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MANAGEMENT | RESEARCH ARTICLE
The impact of strategic alignment on
organizational performance: The case of
Ethiopian universities
Dawit Udessa Gede
1
* and Admasu Tesso Huluka
2
Abstract: Strategic alignment deals with organizational strategic fit with functional
areas strategies, such as human resources management strategy. It is based on goal
setting premise which believes in collaborative effort that involves all parties imagining
and working towards a common aim in tandem. Strategic alignment in this study
takes assumption of goal setting theory stressed on importance of clarity of the goal to
perform at the highest level and achieve success. The purpose of this study was to look
into the impact of strategic alignment on organizational performance. Clarity in the aim,
role clarity, and process clarity were discovered and examined for the measurement of
organizational strategic alignment. The study took a quantitative approach with descrip-
tive and explanatory research designs. Three Ethiopian universities were chosen based on
generation of establishment to include 365 personnel in the sample using a random
selection technique. Descriptive statistical tools such as mean and standard deviation
were used, whereas structural equation models were used for confirmatory factor ana-
lysis and path analysis. According to the study’s findings, goal clarity, role clarity, and
process clarity all have a significant and favorable effect on organizational performance
in higher education. Findings of the study reveal also that organizational performance
varies among study institution based on implementation level of strategic alignment.
Based on the study’s findings, it is recommended that organizational leaders outline
organizational strategic intents with specific goals. Thus, it is recommended that govern-
ing bodies need to promote defined roles and processes for all workers.
Dawit Udessa Gede
ABOUT THE AUTHOR
Dawit Udessa is a lecture in the Department of
Management, College of Business and Economics,
Bule Hora University, Ethiopia. He is a PhD stu-
dent in Bule Hora University in management
department. Currently, he is working on disser-
tation titled impact of human resource manage-
ment practices and strategic alignment on
organizational performance: mediating role of
employee engagement: Case in Ethiopian higher
educational institutions. Dawit has more than 6
years’ different industry and about 6 years
teaching experience in university. His hobbies and
interest are reading and advising others.
PUBLIC INTEREST STATEMENT
Strategic alignment increasingly showing impor-
tant role in the organizational performance
improvement. This study provides significance of
strategic clarity for goal achievement in public
institutions. Moreover, this study magnifies
importance of alignments between strategic
components. To increase employee commitment
and engagement; institutional leaders must
increase the level of employee trust in manage-
ment system through clarity in goal, role and
process, which increases individual motivation to
contribute for their institutional better
achievements.
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Page 1 of 17
Received: 14 May 2023
Accepted: 10 August 2023
*Corresponding author: Dawit udessa
Gede, Department of Management
College of Business and Economics,
Bule Hora University, Bule Hora 144,
Ethiopia
E-mail: dawitudessa2008@gmail.
com
Reviewing editor:
Santiago Gutierrez-Broncano,
Business Administration, University
of Castilla-La Mancha, Spain
Additional information is available at
the end of the article
© 2023 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group.
This is an Open Access article distributed under the terms of the Creative Commons Attribution
License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribu-
tion, and reproduction in any medium, provided the original work is properly cited. The terms on
which this article has been published allow the posting of the Accepted Manuscript in
a repository by the author(s) or with their consent.
Subjects: Sustainable Development; Economics; Finance; Business, Management and
Accounting;
Keywords: alignment; clarity; goal; role; performance; process; strategy
1. Introduction
Organizational performances are a set of overall preferred results that it wants to accomplish and
measure for different levels of hierarchy and can be assessed for individuals, groups, and the entire
organization as a whole (Knies et al., 2016). Thus, performance is success that doesn’t exist by
itself, but it is a function of individual efforts and the result of action (Anwar & Abdullah, 2021).
Change dynamism in modern business environment complicated the management system and
challenging effectiveness in performance. Hence, to sustain performance improvement, organiza-
tion of all structure and size searching for strategic fit that allow all parts of the system to be
closely integrated and aligned toward actively achieving the desired results. Thus, integration of
business resources and activities with organizational strategic priority is termed as strategic
alignment as it is used in this study. Strategic alignment is critical trend among contemporary
strategic concepts helping organizations to cope up with challenges and altering old work system
to productive one (Sharma & Behl, 2023). It is a long-term function that secures organizational
survival and protect the continuity of performance improvement (Sha et al., 2020). Strategic
alignment allow harmony relation and transparent communication between lower and higher
level administrators and staff. This enables organizations to work together and achieve a unified
goal through effective communications. It is a source of compatibility and harmony at the
organization’s internal level due to unified efforts (Abanumay & Mezghani, 2022; Ahmad &
Adnan, 2017; Chtourou Ben Amar & Ben Romdhane, 2020).
The basic foundation of strategic alignment is contingency theory that states the fit between
certain contextual and organizational factors leads to higher performance (Hanisch & Wald, 2012).
There is also configurational theory which suggests strategic alignment as the fit between a firm’s
strategy and its internal and external factors leads to superior firm performance (Herd et al., 2018).
