Schniederjans and Cao (2009) - Alignment of Operations Strategy, Information Strategic, and Performance. An Empirical Study

International Journal of Production Research
Vol. 47, No. 10, 15 May 2009, 25352563
Alignment of operations strategy, information strategic

orientation, and performance: an empirical study
M. Schniederjans*a and Q. Caob
a
University of Nebraska-Lincoln, Lincoln, NE 68588-0491, USA; bManagement Information Systems,
H.W. Bloch School of Business, University of Missouri-Kansas City, Bloch 230,
5110 Cherry Street, Kansas City, MO 64110-2499
(Received 3 December 2006; final version received 16 August 2007)
Functional-level strategic planning should align with and support business-level

strategies. Alignment of strategies is presumed to be a positive contributor to
business performance just as misalignment is presumed to be a negative
contributor. These presumptions should be true for all types of business
environments including the e-commerce environment. This study develops and
tests these presumptions by examining managers perceptions of strategy.
Drawing on both operations strategy and information systems strategy literature,
this research compares how these managers perceptions of operations strategy
and information system strategic orientation are aligned in an e-commerce
setting. Based on a sample of matched pairs of general managers and operations
managers from 176 organisations in the e-commerce industry, hypotheses relating
strategy and business performance are tested. The influence of other organisa-
tional variables (i.e. operations manager tenure and years of associations with
general manager) to moderate the results were also tested. The results support the
hypotheses that organisational variables moderate the relationship between
operations managers and general managers perceptions of operations strategy,
IS strategy orientation, and the fit between them in e-commerce organisations.
Keywords: operations strategy; e-commerce; information systems strategic

orientation; hierarchical regression
1. Introduction
The concept of alignment is an important theme in the field of strategic management

(Venkatraman and Camillus 1984, Venkatraman 1989). Likert (1961) underlined the
importance of aligning business and functional priorities with strategies of the firm.
The importance of fitting, or aligning, business strategy with internal organisation
strengths and external environmental opportunities/threats was emphasized by Ansoff
(1965) and Andrews (1971). While Hrebiniak and Joyce (1984) and Lingle and Schiemann
(1996) have shown the connection between alignment and business performance, strategic
management literature presumes misalignment will undermine business performance
(Ward and Bickford 1996).
*Corresponding author. Email: mschniederjans1@unl.edu
ISSN 00207543 print/ISSN 1366588X online

2009 Taylor & Francis
DOI: 10.1080/00207540701673465
http://www.informaworld.com
2536 M. Schniederjans and Q. Cao
Research on alignment in the operations strategy literature can be classified under

two categories: internal fit and external fit. Skinner (1974) generally refers to internal fit
as the consistency among task, policies, and practices. For example, Safisadeh et al. (1996)
addressed fit between manufacturing task and process choice. Kathuria and Davis (2001)
looked at fit between manufacturing priorities and work force practices used by managers.
External fit literature extends from Skinners (1969) seminal work which focused
on the need for aligning operations strategy with business and corporate strategies.
External fit can be examined in terms of its presence or absence, such as in Schroeder et al.
(1986) where there was a need for manufacturing strategy to be consistently aligned with
the business strategy of the firm. Alternatively, Swamidass (1986) using respondents
from different managerial levels, observed a lack of alignment of strategic priorities
at the manufacturing and business levels.
Making the connection between the external fit literature and alignment and business
performance relationships, Youndt et al. (1996) found certain types of human resource
systems were directly related to operational performance measures. They also
found competitive priorities moderated this relationship. In another study, Smith and
Reece (1999) found business strategy based on operations management aspects
of inventory, logistics, workforce, and organisations issues could lead to improved
business performance. Papke-Shields and Malhotra (2001) extended operations alignment
research by determining factors that lead to a greater degree of alignment between
business and manufacturing strategies. Factors such as influence and involvement
of manufacturing executives were found to affect alignment, which in turn affected
business performance.
Based on the prior research, Joshi et al. (2003) identified two gaps in the alignment-
performance operations strategy literature. The first, supported by Boyer and
McDermott (1999) suggested that few studies focused on strategy alignment in
a manufacturing setting. The second was that fewer studies focused on the impact
of a manufacturing units performance. To address these gaps Joshi et al. (2003)
focused their study on the interface between strategy-makers at the business and
manufacturing manager levels. They examined if the strategy alignment between the
organisation levels (i.e. general managers versus manufacturing managers) were
reflected in the practice of managers at the business and manufacturing levels.
Their sample was comprised of manufacturers from 17 different industries. Based on
their sample they found that the business performance of a manufacturing unit was not
directly enhanced when the strategy priorities of the general managers (GM) and
manufacturing managers (MM) were aligned but, when moderating organisational
factors were considered, enhancement was possible. To better identify the circumstances
under which business performance can be enhanced they explored the influence of two
moderating organisational factors (i.e. organisation tenure of the MM and years
of association between the GM and MM). They found alignment and performance are
significantly related when MMs are new to an organisation and when they have not yet
developed a relationship with the GM. They also found that once a relationship with
a GM was established and that the MM had achieved some tenure, alignment was not
significantly related to business performance.
Contrary to Joshi et al. (2003), Tarigan (2005) examined the alignment of GM and
MM strategic priorities in a sample of 84 manufacturing firms in a variety of differing
manufacturing industries and found a direct positive relationship between alignment and
unit business performance. Tarigan (2005) also found that an organisational moderating
International Journal of Production Research 2537
factor of unit decentralisation impacted business performance and manufacturing unit

decentralisation strengthened the positive alignment-performance relationship.
The contrary alignment-performance results between the Joshi et al. (2003) and
Tarigan (2005) studies that demonstrate differences in perception between upper-level
general managers and middle-level manufacturing managers can exist. Also, results vary
when considering moderating variables in manufacturing industries. This opens up
the possibility that industries other than manufacturing where operations managers are
employed might reveal differing results and these results might be critical to achieving
successful business performance in those industries.
For purposes of the present paper and as a departure from prior research, we will
examine alignment-performance issues within the electronic commerce industry. Electronic
commerce or e-commerce as suggested by Riggins and Rhee (1998) is defined as involving
not only buying and selling over the Internet, but also includes broader e-commerce
related issues of strategic orientation toward servicing customers, collaborating with
business partners, and conducting electronic transactions within an organisation.
According to Feeny (2001), e-commerce operations offer opportunities for uses
of Internet technology that can be directed at strategic change. As such, an operations
management approach to e-commerce strategy can greatly benefit business (Riggins and
Rhee 1998). Operations management literature also suggests the need to investigate its role
in e-commerce (Geoffrion and Krishnan 2001). Shaw et al. (1997) and Han and
Noh (2000) have called for the integration of operations management and management
information systems research studies addressing e-commerce strategy from the operations
perspective. Notably Venkatraman (2000) recognised the importance of alignment
between business environment, operations strategy, and information system (IS) strategic
orientation for business success in e-commerce. While the IS literature abounds with
strategic orientation studies, few studies combine operations strategy in e-commerce.
One study, Cao and Schniederjans (2004), found IS strategic orientation is a critical
success factor leading to enhanced operations management business performance in
e-commerce. Their research established a connection between operations strategy,
IS strategic orientation, and business performance.
In this present paper we seek to extend the Joshi et al. (2003) alignment model to look
at perceptual differences in strategy between general managers (GMs) and operations
managers (OMs) in the e-commerce industry. We focus on the alignment-performance
relationship, investigating whether GMs and OMs agree on strategic characteristics
(i.e. flexibility, quality, delivery, and cost) of their business units. These relationships are
depicted in Figure 1. Heeding the call of Venkatraman (2000), we also broaden prior
research to examine the GMs and OMs perceptions of the alignment-performance
relationship of IS strategic orientation construct. We also examine the GMs and OMs
perceptual fit of alignment between operations strategy and IS strategic orientation.
We further study whether organisational factors (i.e. organisation tenure of OM and years
of association) influence the alignment-performance relationships.
2. Literature review
This papers proposed model is based on three streams of prior strategic alignment
research. These streams relate to operations strategy, information systems strategy,
and e-commerce. Relevant prior research is used here to introduce model constructs.
CEOs perception of
operations strategy
Alignment of
operations
strategy
OMs perception of
operations strategy
CEOs perception of
IS strategic
orientation
Alignment of IS Business
OMs perception of strategic orientation performance
IS strategic
orientation
CEOs perception of
the fit between Organisational Factors:
operations strategy and Org. Tenure of OM
IS strategic Years of Association
orientation Alignment between
operations strategy
and IS strategic
OMs perception of orientation
the fit between
operations strategy
and IS strategic
orientation
Figure 1. Alignment model for operations strategy, IS strategic orientation, and alignment fit.
2.1 Operations strategy

