While researchers have encouraged more research on the causal chains between
IT investments and firm performance, the results of empirical studies have been
inconclusive. This is partly due to the exclusion of IT-business strategic alignment
(known as strategic alignment). In particular, scholars have continuously called
for research that addresses the antecedent factors that lead to the alignment.
Moreover, the elusive link between strategic alignment and firm performance
calls for further research into intermediate variables, which would in turn affect
company performance. Furthermore, although there is significant literature on
strategic alignment and its consequences, little progress has been made in
developing a comprehensive theoretical understanding of how organizations can
leverage strategic alignment types to positively influence firm performance.
Therefore, this study has succeeded in developing a causal model illustrating the
relationships between strategic alignment antecedents, strategic alignment, and
firm performance through vital intermediary variables, namely explicit and tacit
knowledge management (KM) strategies. Specifically, this study has examined the
impact of IT-business strategic alignment antecedents in terms of interaction
between business and IT managers, association between business and IT plans in
terms of IS plans-reflect-business plans (ISP-BP) and business plans-reflect-IS
plans (BP-ISP), shared knowledge between business and IT managers, and
environmental uncertainty in terms of dynamism and heterogeneity; on ITbusiness
strategic alignment in terms of managers’ exploitation and exploration
activities; and finally the impact of IT-business strategic alignment on explicit and
tacit KM strategies; and in turn on firm performance in terms of growth (i.e.
accounting-based) and innovation (i.e. market-based) performances.
Furthermore, in order to explore the above research relationships, the study
utilizes the positivism paradigm while applying mixed-method techniques that
acquired quantitative and qualitative data, in which such triangulation would help
provided more insight into the issues studied in this research. Particularly, this
study has tested the research model by conducting 152 survey questionnaires with
public shareholding firms in Jordan. It examines the model by using dynamic
panel data for the period 2000-2006 for the 152 Jordanian firms. This is by
employing the generalised method of moment (GMM) technique, which supplies a set of results that is robust to the endogeneity of all explanatory variables, and to
the presence of unobservable heterogeneity. After that, the study conducted
several follow-up interviews in Jordan to further validate the research results.
Therefore, the results obtained from the structural equation modelling (SEM)
technique, generalised method of moment system, and supplementary interviews
offer a valuable insight into the research questions.
However, even though this study is the first research of its kind to incorporate
different aspects of alignment antecedents, strategic alignment, explicit and tacit
knowledge management strategies, and firm performance into an assessment
instrument based on a model using structural equation modelling (SEM) and
dynamic panel generalised method of moment (GMM) techniques, and several
accompanying interviews to support interpreting the quantitative results, some
limitations and directions for further research are discussed. Furthermore, since
some of the research propositions were supported and some were not, and
although this study has provided a detailed roadmap which researchers and
practitioners can use to understand the resources required, realizing the potential
values of their IT investments, future research is clearly needed to reveal better
insights into the nature of these associations.