The Impact of IT-Business Strategic Alignment on Firm Performance: The Role of Environmental Uncertainty and Business Strategy

Aligning information technology (IT) strategy with business strategy has been one of the top concerns of practitioners and scholars for decades. Although numerous studies have documented the positive effects of IT-business alignment on organizational performance, few considered the contextual factors that may influence the relationship. This study attempts to fulfill this gap by investigating the role of environmental uncertainty and business strategy on the performance effects of the strategic alignment. Using survey data and statistical analysis, we show that the positive effect of the strategic alignment is significant only in high uncertainty environments. We also find that these effects on organizational performance vary across business strategies and performance measures. The main contribution of this study is the investigation of strategic alignment-performance relationship with respect to different contextual factors, thus providing a richer insight into IT-business strategic alignment issues.