Strategic alignment has different dimensions representing organizational strategic fit with various
contextual components (Younis et al., 2023). It includes harmony of business strategy, information
technology strategy, organizational infrastructure and processes, and IT infrastructure and pro-
cesses by Luftman et al. (1993). Moreover, it encompasses organizational strategic fit with strate-
gies in other functional areas, such as procurement strategy (Knudsen, 2003), human resource
management strategy (Shih et al., 2005) and advertising strategy (Boudreau & Watson, 2006). But,
the focus of this study is investigation of strategic clarity dimensions like goal clarity, role clarity
and process clarity effects on organizational performance.
Clarity in strategic statement provides valuable guidance to workers through specific identification of
the performance dimensions that organization seeks to optimize (Smith & Thomas, 2020). It shapes
workers’ attention in the most effective way which in turn, results in the highest performance. Goal, role
and process clarities are the strategic clarity statements used for this study and represents the degree to
which employees understand why the task assigned is relevant or essential (Anderson & Stritch, 2016). It
help employees to feel that their organization includes their contribution and also acts as an essential
motivator for achievements and task performance (Bellamkonda et al., 2021).
Many scholars have attempted to explore implementation and theoretical implication of con-
structs at practical level given the importance of strategic alignment for the success of organiza-
tions performance. However, no common sense were reached about unified constructs and best
dimension of strategic alignments (Herd et al., 2018; Reese, 2020; Wamba-Taguimdje et al., 2020).
Moreover, the focus of many researchers in the area of strategic alignment is fit between organi-
zational strategic priorities with information technology and/or with external environment.
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Therefore, the focus of current study is investigation of how clarity in organizational strategic
objectives is communicated among the parts in organization and how it affects targeted
performance.
Though concepts of strategic alignment have been studied and insights into understanding of different
dimension of strategic alignment and its impact on organizational performance were established (Al-
Surmi, 2016; Ghonim et al., 2022; Sharma & Behl, 2023); those researches mainly focused on three issues
as fit between information technology and business strategy, fit between business strategy and compe-
titive environment and as fit between business and marketing strategy. But, alignments between
important strategy components as goal, tasks (role) and procedure (process) through which assigned
tasks performed was not yet investigated. Moreover, prior researchers have generalized strategic align-
ment as equally applicable concepts to all organization irrespective to size and nature without taking into
account the specific strategies of firms and alignment dimensions. Therefore, this study focused on
effects of strategic alignment dimensions as goal, role and process clarity in Ethiopian higher educational
institutions assuming fit between clarity of these concepts improve performance.
2. Literature review
2.1. Theoretical foundation of strategic alignment
Strategic alignment refers to fit between corporate resources with opportunities and threats. It can
be traced to the work of Chandler (1962); Andrews (1971). In its early stage and much of the
literature on strategic alignment has focused on the alignment of IT strategy with corporate
strategy. Henderson and Venkatraman (1992) develop strategic alignment model framework
that includes strategic fit, functional integration and linkage between business strategy and
information technology. Henderson and Venkatraman’s strategic alignment model extends to
emphasize how business success depends on the harmony of business strategy, information
technology strategy, organizational infrastructure and processes, and IT infrastructure and pro-
cesses by Luftman et al. (1993). It includes the calibration of the organization’s culture, staff,
structure and governance with the strategy (Al-Shami et al., 2022).
Moreover, strategic alignment deals with organizational strategic fit with strategies in other functional
areas, such as procurement strategy (Knudsen, 2003), human resource management strategy (Shih
et al., 2005) and advertising strategy (Boudreau & Watson, 2006). Those functional areas have also been
addressed in the literature. For this study, Shih et al. (2005) strategic alignment dimension dealing with
strategic clarity is a focus. The notion of alignment is used to investigate the extent of fit between an
organization’s human resources management and its development strategies. In a sense of strategic
human resource management, knowledge is the major driver of business performance by creating core
capability to an organization (Moustaghfir, 2014). The logic behind the concept of strategic human
resource management is linking such organizational core capabilities with business strategy so as to
win competitive advantage against the rivals. It is the alignment of organizations strategic human
resource management function as a strategic partner to organizational growth in the formulation and
implementation of the organization’s strategies through human resource activities crating clarity in
stated goal and courses of actions that take way to its achievement Junita (2016) suggested that
a clarity in strategic management practice is the best way to differentiate one organization from other,
and also as the most significant tool to achieve competitive advantage of organizations. Kidanemariam
(2016) concludes that the alignment of human resource management with organizational strategy
intent is positively related to performance. Based on his finding Kidanemariam also concluded that
effectiveness of performance depends on the effective management of human activities.
Strategic management focuses on developing internally consistent human resource activities to
build employees’ knowledge, skills, and abilities in an effort to support competitive strategies and
achieve business objectives. Aligning business strategies with human resource activities helps
a business in three ways. In the first place, the business can adapt to a change because the
time from the conception to the execution of a strategy is shortened. In the second case, the
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business can better meet customer demands because its customer service strategies have been
translated into specific policies and practices. Third and lastly, the business can achieve both
financial and non-financial performance through its effective execution of strategy.