The operations strategy alignment research originates with the conceptual framework for
operations strategy research by Skinner (1969). This research supports the alignment
relationships of the business environment, operations strategy, and business performance.
Vickery et al. (1993) identified an alignment fit (i.e. relational coherence) between
environment factors and operations strategy, and its impact on business performance.
Nath and Sudharshan (1994) examined coherence or alignment and found a monotonic
relationship between alignment and business performance. They urged others to examine
the relationship of a firms environment and business strategy, and a fit between a firms
business strategy with its functional strategies, like operations. Ward et al. (1995) found
the business environment appeared to have a tangible impact on operations strategic
choices in operations. They suggested that ignoring environmental effects in the operations
strategy model was likely to result in erroneous research findings. Other strategy
literature suggests that operations strategy has a positive impact on business performance
(Smith and Reece 1999), and that strategies based on organisation flexibility positively
affected business performance (DSouza and Williams 2000, Badri et al. 2000).
Recent manufacturing case studies (Baines et al. 2005) and empirical research
(Chenhall, 2005), further support the connection between operations strategy and business
performance.
In summary, these and other studies like Joshi et al. (2003) empirically support the
claim that alignment between the business environment and operations strategy is a central
tenet of major strategic management paradigms. In addition to the alignment construct,
other environmental factors, such as organisation tenure and years of association were
found important moderating variables in the strategy literature.
Collectively, these studies support the notion that operations strategy literature is
a well-established research stream and is well suited as the theoretical foundation for
operations strategy research used in e-commerce. It is noteworthy that these confirmatory
studies focused only on the manufacturing strategy model without detailing the broader
operations strategy constructs, such as quality and delivery service. Moreover, these
studies only investigated the financial aspects of performance (e.g. return on investment)
and omitted other dimensions, such as marketing growth (e.g. sales growth)
and innovation performance measures (e.g. developments in business operations and
services).
2.2 Information systems strategy

The relationship of aligning IS strategy and operations strategy is an important construct
of this paper. Chan et al. (1997) proposed the conceptual framework that established links
between the business strategy orientation, the IS strategy orientation, and business
performance. This framework indicates IS strategic orientation directly influences business
performance, business strategy influences IS strategic orientation, and alignment of IS
strategic orientation with operations strategy has a positive impact on business
performance. The literature also suggests operations strategy positively influences the
IS strategic orientation and vice versa. For example, Chan et al. (1998) found that
companies with high IS strategic alignment were better performing companies.
Sambamurthy (1999) argued that the operations strategy affected firms IS strategic
orientation. Sabherwal and Chan (2001) and Chan (2002) found IS strategic orientation
positively influenced firms operations strategy choices and alignment between business
strategy and IS strategy positively affected perceived business performance. Pollais (2003)
found that successful business performance in operations of information technology
intensive organisations could only be achieved if the IS strategies were a part of a
well-integrated organisational system of planning that included all functional areas.
Booth and Philip (2005) found that significant strategic and operational benefits are
possible when a firms IS strategies were aligned with organisational needs. Cao and
Dowlatshahi (2005) established linkages between agile manufacturing operations strategy
constructs and IS strategic orientation constructs within a manufacturing environment.
They found positive relations with business performance when operations strategy and IS
strategic orientation were aligned. They also found that moderating constructs
(e.g. information technology) had more of an impact on business performance when
they were strategically aligned. Other IS alignment research continues to reinforce the
prior results that positively links business performance with an aligned IS strategic
planning effort (Byrd et al. 2006, Chan et al. 2006).
In summary, the IS strategic alignment literature provides a substantial stream

of theoretical support for the purposes of this paper. Specially, the IS strategic orientation
and alignment of IS strategies are related to operations strategy and business performance.
2.3 E-commerce strategy research

There is a substantial body of research that relates strategic planning with e-commerce.
For example, Kao and Decou (2003) proposed a strategy-based model for e-commerce
planning. While some research focuses on e-commerce failures (Razi and Tarn 2004),
others make the connection to strategic planning as an enabler to e-commerce business
performance success (Piris et al. 2004, Lumpkin and Dess 2004, Levy et al. 2005).
Other research links IS strategic planning with the importance of alignment in
e-commerce. Atieno (2004) found that strategic alignment of IS technology is a critical
element in organisational strategic planning, necessary for enhanced business
performance.
Other e-commerce strategy research focuses on linkages with operations manage-
ment. For example, Da Silveria (2003), using exploratory case studies, developed a
framework combining operations management strategic planning with e-commerce
strategic planning. Chang et al. (2003) showed how e-commerce strategic orientation of
a firm and strategic opportunities can improve operations. Barnes et al. (2004)
connecting operations strategies and e-commerce business performance found that a
mismatch or misalignment between the operations strategy and e-commerce strategy
can hamper business performance.
The study by Cao and Schniederjans (2004) combines an e-commerce setting with
both the operational strategic planning and IS strategic orientation impact on business
performance. While their study shows general linkages between the operations strategy
and IS strategic orientation in an e-commerce environment, they did not focus on
unit differences between upper-level managers who originate strategy and middle-level
managers who must carry it out. Nor did they examine whether organisational
factors (i.e. organisation tenure of OM and years of association) influence the
alignment-performance relationship as did Joshi et al. (2003) in a manufacturing
setting.
In summary, the e-commerce literature provides a substantial basis for supporting the
theoretical linkages between IS strategic orientation and operations strategic planning
in an e-commerce environment.
3. Research hypotheses
The present paper seeks to research three types of relationship linkages presented in the
model in Figure 1. Specifically to test GM and OM perceptions of strategy alignment and
organisational factors based on Joshi et al. (2003) model but within the e-commerce
environment. The upper portion of the alignment model in Figure 1 for operations
strategy focuses on establishing a linkage between the operations strategy perceptions
of GMs and OMs and business performance. The middle portion of the alignment model
for IS strategic orientation focuses on establishing a linkage between the IS strategic
orientation perceptions of GMs and OMs and business performance. The lower portion
of the alignment model for fit between operations strategy and IS strategic orientation
focuses on establishing a linkage between the IS strategic orientation, operations strategy

and business performance. Each of the three model linkages will also be tested for
moderating organisational factors.
3.1 Operations strategy alignment model hypotheses

