The influence of strategy‐making types on IT alignment in SMEs

Abstract

PurposeThe purpose of this paper is to evaluate and compare the influence of three strategy‐making modes (planned, adaptive and entrepreneurial) on IT‐business strategy alignment in small to medium‐sized enterprises (SMEs).Design/methodology/approachEmpirical research using a questionnaire was conducted. In total, 108 SME owners and managers participated in the study and the data were analysed using quantitative techniques.FindingsThe planned mode provided better results as predicted. Each strategy‐making mode was found to influence certain specific aspects of alignment and performance. For instance the planned mode ensures better understanding of business and IT objectives and provides high growth sales. The adaptive mode encourages participation of stakeholders in planning and improves communication and staff productivity. The entrepreneurial mode can facilitate immediate revision of plans in organizations operating in dynamic and competitive environment.Research limitations/implicationsMany factors influencing alignment were excluded. Second, the study was conducted in only three provinces and excluded the views of staff and IT personnel. These limit generalization of findings.Practical implicationsAssistance in planning and access to support programmes are necessary. Understanding the impact of SME characteristics can also assist the government in prioritizing resource allocations and focusing development programmes. The inconclusive results of this study, the impact on alignment of practices such as corporate governance, use of the balanced scorecard, and affirmative action should be researched further.Originality/valueThis was the first attempt to investigate the relationship between strategy‐making practices and IT alignment in South African SMEs. It provides empirical evidence confirming that these practices influence specific aspects of alignment and performance. SME managers can adopt the approach used to identify practices that ensure better alignment.