2.2. Contingency theory
This study attempted to find out relationship between strategic alignment in the form of goal clarity, role
clarity and process clarity and organizational performance. According to contingency theory, perfor-
mance is balanced fits between organization’s strategy and its environmental context (McAdam et al.,
2019). This theory states that performance effectiveness depends on situational fit with business
strategies. As this theory, no single management system and/or situation is fit for organizational
effectiveness. The essence of strategic alignment is also fitness between different parts and components
of organizational working system for better performance achievement. The importance of contingency
theory for this study is to reside in fitness between strategic alignment dimensions used for study as goal,
role and process clarity. Contingency theory argues that there is no universally acceptable management
system applied equally at all organization in all conditions. But, it suggest that particular features of the
system and effectiveness of operating system is depending on organizational situation and contextual
factors. Therefore, it was used to investigate strategic alignment implementation level and organiza-
tional performance in sampled institutions as comparative analysis.
2.3. Goal setting theory
Goal setting theory stressed on importance of clarity of the goal to perform at the highest level and
achieve success (Asmus et al., 2015). This theory magnifies importance of strategic alignment for
performance improvement. Many professionals explain why goals are important for motivation, but
there are also several resources that provide guidance and guidelines for shaping objectives. Psychologist
Edwin Locke’s goal setting theory is one of the most popular models of employee mental readiness
through strategic alignment. This theory believes that goal-setting process is collaborative effort that
involves all parties imagining and working towards a common aim in tandem (Asmus et al., 2015). Goal
setting theory outlines five requirements for goals as it need to be clear, specific, and easy to understand,
push employees (challenging), pursues the objective wholeheartedly from its inception,
provides feedback and direction throughout the process to maintain momentum or encourage improve-
ment and set reasonable expectations and should divide larger projects into smaller, easier to tackle
tasks with steps, milestones, and regular review (Teo & Low, 2016). This theory is used to clarify
investigation of impacts of strategic alignment on organizational performance in the form of fitness
between clarity in the goal, clarity in the role and clarity in process.
2.4. Hypothesis development
2.4.1. Strategic alignment and organizational performance
The effectiveness of an organization will be realized when that organization achieves its predetermined
goals about the needs of stakeholders (Dreiss et al., 2017). This goal will not be achieved unless the
employees are aware about it and responsibilities. Alignment is a necessary condition for organizational
effectiveness. It helps to have common agreements about the goals and the means. Through that, all
parts, members and functions of the organization work towards the same purpose. Anthony-McMann
et al. (2017) recommend that the employees be precisely and accurately communicated on the strategic
and goals of the organization. This increased employees’ understanding of organizational strategies
leading to improved organizational commitment, job satisfaction, and trust among employees (Willems
and Ingerfurth (2018). Gorgi et al. (2019) also indicate that the level of performance is higher among the
employees who have a better understanding of organizational strategies and responsibilities.
Consolidation of synergy between strategy, processes, organizational resources and technological cap-
abilities is strategic means for organizational goal achievement (Chi et al., 2020). And they recommend
that the mission, objectives and plans of organization should be integrated and synchronized with
business strategies. Strategic alignment significantly and positively affects effectiveness of managerial
decision and achieve the greatest impact on organizational success (Ghonim et al., 2020). Chi et al. (2020)
suggested that keeping fit between organizational priorities and resources through strategic alignment
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enhances its response to environmental pressures and moves toward a higher level of performance by
integrating the main thrusts of the organization’s goals and objectives.
H1: Strategic alignment has positive significant effect on performance of higher educational institutions.
2.4.2. Dimensions of strategic alignment and organizational performance
2.4.2.1. Goal clarity and organization performance. Strategic alignment is related to organizational
performance through goal clarity. When all levels of employees in the organization have clear,
unambiguous views of the organization’s strategic goals; a culture of alignment is promoted. The
culture begins at the individual employee level and expands to linkages at the group and organi-
zation levels. Empirically, it also clarified that the motivation of strategic alignment in terms of
individuals is to create psychological stability of individual goals and actions whereas at organiza-
tional level it is to ensure high level of engagement toward the organization’s active support (Kim
et al., 2020). The core concept behind goal clarity is that it is important that need to be clear in
order to be perceived as important, thereby increasing one’s motivation to achieve it.
H2: Goal clarity has positive significant effect on performance of higher educational institutions.
