Objective and main results

The study concerns the relationship between organizational agility and business–IT alignment. Agility is defined as a firmwide capability to sense and respond effectively to market opportunities and threats. Alignment refers to the degree of fit and integration among business strategy, business infrastructure, and IT infrastructure. The study distinguishes between intellectual alignment and social alignment. The former concerns the state in which a set of interrelated IT and business strategies exists, and the latter refers to the state in which business and IT executives within an organizational unit mutually understand and are jointly committed to each other’s mission, objectives, and plans.

Findings:

• Intellectual alignment impedes agility by increasing organizational inertia (referring to firms’ tendencies to maintain stability of their organizational arrangements such as strategy and structure in spite of environmental change).
• Social alignment facilitates agility by enhancing emergent business IT-coordination. This type of alignment is not significantly related to organizational inertia.
• Social alignment weakens the effect of intellectual alignment on organizational inertia (i.e. the effect of intellectual alignment on inertia is lower when social alignment is high).

Summary of practical implications

Firms should carefully implement formal alignment between business and IT strategies, because its associated organizational arrangements - such as resource allocation, structures, and routines - could contribute to inertia that impedes agility and firm performance.

One way to counter this negative effect is to foster social alignment that is informal, flexible, and does not put structural restrictions on the organization. Firms should therefore foster informal mechanisms and communication channels/structures to enable CIOs and other executives to coordinate and exchange information with each other. This will enhance their common understanding regarding how business and IT should align.

With a high level of social alignment, business and IT executives are more likely to coordinate with each other to solve unpredictable problems at the top level and also empower their subordinates to engage in cross-functional coordination.