individual can be linked to his/her responses by
anyone on the research team at any time.
Voluntary participation
Your participation in this research study is voluntary. You
may choose not to participate and you may withdraw your
consent to participate at any time. You will not be
penalized in any way should you decide not to participate
or to withdraw from this study.
Are you currently the head of your IT department
(in other words, a CIO, VP of IT, or Director of IT)?
Yes
No

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