2.4.2.2. Process clarity and organization performance. Processes clarity not only increases individuals’
understanding of their work objectives and paths but also emphasizes the alignment of colleagues,
teams, and organizations. Collective interaction among the team’s competencies can be improved by
clear goals and processes. Process clarity is the degree to which individuals are certain about how they
perform their duties. High clarity in process at the employee, team and organizational levels
helps members understand the procedures necessary to achieve goals. Hu and Liden (2015) posit that
clarity in goals and processes at the employee and team level is positively related to employee and team
performance as well as organizational efficiency as a whole. Clear procedures toward goals are also very
important for employee and team performance, because process clarity provides clearer and more active
plans and visible strategies to achieve the goal. Empirical evidences reveal that poor or incomplete
definition of the work content of a role, unclear relationships between roles, overlapping work boundaries,
or inappropriate authority causes confusion and uncertainty and will ultimately result in poor perfor-
mance, poor morale or conflict. Role clarity extends beyond the tasks in the position description and it
includes the broader accountabilities of all employees on how they are to work with their manager, their
team and others in the organization. Clarity on how people work together is about understanding roles
and respecting those roles. It is with clarity that individuals, teams and the organization can work
together to perform their work (Onuoha et al., 2016).
H3: Process clarity has positive significant effect on performance of higher educational institutions
2.4.2.3. Role clarity and organization performance. Role clarity is the degree to which employees
have a clear perception of their role expectations and actions. If roles are not clear, employees
avoid their job responsibilities which lead to tension and make it difficult to achieve strategic goals
or exerting a negative effect on organizational performance. Clarity on the tasks to be performed
relates to how organizations define, align and cascade their work, including their strategic goals (Al
Khalifa, 2016). This requires every manager at every level to provide. It mainly concerned with
clarity about what is expected and the boundaries within which they must work. Role clarity create
shared understanding of the work to be performed in an organization (Ghonim et al., 2020). It
mainly dealing with clarity in role design, clarity in direction and clarity in assigned task.
H4: Role clarity has positive significant effects on performance of higher educational institutions
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3. Conceptual framework
For this study, the relations between constructs were depicted by measurement and structural models
between latent and observed variables as well as relation between two latent variables. The study
has two latent constructs (strategic alignment and organizational performance) with three by three
observed variables. Strategic alignment construct represented by three observed variables as goal clarity,
role clarity and process clarity. Organizational performance construct represented by indicators like
quality in service, quality of research output and competency in graduate students. For each latent
variable there are questions that indicated by single line on graph in figure 1 represents the relation
between independent and dependant variables of study with their respective indicators.
Where SA represent strategic alignment
GC >> Goal clarity
PC >> Process clarity
RC >> Role clarity
OP >> Organizational performance
QS >> Quality in service (Service quality)
QRO >> Quality in research out put
CGS >> Competency of graduate students
Σ >> Error
4. Methodology
Quantitative research approach with both descriptive and explanatory study design was employed.
To explain the nature and characteristics of the units in the sample, a descriptive study design was
adopted. The influence of strategic alignments on organizational performance was investigated
using an explanatory design. Using their generational and excellence classifications, three uni-
versities were chosen.
The target population comprised universities that fall under the first, second, and third classes
based on generation and the research, applied, and comprehensive classifications based on excel-
lence. Three universities from both classes were purposefully chosen based on proximity and
locational convenience for researcher. This leads to the selection of Hawasa from the first and
research domain, Wolaita Sodo from the second and applied domain, and Bule Hora from the third
and comprehensive domain. The study’s population reflects the combined numbers of academic and
Figure 1. Conceptual
framework.
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administrative staff at those three universities. Table 1 shows the stratified target population of the
study according to the human resource data of the three universities.
Because of the nature of the study, employees who cannot be governed by local or conventional
human resource policies and practices were excluded. As a result, all expatriate and temporary
employees were excluded from sampling frame.
Because of the size of target population; Rosenheim and Hoy (1989) formula is preferred to be
employed to determine sample size and 376 employees were selected as a sample from three
Universities with proportional sample size from each University with total population they have.
Proportional quota sampling was applied in each university based on the 4-pillars of university good
governance, teaching and learning, research and communities services. Accordingly, 25% quota for
administrative staff and 75% quota were given for academic staff. Simple random sampling technique
was employed to select sample from both wings. Data were collected with 5-point Likert scale and open
ended questions. Likert scale question is preferred because of its ability to reduce the risks of an
expression of opinion by respondents being influenced by their opinion on only one or two aspects of
that situation. Among the Likert scale types, five points scale questions were used because of its
simplicity to be understood by both survey administrator and respondents. Accordingly sample size
selection in each university was made based on proportional rate as follows.
Data were analyzed using both descriptive and structural equation model. Descriptive statistics
such as mean and standard deviation were employed, whereas, confirmatory factor analysis and
path analysis were used for structural equation model.