Business unit is defined as a single business, division, or subsidiary of a parent
company (Cao and Dowlatshahi 2005). Operations strategy is defined as the
perception of how a business unit supports multiple goals in areas of operations
flexibility, quality, delivery, and costs. For operations strategy we seek to determine if
the alignment between the GMs perception of the operations strategy and the OMs
perception of operations strategy enhances business performance. Thus, we have the
following hypothesis.
H1. As alignment between operations strategy perceptions of general managers (GMs)

and operations managers (OMs) increases, the performance of the business unit
increases.
Prior research on this relationship is generally supportive. Papke-Shields and Malhotra

(2001), Baines et al. (2005) and Chenhall (2005) all found alignment of strategies
positively affected the business performance. Joshi et al. (2003) did find a relationship
between operations strategy and business performance once moderating variables were
included in their model. Tarigan (2005) in manufacturing and Cao and Schniederjans
(2004) in e-commerce showed a positive relationship with business performance when the
operations strategy was aligned. Therefore, we expect the relationships in this hypothesis
to be proven true.
The two organisational variables used in this study are OM organisational tenure and
years of association. The selection of the OMs organisation tenure moderator variable
is based on a proposition by Tesluk and Jacobs (1998) that knowledge and experience
translates into successful business performance. Since GMs more clearly define the
strategy formulation process according to Nutt (1987), Joshi et al. (2003) focused on
the organisational tenure of the OMs. They found factoring for organisational tenure
moderated the constructs of operations strategy and business performance from an
insignificant to a significant result.
The moderator variable years of association was selected as a measure of length of time
an OM worked with a GM to further represent work experience. Unlike organisation tenure
which measures time with an organisation, Adkins et al. (1996) contends years of association
helps align the GMs and OMs with a common belief system and goals, impacting the
relationship between alignment and business performance. We also contend, as did Joshi
et al. (2003), that length of association between GMs and OMs reduces differences and in
turn leads to a coherence in thinking resulting in enhances business performance.
To examine the moderating effects of the two organisational variables within
the operations strategy construct we have the following hypotheses.
H1a. As the organisation tenure of OMs increases, the positive impact of alignment
of operations strategy perceptions between GMs and OMs on performance of the
business unit increases.
H1b. As the years of association between GMs and OMs increase, the positive
impact of alignment of operations strategy perceptions between GMs and OMs on
performance of the business unit increases.
Ginsberg and Venkatraman (1985) and Homburg et al. (1999) noted that strategy
research in the past experienced inconsistencies in identifying clear-cut relationship
between alignment and business performance. The inconsistent results were attributed
to a lack of moderator variables in the alignment-performance studies. We feel the
inclusion of these two moderator variables will strengthen the results and both will be
supported.
3.2 IS strategic orientation alignment model hypotheses

Similar to Cao and Schniederjans (2004) and Cao and Dowlatshahi (2005) IS strategic
orientation is defined here as a perception of IS support for cost, quality, delivery, and
flexibility strategies. For IS strategic orientation we seek to determine if the alignment
between the GMs perception of the IS strategic orientation and the OMs perception of the
IS strategic orientation impacts business performance. Thus, we have the following
hypothesis.
H2. As alignment between IS strategic orientation perceptions of general managers

(GMs) and operations managers (OMs) increases, the performance of the business
unit increases.
We know from prior research there exists a positive relationship between IS strategy
and business performance (Chan et al. 1997), and that aligned IS strategies are positively
related to business performance (Chan et al. 1998, Sabherwal and Chan 2001, Chan 2002).
We also know from Cao and Dowlatshahi (2005) that a positive relationship between
an aligned IS strategic orientation and operations strategy will result in enhanced business
performance in an e-commerce environment. While none of these studies focused
on differences between GMs and OMs, they tend to support the likelihood that H2 will be
proven to be true.
To include the organisational moderating variables for the IS strategy orientation
construct we have the following two hypotheses.
H2a: As the organisation tenure of OMs increases, the positive impact of alignment
of IS strategic orientation between the perceptions of GMs and OMs on performance
of the business unit increases.
H2b: As the years of association between GMs and OMs increase, the positive
impact of alignment of IS strategic orientation between the perceptions of GMs and
OMs on performance of the business unit increases.
Cao and Schniederjans (2004) found that an aligned IS strategic orientation in

e-commerce can positively impact business performance. Cao and Dowlatshahi (2005)
found that moderating variables (e.g. IS technology) can have a significant positive impact
on establishing a connection to IS strategic orientation and business performance.
Based on these related studies, we feel that both H2a and H2b will be supported.
3.3 IS strategy and operations strategy alignment model hypotheses

For alignment fit we seek to determine if the alignment between the GMs and OMs
perceptions of IS strategic orientation and operations strategy impacts business
performance. Thus, we have the following hypothesis.
H3. As perceptual alignment fit between IS strategic orientation and operations

strategy for general managers (GMs) and operations managers (OMs) increases, the
performance of the business unit in creases.
Based on the conclusions in Cao and Schniederjans (2004) in e-commerce and Cao and
Dowlatshahi (2005) in manufacturing that generally alignment fit between operations
strategy and IS strategic orientation will result in improved business performance,
we expect H3 to be true.
To examine the organisational moderating variables we have the following two
hypotheses.
H3a. As the organisation tenure of OMs increases, there is a positive impact of

perceptual alignment fit between GMs and OMs of operations strategy and IS
strategic orientation on performance of the business unit increases.
H3b. As the years of association between GMs and OMs increase, there is a
positive impact of perceptual alignment fit between GMs and OMs of operations
strategy and IS strategic orientation on performance of the business unit increases.
Based on Tarigan (2005) who found alignment of operations strategy between upper-
level and lower-level managers enhanced business performance and by Joshi et al. (2003)
who found the addition of these two moderating variables in an operations strategy model
would improve business performance we expect H3a and H3b to be supported.
4. Methodology
Using the same methodology as Joshi et al. (2003) to determine main and moderating
effects, models are developed and analysed for each of the three sets of hypotheses.
For comparative purposes with Joshi et al. (2003) results, we have selected a hierarchical
regression model for testing the hypotheses (Vittinghoff et al. 2005). Hierarchical
regressions selection for hypotheses testing in this research is based on the two step testing
processes involved. The first step is to test whether alignment (i.e. operations alignment,
IS strategic orientation alignment, and alignment between operations and IS strategic
orientation) is significantly related to the performance of the manufacturing units. Step 2
tests the relationships between performance and various alignments as
moderated by organisational variables to see if there is any significant improvement
over the first step.
4.1 Questionnaire construction

The unit of analysis in this study is a business unit that is actively involved in e-commerce.
Both research instruments used to obtain information for analysis were
survey questionnaires. One questionnaire was designed for GMs and the other designed
for OMs (see Appendix 1). The preliminary questionnaires were developed from prior
surveys and subsequent interviews with managers of several national e-commerce
companies. A preliminary set of questionnaire items were developed to corresponding
constructs, reviewed and edited using a Delphi revision approach by managers for a final
draft. All opinion responses were measured on a five-point Likert scale, adapted from
previous studies with modifications for the e-commerce setting.
In this study, the operations strategy construct consists of four dimensions
(i.e. flexibility strategy, quality strategy, delivery strategy, and cost strategy) used by
Skinner (1974) and is also based on four of the five dimensions used by Joshi et al. (2003).
The IS strategic orientation strategy construct is a revised version of the Chan et al. (1997)
instrument, which was based on the notion that information systems strategy complements
operations strategy. The questions used in the questionnaires for all constructs were
adapted from Joshi et al. (2003) and Chan et al. (1997).
Business performance information construct data were also collected in this study.
The business performance data were collected in the GMs survey and includes three
dimensions: market growth, financial performance, and innovation/reputation.
This research combines the product-service innovation, and company reputation
dimensions of Chan et al. (1997) for the business performance instrument into one
dimension named innovation/reputation. These measures have also been reliably used
in information systems strategy research by Sabherwal and Chan (2001).
In addition to the construct measures, general information questions were also
included in the survey instrument. This information included numerous questions on the
respondents title, years of experience, types of e-commerce businesses and technology
used, core competences, level of competition, importance of operations strategy,
and reasons for the use of e-commerce.
Several tests were conducted during the instrument validation and these included
descriptive statistics analysis, tests of scale reliability, criterion-related validity, construct
validity, unidimensionality, tests of convergence and discriminant in measurements and
constructs. Generally speaking, these tests and analyses are widely used in instrument
development in operations management research (Flynn et al. 1990). Summary results
of these tests are presented Section 4.3.
4.2 Data collection, sample, and respondent profiles

