An information technology trilogy: business strategy, technological deployment and organizational performance

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Abstract

The objective of this empirical study is to identify various profiles of technological deployment specific to various types of business strategy that best support organizational performance. Top managers from 223 organizations completed two questionnaizres analyzed using a Partial Least Squares tool (PLS graph). Profiles of technological deployment based on the strategic impact of the information system department, the technological architecture, the information system performance evaluation and technological scanning were identified. Using Miles and Snow's typology to characterize business strategy, an outward technological profile contributes directly to organizational performance for the analyzer strategic activities, while an inward profile of technological deployment contributes indirectly to organizational performance for the prospector strategic activities.

Introduction

Information technology plays a significant strategic role within organizations (Bergeron and Raymond, 1995, Henderson and Venkatraman, 1999, Porter and Millar, 1985, McFarlan et al., 1983). Strategic information systems (IS) can support or even shape business strategy. Furthermore, some conventional information systems become strategic when used in innovative ways (Wiseman, 1988). Since the early 1990s, improving the information system planning process has been one of the top 10 concerns of senior IS executives (Janz et al., 1996). In order to carry out this planning process successfully, it is important to align the IS plan with the organization's business plan (Busch, 1999, Luftman, 1998, Saviano et al., 1997). GartnerGroup's 1999 annual survey reports that aligning information technology with business goals is still among the Chief Information Officer's top 10 issues in management of technology (Raphaelian and Broadbent, 1999).

Some studies have successfully observed the effect of the alignment of information technology with organizational variables on organizational performance. These variables are the strategic management of IS, the organizational structure or the business strategy (Bergeron and Raymond, 1995, Raymond et al., 1995, Chan et al., 1997).

The importance of strategic alignment of information technology is being acknowledged; however, some issues still need to be addressed. For example, how organizations really deploy their information technology with respect to their business strategy. None of those studies mention any particular types of technological deployment belonging to a specific business strategy.

The original contribution of this study is the identification of the profiles of technological deployment associated with various types of business strategy. This article will also further the understanding of the impact of IS on organizational performance as recommended by DeLone and McLean (1992) as well as the interaction between business strategy and other organizational components such as the deployment of information technology (Miller, 1996). Using a contingency approach, this article looks at the different profiles of technological deployment associated to different types of business strategy.

Section snippets

Literature review

The literature review is organized according to the three basic constructs of the research: business strategy, technological deployment, and organizational performance.

Research model

The research model shown in Fig. 1 has been developed to answer the following question: Given a type of business strategy, what profile of technological deployment best help firms enhance their performance?

A contingency approach was used to test the model to get a better understanding of the impact of IS on performance (Weill and Olson, 1989, Raymond et al., 1995, Bergeron et al., 1998). This approach consists of examining simultaneously the links between several variables, such as business

Sample and data collection

Following in-depth interviews used to pre-test the research instrument, paired questionnaires were sent to a sample 1949 Canadian firms listed in Dun and Bradstreet's directory. The first questionnaire, concerning business strategy, was addressed to the Chief Executive Officer, while the second, pertaining to technological deployment was addressed to the Chief Information Officer. The selection criteria were to have more than 250 employees (to have a minimum of technological deployment) and to

Results

The detailed research model is presented in Fig. 2 and the test results are presented in Fig. 3, Fig. 4, Fig. 5, Fig. 6. Hypothesis 1 tested the relationship between each type of strategic activities and organizational performance. A positive and significant relationship was observed between prospector strategic activities and organizational performance (path=0.37; P<0.001), while a negative and significant relationship was found between reactor strategic activities and organizational

Discussion

This section discusses the results obtained from the hypothesis testing by type of strategic activities and presents more information on the directions of the relationships, thereby explaining the role of the mediating variables and concludes with some limitations of the study.

Conclusions

In summary, the first hypothesis has supported the existence of a positive link between strategic activities and organizational performance for the activities of prospector, and a negative link for the activities of reactor. The second hypothesis, corresponding to the relationship between strategic activities and different profiles of technological deployment is accepted for the activities of prospector, analyzer, and defender. Finally, the third hypothesis, which concerns the existence of

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