4.1. Model specification
Model specification involves determination of relationships between variables and number of para-
meters interested to the researcher in the model (Khine, 2013). Since model specification is about
explaining parameters included or excluded in the model with respective relationships among the
variables, researcher tried to enumerate parameters included in this study with their respective
relationships. While the objective of a study is to examine a relationship between independent and
dependent variable, there is a need to model the theorized relationship to test it with the empirical
data from the fields:
When Y= Overall organizational performance
ß0= Constant values of regression
ß1–3= unstandardized Beta coefficients
Σ = Error
4.2. Validity and reliability
Scale questions used for data collection were checked for the pattern of the responses given from
participants (unidimensionality) using item-to-rest correlation. All scale items used for data collec-
tion for this article have item-to-rest correlation coefficients greater than 0.3 which is acceptable
level as per rule of thumb. Reliability of instruments used for data collection was checked using
Cronbach’s alpha values and approved that data is highly reliable with Cronbach’s Alpha value of
0.895. Content validity of instruments was checked with peer review and also questions were given
for senior researchers and professors and approved. Validity and reliability of instruments were
further checked and approved using confirmatory factor analysis.
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Table 1. Target population in each University
S/n Universities Targeted populations G/total
Academic staff Admin staff
Male Female S/total Male Female S/total
1 Hawasa 1327 276 1603 3690 3673 7363 8966
2 Wolaita Sodo 757 132 889 2114 2294 4408 5297
3 Bule Hora 657 53 710 1144 1234 2378 3612
Total 2741 461 3202 6948 7201 14149 17875
Source: researcher survey result, (2022).
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5. Data analysis and presentation
5.1. Comparative analysis of application level of the concepts among study institutions
Clarity in goal, role and process was used to investigate influence of strategic alignment on organiza-
tional performance. Descriptive analysis was used to explain application of strategic alignment level
and to describe status of organizational performance in the institutions of the study. Average mean of
responses of participants was used to identify application level as per understanding of the partici-
pant. Large value of average mean represents good application of the issue under study whereas,
small average mean indicate low applications. Among 391 distributed questionnaires 376 were
collected and used for data analysis with approximately 96% response rate.
Based on the summary of participants’ responses about implementation of study concepts, level
of strategic alignment implementation is better in Wolaita Sodo University with average mean of
3.03 followed by Hawasa University with average mean of 2.87, whereas, average value of the
participant responses about implementation level of strategic alignment in Bule Hora University
was 2.50. The variability among institution in implementation level of strategic alignment as it can
be seen from average mean value table above are statistically significant at 1% significance level.
Moreover, organizational performance also higher in Wolaita Sodo with average mean of 3.49
followed by Hawasa University with average mean responses of 3.38, but performance in Bule Hora
University is lower than others two Universities with average mean responses of 2.95.
Level of implementation of the study concepts varies among institutions at statistically signifi-
cant level. The variability among the institutions with regard to implementation of strategic
alignment and organizational performance was tested using ANOVA and it is statistically signifi-
cant at 19.40 f statistics and at p-values of 0.0000 for strategic alignment, whereas, organizational
performance varies statistically at significant level with 21.78 f statistics and at p-values of 0.0000.
The results from descriptive analysis show that performance is analogous with implementation
level of institution strategic alignment. Hence, performance is better in university where strategic
alignment is higher than others. Accordingly, both strategic alignment level and performance are
higher in Wolaita Sodo University, followed by Hawasa University which is average mean responses
of 3.03 and 2.87 respectively. In Bule Hora University, both average mean of responses for
Table 2. Sample size in each university
S/n Names of
Universities
Target
population
Proportional
rate
Sample size
assigned
1 Hawasa 8966 50% 188
2 Wolaita Sodo 5297 30% 113
3 Bule Hora 3612 20% 75
Total 17875 376
Source: Constructed by researcher (2021).
Table 3. Summary statistics: mean standard deviation by University
Dimensions BHU HU WSU ANOVA
mean sd mean sd mean sd F p(sig)
Strategic
alignment
2.50 .62 2.87 .64 3.03 .51 19.40 0.0000
Organization
performance
2.95 .63 3.38 .64 3.49 .55 21.78 0.0000
Source: researcher survey result (2023).
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strategic alignment and performance are lower than two universities with mean values of 2.50 for
strategic alignment and 2.95 of organizational performance.
The results from descriptive analysis above reveal that there is positive relationship between
strategic alignment and organizational performance. This result has conformity with findings of
Smith & Thomas, (2020) who have studied about performance effects of strategic alignment and
clarity. Smith & Thomas concluded in their research that alignment in strategy as performance
measure and strategic clarity as mechanism to ovrcome negative performance effect. This study
result also has conformity with conclusion of AL-Hashem and Orabi (2021) study on Impact of
Strategic Alignment and Strategic Awareness on Strategic Performance, who has concluded as
strategic alignment has a positive and significant impact on strategic performance. Table 2 below
show sample representatives in each sampled university based on proportional ratio of the target
population in each institution.
5.2. Measurement model
The relation among study variables was tested using Stata SEM builder through two stage
procedure. Confirmatory factor analysis (CFA) was used to test measurement model to evaluate
whether all indicators represent respective construct. After achievement of satisfactory fit of
measurement model, structural model was estimated to test causal effect relation between latent
variables. The figure in table 3 indicates comparative implementation level of study concept
among sampled institutions. As it can be seen from the mean values in the table level of
implementation is vary among institutions.