An initial sample of candidates for inclusion in this study was randomly selected from the
2002 North American Industry Classification System (NAICS) Manual. An invitation letter
was sent to the 1200 potential candidate companies to determine their willingness
to participate in the study. A total of 343 companies responded who were sent the
questionnaires used in this study. Due to the studys comparative nature the questionnaires
were sent in paired versions, one for GMs and one for OMs. Of the 343, only a total of 176
(51%) companies eventually responded sufficiently to all the questions to be used as the
sample in this study. A total of 352 usable or 176 paired questionnaires from the 176
companies were returned by the cut-off for the survey. Such a response rate is not unusual
when the unit of analysis is the firm and when it involves an extensive organisational level
survey (Griffin 1997). The resulting frequency and profile results of the participating
companies are presented in Table 1. The resulting firms represent six different NAICS
categories.
Table 1. Profile of participating companies.
Number of
Company profiles respondents Percentage
Type of industry
Computer and electronic product manufacturing (NAICS 334) 27 15%
Electronics and appliance stores (NAICS 443) 39 22%
Publishing industries (NAICS 511) 35 20%
Credit intermediation and related activities (NAICS 522) 30 17%
Professional, scientific, and technical services (NAICS 541) 26 15%
Accommodation (NAICS 721) 19 11%
E-commerce strategy
Open strategy 105 60%
Proprietary strategy 71 40%
Number of employees
Less than 200 19 11%
200399 48 27%
400699 52 30%
700999 44 25%
1000 or more 13 7%
Annual sales millions
Less than 20 18 10%
2099 26 15%
100299 49 28%
300499 45 26%
500999 30 17%
1 billion or more 8 5%
Types of electronic commerce technology are used in this organisation
Internet 176 100%
Intranet 176 100%
Extranet 176 100%
Traditional EDI 57 32%
Internet-based EDI 132 75%
Virtual organisation 176 100%
Groupware technology 125 71%
Others 37 21%
To ensure that the respondents were all from e-commerce firms, the survey
questionnaire contained a scanning question based on the e-commerce criteria proposed
by Bauer and Colgan (2001). The subjects of this research who meet the criteria of
e-commerce classification are regarded as actively involved in an e-commerce and
are included in the study.
The final sample represents a fairly even distribution of respondents from six different
types of US industries (as listed by NAICS code on Table 1). Based on Storey et al. (2000)
criteria we feel the industries in the sample are representative of e-commerce operations in
the USA. To rule out the possibility of non-response bias a comparison of the companies
that responded in the sample with a random sample of non-participating companies was
conducted. Data were collected on non-participating companies and compared to the
Table 1 frequencies. A non-respondent comparison suggested by Flynn et al. (1994) of
the distributions for the number of employees and sales between responding and
non-responding participates showed no statistically significant (p50.001) differences.
The companies in our sample had average annual sales of US$363 million and an average
number of employees of 578.
An important profile in this study is the organisations e-commerce technology usage.
The types of e-commerce technology used by the companies are presented in Table 1.
The participant frequency of e-commerce technology usage, their experience and reasons
for its use are presented in participant profiles in Table 2. In other general questions in
Table 2. Profiles of participating GM and OM respondents.
Respondent profiles Number of respondents Percentage
Your position title

General manager GM 49 28%
Chief operations officer GM 55 31%
Chief executive officer GM 72 41%
Director of operations OM 43 24%
Operations manager OM 74 42%
Service/manufacturing manager OM 59 34%
Your business unit name
Single business 81 46%
Division/subsidiary 95 54%
What is your functional area of expertise? OM only
Information systems 46 26%
Operations management 33 19%
Logistics 29 16%
Accounting and finance 32 18%
Customer services 24 14%
Other 12 7%
Five most important reasons that electronic business is used.
Increase productivity 156 89%
Communications between employees 141 80%
Efficient connection of organisational resources 129 73%
Reduce geographic distance 124 70%
Cost reduction 103 59%
Average years
How long has your business unit been offering electronic commerce services to the public?
Average years 12.94
How long have you worked in your business unit?
Average years GM 4.67
Average years OM 7.34
How long have you worked with the same subordinate?
How long have you worked with the same supervisor?
How many years of experience do you have in electronic commerce?
Table 2 respondents organisational tenure and years of experience are also captured for
testing purposes.
4.3 Measurement of variables, scale reliability, and instrument validity
4.3.1 Alignment
According to Venkatraman (1989) the concept of alignment has served as an important
building block for theory development in strategic management research. Euclidean
distance method was employed in this study to compute alignment scores between GMs
and OMs in terms of operations strategy, IS strategic orientation, and fit between
operations strategy and IS strategic orientation. The scoring process to measure variables
is presented in Appendix 2.
The computation of the alignment score in this study involves two steps. First, the
misalignments between the matched pairs of GMs and OMs on operations strategy, IS
strategic orientation, and fit between operations strategy and IS strategic orientation were
calculated respectively using the Euclidean distance method used in Joshi et al. (2003),
Sabhewal and Chan (2001) and Venkatraman (1989). In the second step the alignment
score is computed by subtracting the respective misalignment score from the maximum
misalignment score of the whole sample of each respective group, similarly used by Cao
and Dowlatshahi (2005).
4.3.2 Business performance

We have adopted perceptual measures of business performance for our study because
of the same difficulties observed by Swamidass and Newell (1987) in trying to obtained
objective measures like financial data at the business unit level. Perceived measures have
been used and recommended as a substitute when objective measures are not readily
available (Venkatraman and Ramanujam 1987, Homburg et al. 1999).
The business performance of a business unit was measured based on the GMs
perception on a total of 11 items. The scale was based on a 1-low to 5-high perceived
achievement on the 11 items. This listing is based on general marketing, financial,
and innovation/reputation criteria, similar to Cao and Schniederjans (2004) and Cao and
Dowlatshahi (2005).
4.3.3 Organisational variables

The GMs and OMs were asked for data on the organisational variables.
The organisational tenure variable was determined by the response to the OM survey
question: How long have you worked in your business unit? The years of association
variable between the GM and OM was measured by the response to the OM
survey question: How long have you worked with the same supervisor (i.e. GM, COO,
and CEO)?
4.3.4 Scale reliability

