The relationship of strategic business alignment and enterprise information management in achieving better business performance

Abstract

Four constructs are developed and five research hypotheses are tested in a structural equation model focused on the role of strategic business alignment and information management in achieving business performance. The data to develop the constructs and test the model are based on a survey of 226 manufacturing firms in the US automobile components industry. The research is interdisciplinary in nature with a focus on building theory in an under-researched area of study by testing a causal model. The structural equation model analysis supports the general theory that ‘the degree of business strategy alignment affects enterprise information management and time-related operating performance, and through these two intermediate constructs, improves business performance’. Enterprise information management is the key mediating variable in the causal model. Other insights based on statistical evidence are presented such as strategic business alignment, which do not directly improve time-related operating performance but must act indirectly through enterprise information management (the mediation construct) to improve performance.