For this study analysis, covariant-based structural equation modeling was employed because of
the large sample size used for data collection. The SEM model testing is done in stages ways. The
original model was revised due to failure of model goodness fit obtained from test result. The first
step attempted to improve model fitness was application of modification indices and error var-
iances were correlated, but model fitness was not achieved. After modification indices trial were
failed questions with low factor loadings were deleted. Finally, model goodness of fit was achieved
after 7 questions were deleted from organizational performance construct. The results of data
processing and analysis in the full SEM model were carried out through a goodness of fit test
statistics after approval of model fitness. Accordingly, the results of goodness of fit test can be
seen in Figure 2. The table 5 below show the summary of measurment model goodness of fit.
Standard CFA factor loadings of each scale were assessed for construct validity. Each item
suggested having values of above minimum threshold of factor loading of 0.6 for acceptable
construct validity (Nunnally, 1978). As it can be seen from Table 4 factor loads of minimum .78
and all mean average extracted are greater than 0.50 cutoff points which is indication of good
convergent validity. Discriminate validity of the indicators was checked by Squawroots of average
mean extracted and all values are greater than the values of covariant among latent constructs.
Composite reliability of each construct is above .70 and it indicates reliability of instruments.
Figure 2. Structural model.
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5.2.1. Goodness of-Fit test for measurement models
The result of confirmatory factor analysis showed that the chi-Square value 476.871, the degree of
freedom value is 276 and probability level is (p > 0.001). The chi-Square value indicating that the
model is not good fit for the data. But due to sensitivity of χ2 with sample size scholars suggested
not to use χ2 as a formal test statistic but rather as a descriptive goodness-of-fit index (Ullman &
Bentler, 2012). Goodness of model fit as per χ2 statistics may result from a correctly specified
model or from a highly over parameterized model. Thus, use of χ2 for evaluation of basic model fit
may lead to the problem that plausible models might be rejected based on a significant χ2 statistic
Figure 3. Path analysis.
Table 4. Reliability and validity of instruments
Construct Number of
items
Factor
loading
AVE Sqrt of AVE CR
Goal clarity 3 .81
Process clarity 2 .74 .58 .76
Role clarity 3 .73
Quality of
service
3 .76 0.75
Quality R/output 3 .87 .68 .82
Competence of 3 .84
Graduate
students
Table 5. Test results of the goodness-of-fit model CFA
No Index Critical Value Results Model fit
1 Chi Square The smaller the
better
476.871 Less Fit
2 CMIN/DF <2.00 276 Les Fit
3 CFI ≥0.95 0.956 Fit
4 RMSEA ≤0.08 0.055 Fit
5 TLI ≥0.90 0.946 Fit
6 CI ≤0.50 0.048 Fit
7 SRMS ≤0.60 0.041 Fit
8 CD Close to 1 0.999 Fit
Source: Researcher survey result (2023).
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even though the discrepancy between the sample and the model-implied covariance matrix is
actually irrelevant (Jöreskog & Sörbom, 1993). Because of the limitation of the χ2 goodness-of-fit
tests, alternative descriptive fit indices have been developed that are often assessed intuitively.
These alternative fit indices are based on the difference between the sample covariance matrix
and the model-implied covariance matrix.
In practical application, exact fit of hypothesized model is rare. Therefore, estimation of model
fitness is more of approximate fits in the population and close fit to the data (Kaplan, 2000). In this
regard, the fitness of the model for this research article is based on this fact and considers close fit
as acceptance for model. The value of RMSEA for this study is 0.055 which found in the values
between .05 and .08 and considered as an adequate fit. Model is acceptable with this value as it
recommended by Hu and Bentler (1999) values less than .06 as a cutoff criterion. Model fitness
from RMSEA can also be evaluated by the point estimate enables an assessment of the precision of
the RMSEA estimate. MacCallum et al. (1996) proposed that the lower boundary (left side) of the
confidence interval should contain zero for exact fit and be < .05 for close fit. Accordingly, the lower
bound of this research model is below suggested close fit value of .05 which is .048. Thus, the
model is close fit for the data.
The second descriptive fit index used for this research model validation is SRMR (Standardized
Mean Square Residual) with value of .041 which is lower than cutoff points of rule of thumb and
indication of close fit of model for the data. Therefore, the model is close fit for data.
Another measure of goodness fit of the model is comparative fit index which measure the fit of
a model of interest is compared to the fit of some baseline model. The cutoff of acceptable level of
the rule of thumb for this index is that .95 for relative fit to the baseline model (Kaplan, 2000). But
Marsh and Grayson (1995) and Lomax and Schumacker (2004) suggested the values greater than
.90 are typically interpreted as indicating an acceptable fit. Therefore, the values of comparative
index (CFI) for this study is .956 which is good indication of comparative fit that above cutoff
points. It is always possible that a model may fit the data although one or more fit measures may
suggest bad fit (Schermelleh-Engel et al., 2003).