Scale reliability tests include Cronbachs alpha, corrected item-to-total correlation, and
split-half test. Cronbachs alpha is a commonly used method for assessing scale reliability
in empirical studies (Rosnow and Rosenthal 1998). In this research, Cronbachs alphas
were calculated for each dimension of its construct (Flynn et al. 1990). These Cronbachs
alpha values for GMs and for OMs all exceed the suggested alpha value of 0.70
rule generally considered as adequate for assessing reliability in empirical research
(Nunnally 1978). Thus, it is assumed that the scale items used in this research can
be considered reliable.
Corrected item-total correlations (CITC) were used for purification purposes
because garbage items may confound the interpretation of the factor analysis
(Koufteros et al. 2001). The CITC of all scale items ranged from 0.437 to 0.858 for
GMs and ranged from 0.506 to 0.879 for the OMs, which is above the suggested 0.30 rule
for this reliability test. The lower bound of this range is in line with those in other
operations management and information systems studies (Koufteros et al. 2001) and
is assumed that all scale items in this study cover the various dimensions and are adequate
measures of their corresponding constructs.
In a split-half reliability test all items that purport to measure the same construct
are randomly divided into two sets to assess reliability by measuring homogeneity.
The split-half test was also employed in this study to assess the homogeneity aspect of the
scale reliability. The split-half alpha values ranged from 0.772 to 0.894 for the GMs and
0.708 to 0.984 for the OMs. These values are generally considered adequate for empirical
research (Nunnally 1978).
4.3.5 Instrument validity

In this study instrument validity is comprised of the results of content validity, criterion-
related validity, convergent validity, and construct validity. Cooper and Schindler (1998)
suggested two ways of determining content validity:
1. Through a careful definition of the topic of concern, the items to be scaled, and the
scales to be used.
2. Using a panel of experts to judge how well the instrument meets the standard.
Our studys survey questionnaires were based on operations strategy theory and
information systems strategy research literature, which covers all major aspects of the
content areas. Moreover, the items to be scaled and the scales to be used in this research
are adapted from previous operations strategy and information systems strategy empirical
studies. The preliminary questionnaires were sent to and examined by a panel of experts
in both the operations and information technology/information systems fields. The final
questionnaires were modified to meet the standards based on the input of the panel
of experts.
Criterion-related validity is the degree to which the survey instrument correlates with
one or more criteria. The expected cross validity index (ECVI) is one measure for criterion-
related validity (Kline 1998). The ECVI values of all three constructs (largest being 0.72)
in this research are well below value of 1 rule for adequate in a criterion-related validity
test. As a result, it is assumed that all scale items have high probability of correspondence
between sample and population model fit.
The unidimensionality test provides evidence of a single latent construct (Flynn et al.
1990). In this research, the more rigorous confirmatory factor analysis (CFA) approach
was employed. The use of CFA requires the researcher to specify a conceptual model prior
to analysing the data. In this research, the three constructs were specified. All scale
items loaded on their intended dimensions. Standardised loadings for scale items ranged
from 0.61 to 0.92. These CFA loading results were in the moderate-to-high level.
Moreover, t-values for scale items ranged from 6.61 to 14.33 exceeding the 2.0 rule
of thumb. As a result, all loadings for scale items were significant (p50.05). All four
dimensions then loaded on the business performance construct. Overall, dimensions
loaded strongly on this construct with the lowest standardised loading at 0.81. All t-values
for various dimensions were much higher than the 2.0 rule of thumb revealing the loadings
for the dimensions were significant (p50.05).
Convergent validity concerns the degree to which multiple methods of measuring
a variable provide the same results (Churchill 1979). Stand-alone indices are used to test
convergent validity. They are based on the maximum likelihood fitting function,
which performs much better than those indices derived from the generalised least
squares approach (Hu and Bentler 1998). Stand-alone indices include standardised root-
mean-square residual (SRMR), competitive fit index (CFI), root-mean-square-error
of approximation (RMSEA), 2/df, and Critical N (Marsh et al. 1988). Hu and Bentler
(1998) recommended a maximum value close to 0.08 for SRMR; and a maximum cutoff
value close to 0.06 for RMSEA. A minimum cutoff value close to 0.9 is suggested for CFI
(Bollen 1989). Kline (1998) suggested a maximum cutoff of 2/df ratio of 3.0. Critical N
allows research to assess the fit of a model relative to identical hypothetical models
estimated with different sample sizes (Hoelter 1983). Critical N is computed based on the
chi square (2) and its degrees of freedom. A Critical N that is lower than the actual
sample size in CFA shows that CFA has sufficient power to detect some trivial problems
causing a poor fit (Joreskog and Sorbom 1993). A CFA stand-alone index for each
construct supports the convergent validity of the instrument.
If a construct has discriminant validity, scale items measuring different constructs
should have low correlations (Spector 1992). CFA was employed in this research to assess
the discriminant validity (i.e. 2 difference test using a significance of p50.01 level). In this
test each of the combinations of the three constructs taken two at a time for comparison
create pair-wise comparisons. The 2 difference between the unconstrained model and the
constrained model is tested at a given probability. These tests were significant (p50.01),
and it can be concluded that the three constructs were related but represented conceptually
distinct traits (i.e. possessing discriminant validity).
In summary, all constructs and all scale items used in this research met the test
requirements for adequate scale reliability and instrument validation.
5. Results
In Table 3, the descriptive statistics and correlation matrix for the study variables are
presented for each of the three sets of hypotheses. Similar to Joshi et al. (2003) the business
performance and organisational tenure variables were significantly correlated to business
performance. Unique to this study, the significant relationship held true for all three sets
of hypotheses comparisons of operations strategy, IS strategic orientation, and the fit
between them.
Hypothesis 1 seeks to test whether the perceived alignment in the operations strategy
between the GMs and OMs is significantly related to the performance of the business unit.
H1a and H1b test the relationship between business performance and the alignment
as moderated by organisational variables. Results of these hypotheses are presented
in Table 4.
Table 3. Descriptive statistics: mean, standard deviation and correlation.
Business Organisation Years of

Variable Mean SD Alignment performance tenure association
Alignment model for operations

strategy (sample size 176)
Alignment 2.51 0.82 1.00 0.10 0.09 0.12
Business performance 3.26 0.71 1.00 0.20* 0.43y
Organisation tenure 11.45 8.54 1.00 0.31y
Years of association 4.60 3.42 1.00
Alignment model for IS strategic orientation
(sample size 176)
Alignment 2.26 0.67 1.00 0.06 0.11 0.07
Business performance 3.26 0.71 1.00 0.19* 0.37y
Alignment model for fit between operations strategy and IS
strategic orientation (sample size 176)
Alignment 2.76 0.86 1.00 0.18* 0.06 0.11
Business performance 3.26 0.71 1.00 0.21y 0.34y
*Significant at p50.05.
y
Significant at p50.01.SD, standard deviation.
Table 4. Hierarchical regression results for operations strategy alignment.
Step 1 Step 2
Variable b T p b t p
Alignment 0.10 0.94 0.327 0.390 2.28 0.010