5.2.2. Structural model (causal model) analysis
The default model chi-Square result for structural model is 28.877 at the degree of freedom value
of 6 with probability of significance level (P < 0.05). Independent model chi-Square value for the
model is 1133.399 at the degree of freedom value of 15 with probability level of significance (P <
0.05). Model is not good as per the chi-Square values. Therefore, another model fitness indexes
were employed to assess structural model fitness. The model is fit for comparative fit indexes (CFI
= 0.980 & TLI = 0.949) which are higher than acceptable cutoff points of 0.90 (Lomax &
Schumacker, 2004). This structural model is also fit as per the SRMR fitness index with 0.023
value which is below suggested upper limit of 0.05 (MacCallum et al., 1996). The graph in the figure
3 represent the path model that show the effects of explanatory variables on predicted variable.
Table 6. Standardized pathways and effects of Model
No Hypothesis Structural
pathways
Path coefficients
(Standardized)
p value
1 H1 GC → OP .2828768 .000
2 H2 PC → OP .1616817 .000
3 H3 RC → OP .401813 .000
4 H4 SA → OP .67 0.000
Source: Researcher survey result (2023).
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Path analysis is a technique to analyze causal relationships that occur in multiple regressions
when the independent variables affect the dependent variable not only directly but also indirectly.
Scholar define path analysis as an analytical technique used to analyze inherent causal relation-
ships between variables that are arranged based on sequence by using path coefficient as the
amount of value in determining the magnitude of the effect of exogenous independent variables
on the endogenous dependent variable (Sarwono, 2011). For this research, Path analysis was used
standardized coefficient ‘beta weight (β) that indicates the direct influences of exogenous vari-
ables (Goal clarity, Process clarity and Role clarity) on an endogenous variable (organizational
performance) in this path model. In this path model, only direct effects were found because of an
absence of mediating or moderating variables between study variables. Table 6 show the summary
of hypothesis test with standard path coefficients represting magnitude of influences of explana-
tory variable on pridected variable.
The goodness of model fit with theoretical one in this path analysis is determined by simulta-
neous effect contributed from all exogenous variables together on to the endogenous variable
whose value is associated with R
2
. The R
2
value in path analysis is known by coefficient of
determination which also referred to as the association index. This value is used as a value scale
to express the magnitude of the effect of all exogenous variables on endogenous variables
simultaneously or referred to as the combined effects. Explanatory variables have 48% of power
to explain variability in dependent variable all together.
Path coefficients were significantly fit in predictive direction. That indicates all hypothesized path
relations are supported. Since p values of all variables are less than 0.05; relation between
variables is statistically significant at 1% significant level.
5.2.2.1. Strategic alignment has significant and direct effect on organizational performance. The
significance value of the variables is (P < 0.01) which is far less than 0.05 points of null hypothesis
rejection level. Therefore, null hypothesis was rejected and researcher hypothesis was accepted.
Hence, there is significant direct effect of strategic alignment on organizational performance.
Therefore, regression coefficient of the variables for the effect was interpreted as follow. One
standard deviation improvement of strategic alignment in institution leads to 0.60 standard
deviation improvements in organizational performance assuming all other variables unchanged.
6. Discussion
The objective of this study was to investigate the effect of strategic alignment on organizational
performance in Ethiopian higher educational institutions. In order to achieve objectives informa-
tion was collected in a field from three universities staff and analyzed by CFA and path analyses
using stata SEM builder. The variables like goal clarity, role clarity and process clarity were
identified as dimension of strategic alignment and investigated for their effects on organizational
performance. All items used for data collection were conformed as it represent respective latent
construct through confirmatory factor analysis. Factor loadings of each item were above the cut
off points stipulated by the rule of thumb 0.6 acceptable (Nunnally, 1978).
All three variables identified to measure influence of strategic alignment on organizational
performance have significant effects on organizational performance. This findings support con-
tingency theory which states that “the balance between the organization’s strategy and its
environmental context has significant impacts on performance” (McAdam, Miller, & McSorley,
2019). This result implies that clarity in the goal if backed by clarity in the task assigned to achieve
stated goal with clear procedures through which assigned tasks performed enhances performance.
It confirms contingency theory statements stating fitness and balances between component parts
lead to higher performances.
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The result of this study reveals that organizational performance varies among the institution
based on strategic alignment implementation level. In the institution that have good implementa-
tion of strategic alignment in the form of clarity in the goal, role and process; there is higher
organizational performance level. Accordingly, Wolaita Sodo University has relatively higher per-
formance achievement than two Universities Hawasa and Bule Hora. Low-performance achieve-
ment was recorded in Bule Hora University both at strategic alignment implementation level and
organizational performance. Findings reveal that there is logical connectivity between strategic
alignment and organizational performance as it observed from all three universities. It reflected
through that in the University where implementation level of strategic alignment is good; organi-
zational performance also good and performance is low where strategic alignment implementa-
tion is lower.