Organisation tenure 0.520 2.46 0.014
Alignment Organisation tenure 0.550 2.65 0.019
Alignment Years of association 0.200 1.00 0.187
r2 0.01 0.220
F-value 3.932
p-value 0.027
Overall F (p-value) 4.007 (0.002)
Note: all p-values are one-tailed except for those associated with the F statistics.
The results in Table 4 reveal the direct effect of alignment on business performance
is absent (in Step 1: 0.1, t 0.94, p 0.327) from the regression-based alignment model
for operations strategy but for the focus of this study it is the overall model which
yields significant results (in Step 2: F 4.007, p 0.002). While the correlation coefficients
are significantly improved (see Table 4) by the addition of the interaction variables
into the model, a review of the correlation matrix for all variables revealed no
presence of multicollinearity. Since the interaction terms introduced in the second step
of the regression significantly improved the models results over the first step, the
incremental variance in the dependent variable provides evidence to support the

moderating effect of organisational variables proposed under H1a and H1b. This result
is the same that Joshi et al. (2003) experienced with GMs and MMs in their alignment of
production priorities. Joshi et al. (2003) utilised Jaccard et al. (1990, pp. 2627) to interpret
the regression coefficient estimates. Specifically, when organisational variables (i.e.
organisational tenure and years of association) are equal to zero, the alignment of GM
and MM priorities are positively related to performance. Relating their interpretation to
our study, we can conclude that operations strategy alignment and business performance
have a positive relationship when the OMs have not yet developed a working relationship
with GMs (i.e. zero tenure) and are new to the organisation (i.e. zero years of association).
On the other hand, alignment of the operations strategy and business performance appears
not to have a relationship when the OM has been with the organisation for sometime
(i.e. organisational tenure greater than zero) and established a relationship with a GM
over time (i.e. years of association greater than zero). The negative sign in the variable
(i.e. alignment organisation tenure) might be interpreted as after establishing
relationship between GM and MM and after staying in the organisation for a while,
tenure curtails the relationship between alignment and performance. One explanation for
the lack of significance (i.e. alignment years of association) is that after establishing
relationship between GM and MM and after staying in the organisation for a while,
alignments relationship with performance gradually weakens to a point becoming
insignificant. In summary, H1 is not supported unless the moderating variables are
included in establishing the relationship in the overall model.
In terms of H1a and H1b, we can examine both the strength and nature of the
interaction as suggested by Jaccard et al. (1990). In step 2 of Table 4 for the portion
(in Figure 1) of the alignment model for operations strategy the interaction terms account
for a significant increase in r2, from 0.01 to 0.22. A significant increase in the variance
explained by the interaction terms (F 3.932, p 0.027) supports the moderating effect
of the organisational variables of organisational tenure and years of association.
To further support the results for H1 and rule out the possibility of erroneous results
due to use of composite measures, we conducted individual hierarchical regression
analyses for each of the four dimensions with respect to the dependent variable business
performance. The flexibility dimension consisted of six survey items; the quality strategy
dimension consisted of six items; the delivery strategy dimension of four items; and the
cost strategy of five items. The results of the four regression analyses are presented
in Table 5. In each of the four dimensions the results are consistent with the initial findings
that resulted from the use of the composite measures. Specifically, that the overall models
F-tests and their p-values in step 2 of the analyses are all significant (p50.05) with changes
to r 2. This further supports the initial results of the affect of moderating organisational
variables of organisational tenure and years of association.
Hypothesis 2 seeks to test whether the perceived alignment of the IS strategic
orientation between the GMs and OMs is significantly related to the performance
of the business unit. H2a and H2b test the relationship between business performance and
the alignment as moderated by organisational variables.
The regression results for H2 are similar to those of H1. They reveal the direct effect
of alignment on business performance is absent (in Step 1: 0.06, t 0.53, p 0.168)
from the portion (in Figure 1) of the alignment model for IS strategic orientation
regression model but the overall model yields significant results (in Step 2: F 3.948,
p 0.004). Similar to H1, the interpretation of this result allows us to conclude that
2552
Table 5. Regression analysis for operations strategy alignment based on four dimensions.
Flexibility strategy Quality strategy Delivery strategy Cost strategy

Dimension
Variable Step 1 Step 2 Step 1 Step 2 Step 1 Step 2 Step 1 Step 2
b b p b b p b b p b b p
Alignment 0.04 0.400 0.021 0.0900 0.430 0.024 0.0700 0.400 0.033 0.0200 0.290 0.048
Organisation tenure 0.550 0.018 0.500 0.020 0.470 0.025 0.600 0.013
Years of association 0.440 0.008 0.450 0.007 0.520 0.004 0.510 0.005
Alignment Organisation tenure 0.590 0.004 0.570 0.010 0.580 0.017 0.730 0.023
Alignment Years of association 0.130 0.092 0.180 0.023 0.270 0.048 0.320 0.046
r2 0.0016 0.300 0.0081 0.250 0.0049 0.150 0.0037 0.280
F-value 3.889 3.927 3.923 4.041
M. Schniederjans and Q. Cao
p-value 0.3100 0.012 0.2700 0.031 0.4100 0.062 0.2900 0.006

Overall F (p-value) 3.245 (0.012) 3.473 (0.019) 3.448 (0.021) 3.872 (0.034)
perceptions of IS strategic orientation alignment and business performance have

a relationship when the OMs are new to the organisation and have not yet developed
a working relationship with GMs. On the other hand, alignment of the perceptions of IS
strategic orientation and business performance appears not to have a relationship when
the OM has been with the organisation for sometime and has established a relationship
with a GM over time. These results fail to support acceptance of H2.
In terms of H2a and H2b, we can again examine both the strength and nature of the
interaction. The step 2 for the alignment model for IS strategic orientation interaction
terms account for a significant increase in r2, from 0.0036 to 0.30. A significant increase
in the variance explained by the interaction terms (F 3.932, p 0.027) supports the
moderating effect of the organisational variables of years of association and tenure,
supporting the acceptance of H2a and H2b.
To again rule out the possibility of erroneous results due to the use of composite
measures and further support H2, we conducted individual hierarchical regression
analyses for each of the four items (i.e. cost strategy, quality strategy, delivery strategy,
and flexibility strategy) used in the IS strategic orientation dimension with respect to
the dependent variable business performance. For each of the four items, the results are
consistent with the initial findings that the overall models F-tests and their p-values in step
2 of the analyses are all significant (p50.05) with changes to r2. This further supports
the initial results of the affect of moderating organisational variables.
Hypothesis 3 seeks to test whether the perceived fit between the operations strategy and
the IS strategic orientation of the GMs and OMs is significantly related to the performance
of the business unit. Hypotheses 3a and 3b tests this alignment relationship between
business performance and the alignment as moderated by the two organisational variables.
These results are presented in Table 6.
The results for H3 in Table 6 are different from those of H1. They reveal the direct
effect of alignment on business performance is significant in step 1 ( 0.18, t 1.93,
p 0.049), but clearly with the inclusion of the moderating variables in step 2, the fit
between operations strategy and IS strategic orientation overall alignment model yields
significant results (F 4.435, p 0.001). These findings might be interpreted to mean that
perceptions in the fit between operations strategy and IS strategic orientation have
a relationship to business performance when the OMs are new to the organisation and
Table 6. Hierarchical regression results for fit between operations strategy and IS strategic
orientation alignment.
Step 1 Step 2
Variable b t p b t p
Alignment 0.1800 1.93 0.049 0.450 2.30 0.008