This finding contradicting with findings of Smith and Thomas (2020). The authors conducted
their study on the title effects of strategic alignment and clarity and found out that strategy
consistent performance improves with alignment when the strategic statement is vague. But it has
conformity with the findings of Ghonim et al. (2020) that reveal strategic alignment significantly
and positively affects decision effectiveness which in turn enhances organizational performance.
Previous empirical literature reveal that the concept of strategic alignment involves the idea of
achieving a degree of compatibility and harmony among a range of organizational elements that
ensures achievement of the strategic priorities of the organization (Alkarabsheh et al., 2022;
Visinescu et al., 2017). Keeping the fit between employees’ understanding and action with that
of organizational strategic priorities enhances response to environmental pressures and moves
toward a higher level of performance (Chi et al., 2020). The results of our study confirm these
empirical evidences. Descriptive analysis of this study reveals that application of strategic align-
ment in the form of Goal clarity; role clarity and process clarity in Ethiopian higher educational
institutions are at moderate level with average mean of response rates around 3.00 with slight
difference among variables. But overall applications among the institutions have differences
including organizational performances.
The results of structural path analysis show that the sum total effects of strategic alignment on
organizational performance accounts more than 67% in the variance of performance. The effects
of individual variables representing strategic alignment are higher for goal clarity which accounts
around 22% of variation in organizational performance, whereas, the effects of clarity in the role is
higher than process clarity which has 21%. Process clarity has around 12% share of effects on
organizational performance. All variables have positive effects as improvements in those variables
lead to higher performance in organization.
6.1. Conclusion and implication of the study
The major aim of this study was investigation of effect of strategic alignment on organizational
performance. Organizational performance is the sum total effort of individual and team works
towards organization goal achievement. Effectiveness of individual and team performance deter-
mined by knowledge they have about the goal and intended organizational strategies. Clarity in
the goal with specified tasks and procedures enhances employee moral to perform well. Therefore,
investigation of strategic alignment in public institutions and effects on organization performance
is important to improve effectiveness in goal achievement.
From the result of the study, researchers conclude that all three variables identified to examine
effect of strategic alignment on organizational performance have significant relation with depen-
dent variable. In general, researchers concluded that clarity in the goal, clarity in the role assigned
to and clarity in process how to perform assigned task have significant effects on organizational
performance. Study concluded that performance variation among public higher educational insti-
tutions is result of variability in strategic clarity. This finding has practical managerial implication
by indicating significance of clarity in goal, role and process for performance improvement. This
Gede & Huluka, Cogent Business & Management (2023), 10: 2247873
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study shows managers how clarity of goal and tasks for employees is a key for management
function and help to insure higher level of performance. Clarity in the goal to be achieved and
specification in the tasks to be performed with clear procedure enhances employee motivation to
be dedicated for organization. Employee dedication has positive implication on performance.
Scholars in this area suggests that organizations should strive constantly to enhance role clarity
among employees as they remain motivated and involved in their jobs and exhibit innovative
behavior at work (Alkarabsheh et al., 2022; Kundu et al., 2021; Lynn & Kalay, 2015; Mehboob &
Hina, 2011; Onuoha et al., 2016; Park & Choi, 2020). This study has practical implication as it show
the way how to attain strategic priority of organization through employee motivation with strate-
gic clarity. It indicates strategic communication between administrators and staffs. Our study
result has managerial implication of how become proactive leader than reactive decision makers.
Strategic alignment open the room for employees to learn more about organizational policy and
direction and initiate them for innovation (Al-Shami et al., 2022). This study has implication for
contingency and goal setting theories. Study result supports contingency theory stating fitness
between parts in organization enhance performances. It also confirm statements of goal setting
theory saying participatory goal setting is means through which performance is improved. Study
result shows clarity in the goal improve performance. Findings of this study enrich management
literature with regard to the concepts of study.
6.2. Limitation and suggestion for future researchers
This study was limited to higher educational institutions in Ethiopia. Further researchers need to
widen geographical and institutional scope to include other country or other sectors. For this
article only quantitative data was employed to analyze application level of strategic alignment
and to examine the effects of strategic alignment on organization performance. Further research-
ers need to include qualitative information for further conformity of the findings. This study limited
only to strategic clarity dimension of strategic alignment as goal, role and process clarity. Further
study should include other dimensions. For this study one time survey cross-sectional data were
used. Therefore, other researchers can use longitudinal design.
Author details
Dawit Udessa Gede
1
E-mail: dawitudessa2008@gmail.com
ORCID ID: http://orcid.org/0000-0003-2032-016X
Admasu Tesso Huluka
2
ORCID ID: http://orcid.org/0000-0002-1946-0977
1
Department of Management, College of Business and
Economics, Bule Hora University, Bule Hora, Ethiopia.
2
Department of development economic College of
Finance, Management and Development Ethiopian Civil
Service University, Addis Ababa, Ethiopia.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Citation information
Cite this article as: The impact of strategic alignment on
organizational performance: The case of Ethiopian
universities, Dawit Udessa Gede & Admasu Tesso Huluka,
Cogent Business & Management (2023), 10: 2247873.
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