Organisation tenure 0.460 2.49 0.023
Alignment Organisation tenure 0.490 2.61 0.021
Alignment Years of association 0.180 1.01 0.304
r2 0.0324 0.320
F-value 4.047
p-value 0.015
Overall F (p-value) 4.435 (0.001)
Note: all p-values are one-tailed except for those associated with the F statistics.
have not yet developed a working relationship with GMs. Alternatively, alignment
perceptions appear not to have a relationship with business performance when the OM has
established a relationship with a GM over time and after being with the organisation for
sometime. These results support acceptance of H3.
H3a and H3b suggest an examination of both the strength and nature of the
interaction. In step 2 of Table 6 for the fit between operations strategy and IS strategic
orientation alignment model interaction terms account for a significant increase in r2, from
0.0324 to 0.32. A significant increase in the variance explained by the interaction terms
(F 4.435, p 0.001) supports the moderating effect of the organisational variables
of organisational tenure and years of association.
6. Conclusions and implications
This study has explored the relationship between perceptual alignment of OMs and GMs
on operations strategy, IS strategic orientation, and fit between these two constructs.
Based on a sample of e-commerce firms from several industries, the study revealed no
direct relationship between alignment of operations strategy, IS strategic orientation or fit
between them, and business performance in the business units studied. The study also
revealed that by including the organisational variables of organisational tenure and years
of association, the relationship of GM and OM alignment became significantly related
to business performance.
These results are consistent with prior external fit research on manufacturing firms
when examining operations strategy. For example, in the manufacturing studies by
Homburg et al. (1999), and Lindman et al. (2001) there was an observed absence
of consensus or alignment among manufacturing managers of firms business-level
strategy and its direct relationship to performance. In the manufacturing study by Joshi
et al. (2003), the perceived alignment and performance direct connection was also absent
when MMs and GMs were studied. These studies also showed that by including other
factors or variables in the alignment-performance, a significant relationship could be
found. These studies and ours help to confirm that alignment of perceptions on operations
strategy can influence business performance when including organisational moderating
variables (or mediating variables in the case of Lindman et al. (2001)), such as
organisational tenure and years of association. We believe, as Joshi et al. (2004) suggested
in their manufacturing study, when e-commerce GMs and OMs have not associated for
very long and the OMs have negligible tenure, there is a significant relationship between
alignment and business performance. As time passes and the GM and OM extend their
association and tenure, the relationship between alignment and business performance
becomes less significant. A similar interpretation exists for the constructs of operations
strategy, IS strategic orientation and the fit between them.
These findings have significant implications for both managerial practitioners and
academic researchers. From a managerial perspective it appears that aligning perceptions
of GMs and OMs when they have little experience in working together will payoff in terms
of business performance. For the less experienced individuals working in the e-commerce
industry this conclusion suggests that efforts to align GMs and OMs perceptions on
operations strategy and IS strategic orientation will be beneficial to the organisation.
For the more experienced individuals in e-commerce businesses, investing the effort to
align GMs and OMs on operations strategy and IS strategic orientation may not be as
rewarding in terms of business performance.
From an academic research perspective, there are also implications of this study.
First, this study underscores the importance of exploring moderating variables in OM
strategy research. Without exploring the moderating variables in this study, the primary
hypotheses would not have supported and the unique experience-related
relationships would not have been revealed. It was only by exploring the impact of the
moderating variables and further exploring within homogeneous groups (i.e. dimension
and items), that the significant relationships reflected in the moderating variables were
observed.
A second research implication concerns the consistency of statistical findings between
the two areas of operations strategy and IS strategic orientation in H1 and H2,
respectively. Perceptions of operations strategy and IS strategic orientation are two very
different concepts, yet the results from the GMs and OMs suggest they were consistently
viewed with the same basic degree of significance (with and without moderating variables).
While Cao and Schniederjans (2004) have shown that operations strategy can influence IS
strategic orientation, the similarity of statistical results here demonstrates these two
different strategic areas of planning appear to be viewed similarly to each other, regardless
of the dimensions or survey items explored. This suggests that these two organisational
variables of organisational tenure and years of experience uniquely capture the variability
(and therefore predictability) of these two strategy-based constructs. If so, the use of these
two constructs may be useful in measuring many new strategy constructs not yet explored.
One limitation of this study is that it is based on a cross-sectional design. Data were
collected from diverse business types across various e-commerce industries categorised by
(Storey et al. 2000). The rationale for the cross-sectional design was: (1) the purpose of the
research was to examine the strategic alignment issues across e-commerce industries rather
than in a specific industry; and (2) it was necessary to obtain a sample size sufficient for
analysis. As the unit of analysis was a business unit, the potential sample size was small,
especially the way the questionnaires were distributed. However, the cross-sectional design
is limited and does not eliminate all the external factors in obtaining industry-specific
information (Sabherwal and Chan 2001). We suggest that further research exploring both
individual categories of e-commerce industries and a broader collection of e-commerce
industries should be considered as a viable avenue of future study.
Another limitation is that all the measuring instruments used in this research were
based on managers perceptions. While this is a time-honoured and valid operational
process for measuring various constructs (Buchko 1994), all questionnaire surveys are
limited by the truthfulness of the respondents. The validation and reliability analyses
undertaken in this study provided some level of assurance of the instrument ability to
capture useful measures.
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Appendix 1. GM survey questions
Part 1: General information
1. Your Position Title: _________Examples: general manager, chief operations

officer, chief executive officer
2. Your Business Unit Name: __________A business unit refers to a single business
(e.g. eToys) or to a division or subsidiary of a parent company (e.g. Wells Fargo
Branch in Minneapolis).
3. Does your company fit into one of the following criteria for electronic commerce
firm? (Please check one or both) a. Proprietary strategy implement your own
Internet applications and data interfaces; b. Open strategy the user interface
is identical, regardless of which company the consumer is doing business with
4. How long have you worked in your business unit? _____ years
5. How long have you worked with the same subordinators (operations managers)?
_____ years
6. How many years of experience do you have in electronic commerce? _____ years
(Electronic commerce refers to the process of buying and selling goods and services
electronically involving transactions using the Internet, networks, and other digital
technologies.)
7. How many employees are in your business unit? _____
8. How long has your business unit been offering electronic commerce services to the
public? _____ years
9. Indicate the type of organisation for which you are currently principally employed.
(Check only one.)
Internet Trading _____ Internet Banking_____ Internet Insurance_____ Internet
Shipping_____ Internet Retailing_____ Other______
10. Indicate what types of electronic commerce technology are used in this
organisation. (Check as many as applied.) Internet_____ Intranet_____
Extranet_____ Traditional EDI_____ Internet-based EDI_____ Virtual organisa-
tion_____ Groupware technology_____ Others (specify)________
11. Please select the 5 most important reasons that electronic business is used.
(Check only 5.)
Create an easily accessible communication network_____ User access control _____
Cost reduction_____ Faster access to information_____ Access to more accurate
information_____ Easier access to information_____ Increase productivity_____
Reduce printing costs_____ Reduce distribution costs_____
Efficient connection of organisational resources_____ Reduce geographic
distance_____
Connect computer platforms_____ Exchange information_____ Flexibility in time
of delivery_____ Communications between employees_____ Global exchange of
information_____ Scheduling_____ Advertising_____ Database integration_____
Project management_____ raining _____ Reduce administration_____
Support ISO9000 initiatives_____ Reduce paper flow_____ Ease of software
replacement_____ Others specify)____________
12. How competitive is the market in which your organisation operates?
(Check only one.)
Not at all competitive___ Stable___ A little Competitive___ Moderate

Competitive___ Very Competitive___
13. What is the most important core competence of your service, compared with
competitors services? (Check only one.)
Price_____ Quality_____ Delivery_____ Flexibility_____ Other_____________
14. How important is the information systems strategy to support operation strategy?
Not at important_____ A little important_____ Moderation important_____
Important____ Very important____
15. Your best estimation at annual sales of your business unit: ($_______)
Part 2: Operations strategy

No emphasis Extreme emphasis
Flexibility strategy in conducting the business unit operations
Maximise purchasing convenience 1 2 3 4 5
Maximise time flexibility in purchasing 1 2 3 4 5
Provide purchasing convenience 1 2 3 4 5
Minimise effort of shopping 1 2 3 4 5
Maximise ease of finding product/service 1 2 3 4 5
Increase variety of products/services 1 2 3 4 5
Quality strategy in conducting the business unit operations
Maximise product value 1 2 3 4 5
Ensure quality of product 1 2 3 4 5
Minimise Fraud 1 2 3 4 5
Assure System Security 1 2 3 4 5
Maximise Access to Information 1 2 3 4 5
Minimise Misuse of Credit Card 1 2 3 4 5
Minimise Misuse of Personal Information 1 2 3 4 5
Delivery strategy in conducting the business unit operations
Provide reliable delivery 1 2 3 4 5
Assure arrival of purchase 1 2 3 4 5
Minimise delivery time 1 2 3 4 5
Minimise shipping time 1 2 3 4 5
Cost strategy in conducting the business unit operations
Minimise product/service cost 1 2 3 4 5
Minimise tax cost 1 2 3 4 5
Minimise shipping cost 1 2 3 4 5
Reduce inventory 1 2 3 4 5
Increase capacity utilisation 1 2 3 4 5
Part 3: Information systems strategy

Low High
IS strategy support for cost strategy 1 2 3 4 5
IS strategy support for quality strategy 1 2 3 4 5
IS strategy support for delivery strategy 1 2 3 4 5
IS strategy support for flexibility strategy 1 2 3 4 5
Part 4: Business performance

Low High
Your market growth
Market share gains 1 2 3 4 5
Sales growth 1 2 3 4 5
Revenue growth 1 2 3 4 5
Your financial performance
Return on investment 1 2 3 4 5
Return on sales 1 2 3 4 5
Liquidity 1 2 3 4 5
Cash flow 1 2 3 4 5
Profitability 1 2 3 4 5
Your product/service innovation
Developments in business operations 1 2 3 4 5
Development in products and services 1 2 3 4 5
Your company reputation
Reputation among major customer segments 1 2 3 4 5
Please also specify real earnings growth of your company for the last three years:
2001______ 2002 ______ 2003_______.
The only difference between the GM survey and the OM survey were the modification
of the three questions below and exclusion of Part 4.
1. Your Position Title: _____Examples: director of operations, operations mgr., and
service/manufacturing mgr.
5. How long have you worked with the same supervisor (i.e., GM, COO, CEO)? _____
years
7. What is your functional area of expertise? (Check only one.)
Information Systems_____ Operations Management_____ Logistics_____ Accounting
and Finance_____
Customer Services_____ Other _______
Appendix 2. Scoring process for variables
The computation of the alignment score in this study involves the following two steps.
First, the misalignments between GMs and OMs on operations strategy, information
systems strategic orientation, and the fit between information systems strategic orientation
and operations strategy were calculated respectively (see Equations 13 below) using
the Euclidean distance method (Joshi et al. 2003, Sabhewal and Chan 2001,
Venkatraman 1989).
q
X
os os 2
Euclidean distance GMi OMi 1
where GMos i is the normalised score for ith dimension of operations strategy of GMs,
os
OM
P i is the normalised score of the ith dimension of operations strategy of OMs, and the
is the summation of the various values of i ranging from 1 to 4 for operations strategy
construct.
r
X 2
Euclidean distance GMisso j OMisso j 2
where GMissoj is the normalised score for jth dimension information systems strategic
orientation of GMs, OMisso j is the normalised score of Pthe jth dimension
of information systems strategic orientation of OMs, and the is the summation
of the various values of j ranging from 1 to 4 for information systems strategic orientation
dimension construct.
r
X 2
Euclidean distance GMfit n OMn
fit
3
where GMfitn is the normalised score for nth dimension of the fit between information
systems strategic orientation and operations strategy of GMs, OMfit n is the normalised
score of the nth dimension of the fit between
P information systems strategic orientation and
operations strategy of OMs, and the is the summation of the various values
of n ranging from 1 to 4 for the construct of the fit between information systems strategic
orientation and operations strategy. Please note that both GMfit fit
n and OMn scores are
rendered through the same two steps, that is, first, the misalignments between operations
strategy and information systems strategic orientation were calculated respectively for
both GMs and OMs and second, compute the alignment score by subtracting
the respective misalignment score from the maximum misalignment score of the whole
sample of each respective group.
For example, the scores for GMs operations strategy dimensions were as follows:
. Cost 4.2.
. Quality 3.2.
. Delivery 3.5.
. Flexibility 2.3.
The scores for OMs operations strategy dimensions were as follows:
. Cost 3.2.
. Quality 4.0.
. Delivery 4.1.
. Flexibility 2.9.
Based on the above scores, misalignment or Euclidean distance is calculated to be:

q
X q
X
os 2
Euclidean distance GMos i OM i 2:36 1:54 4
Second, compute the alignment score by subtracting the respective misalignment score
from the maximum misalignment score of the whole sample. For example, if the maximum
misalignment score of the sample is 4.31, the misalignment score is then converted to
an alignment score as follows:
Alignment Score for a given respondent (max misalignment score from the entire
sample misalignment score of the respondent) (4.31 1.54) 2.77.

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International Journal of Production Research

Vol. 47, No. 10, 15 May 2009, 25352563

Alignment of operations strategy, information strategic

M. Schniederjans*a and Q. Caob

(Received 3 December 2006; final version received 16 August 2007)

Functional-level strategic planning should align with and support business-level

Keywords: operations strategy; e-commerce; information systems strategic

The concept of alignment is an important theme in the field of strategic management

*Corresponding author. Email: mschniederjans1@unl.edu

ISSN 00207543 print/ISSN 1366588X online

Research on alignment in the operations strategy literature can be classified under

factor of unit decentralisation impacted business performance and manufacturing unit

2.1 Operations strategy

2.2 Information systems strategy

In summary, the IS strategic alignment literature provides a substantial stream

2.3 E-commerce strategy research

focuses on establishing a linkage between the IS strategic orientation, operations strategy

3.1 Operations strategy alignment model hypotheses

H1. As alignment between operations strategy perceptions of general managers (GMs)

Prior research on this relationship is generally supportive. Papke-Shields and Malhotra

3.2 IS strategic orientation alignment model hypotheses

H2. As alignment between IS strategic orientation perceptions of general managers

Cao and Schniederjans (2004) found that an aligned IS strategic orientation in

3.3 IS strategy and operations strategy alignment model hypotheses

H3. As perceptual alignment fit between IS strategic orientation and operations

H3a. As the organisation tenure of OMs increases, there is a positive impact of

4.1 Questionnaire construction

4.2 Data collection, sample, and respondent profiles

Table 1. Profile of participating companies.

Table 2. Profiles of participating GM and OM respondents.

Respondent profiles Number of respondents Percentage

Your position title

4.3 Measurement of variables, scale reliability, and instrument validity

4.3.2 Business performance

4.3.3 Organisational variables

4.3.4 Scale reliability

4.3.5 Instrument validity

Table 3. Descriptive statistics: mean, standard deviation and correlation.

Business Organisation Years of

Alignment model for operations

Table 4. Hierarchical regression results for operations strategy alignment.

Alignment 0.10 0.94 0.327 0.390 2.28 0.010

incremental variance in the dependent variable provides evidence to support the

Flexibility strategy Quality strategy Delivery strategy Cost strategy

p-value 0.3100 0.012 0.2700 0.031 0.4100 0.062 0.2900 0.006

perceptions of IS strategic orientation alignment and business performance have

Alignment 0.1800 1.93 0.049 0.450 2.30 0.008

6. Conclusions and implications

Pollais, Y.A., 2003. Patterns of co-alignment in information-intensive organisations: business

Appendix 1. GM survey questions

Part 1: General information

1. Your Position Title: _________Examples: general manager, chief operations

Not at all competitive___ Stable___ A little Competitive___ Moderate

Part 2: Operations strategy

Part 3: Information systems strategy

Part 4: Business performance

Appendix 2. Scoring process for variables

Based on the above scores, misalignment or Euclidean distance is calculated to be:

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Not at all competitive_ Stable_ A little Competitive___ Moderate