Testing a model of the relationships among organizational performance, IT-business alignment ...

211 Pages·2003·1.81 MB·English

by  Sanchez Ortiz, Aurora

TESTING A MODEL OF THE RELATIONSHIPS AMONG ORGANIZATIONAL
PERFORMANCE, IT-BUSINESS ALIGNMENT, AND IT GOVERNANCE
Aurora Sanchez Ortiz, B.S., M.S.

Dissertation Prepared for the Degree of
DOCTOR OF PHILOSOPHY

UNIVERSITY OF NORTH TEXAS
December 2003

APPROVED:
Leon A. Kappelman, Major Professor
Victor R. Prybutok, Minor Professor
Chang E. Koh, Committee Member
Brian C. O’Connor, Committee Member and
Associate Director of the Interdisciplinary
Information Science Doctoral Program
Philip M. Turner, Dean of the School of
Library and Information Sciences
Sandra L. Terrell, Interim Dean of the
Robert B. Toulouse School of Graduate
Studies
Sanchez Ortiz, Aurora, Testing a model of the relationships among organizational
performance, IT-business alignment and IT governance. Doctor of Philosophy
(Information Science), December 2003, 199 pp., 50 tables, 28 figures, references, 187
titles.
Information Technology (IT) is often viewed as a resource that is capable of
enhancing organizational performance. However, it is difficult for organizations to
measure the actual contribution of IT investments. Despite an abundance of literature,
there is an insufficiency of generally applicable frameworks and instruments to help
organizations definitively assess the relationship among organizational performance, IT-
business alignment, and IT governance. Previous studies have emphasized IT-business
alignment as an important enabler of organizational effectiveness; however, the direct
and indirect effects of IT governance have not been incorporated into these studies.
The purpose of this study was (1) to propose a new model that defines the
relationships among IT governance, IT-business alignment, and organizational
performance, (2) to develop and validate measures for the IT governance and IT-
business alignment constructs, and (3) to test this IT Governance-Alignment-
Performance or ”IT GAP” model.
This study made some novel contributions to the understanding of the factors
affecting organizational performance. The quest for IT-business alignment in the MIS
literature has been based on the presumption that IT contributes directly to
organizational performance. However, this study found that although IT-business
alignment does contribute to organizational performance, IT governance is an
important antecedent of both IT-business alignment and organizational performance.
The major contributions of this work are the development and validation of uni-
dimensional scales for both IT-business alignment and IT governance, and the
confirmation of the validity of the IT GAP model to explain the hypothesized
relationships among the three constructs. Future studies may improve upon this
research by using different organizations settings, industries, and stakeholders. This
study indicates that in order for organizations to improve the value, contribution, and
alignment of IT investments they first need to improve the ways in which they govern
their IT activities and the processes and mechanisms by which IT decisions are made.
Copyright 2003
by
Aurora Sanchez Ortiz

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ACKNOWLEDGEMENTS

The journey of writing this dissertation could not have been accomplished
without the valued contribution of several individuals whom I want to presently
acknowledge and sincerely thank for their support and encouragement.
I would like to express my sincere gratitude to my dissertation Chairperson, Dr.
Leon A. Kappelman, for his invaluable guidance, expertise, encouragement, and
patience. I want to recognize the enormous amount of time spent commenting,
suggesting, reading, and sharing their knowledge to the improvement of this
dissertation. To the other members of the committee, Dr. Victor R. Prybutok, Dr. Chang
Koh and Dr. Brian O’Connor, my deepest gratitude for their invaluable suggestions and
support for the improvement of this dissertation.
As a Fulbright Grantee and a Professor of the “Universidad Catolica Del Norte” in
Chile, I want to thank them for their generous scholarship throughout my graduate
studies. My deepest gratitude goes to my University, which has made my academic
career a reality.
I would like to express my sincere gratitude to my husband, Marco Antonio, and
daughters, Antonia and Javiera, for their endless love and care. Finally, I want to thank
my parents, Jorge and Rosita, for their infinite love.

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TABLE OF CONTENTS
Page

ACKNOWLEDGEMENTS…………………………………………………………………….……………. iii
LIST OF TABLES …………………………………………………………………………………………… vi
LIST OF FIGURES…………………………………………………………………………………………... ix
Chapters
1. INTRODUCTION………………………………………….…………………………………….. 1
Overview
Statement of the Problem
Significance of the Study
Theoretical Foundations
Purpose of the Study
Research Questions
2. LITERATURE REVIEW……………………………………………………………………….. 17
Information Technology and Organizational Performance.
IT-Business Alignment
IT Governance
Proposed Model and Hypothesis
3. MATERIALS AND METHODS………………………………………………………………… 50
Overview
Development and assessment of the Instruments
Approach for fit and analytical issues
Survey methods and subjects
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Procedure for analysis
4. RESULTS …………………………………………………………………………………………… 84
Survey Response Results
IT Governance Instrument
IT-Business Alignment Instrument
Organizational Performance Instrument
5. DATA ANALYSIS ……………………………………………………………………………… 101
Introduction
Data Screening
Validity and Reliability Analysis
Model Assessment
6. SUMMARY AND CONCLUSIONS……………………………………………………….… 150
Summary of the study
Summary of Findings
Limitations of the study
Recommendations for Future Research
Implication and Conclusions
APPENDIX A …………………………………………………………………………………………….. 161
APPENDIX B …………………………………………………………………………………………….. 169
APPENDIX C …………………………………………………………………………………………….. 172
APPENDIX D …………………………………………………………………………………………….. 177
REFERENCES LIST………………………………………………………………………………………. 183
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LIST OF TABLES

1. Model used to define and assess Organizational Effectiveness. (Adapted from
Cameron and Whetten, 1983a) ...................................................................... 20
2. Comparison of Balanced Scorecard and MBNQA (adapted from Hoque, 2003)........ 28
3. Strategic alignment perspectives (adapted from Papp, 2001)................................ 36
4. Pattern of Perspectives of Strategic Alignment for IT Managers and Business
Managers (Burn & Szeto, 2000)....................................................................... 38
5. Corporate Governance and IS/IT Governance Comparison (Korac-Kakabadse and
Kakabadse, 2001).......................................................................................... 43
6. IT-Business Alignment Instrument...................................................................... 53
7. IT Governance Instrument................................................................................. 55
8. Business Result Dimension of MBNQA Instrument................................................ 58
9. Classificatory scheme for mapping the six perspectives of fit in strategy research
(Adapted from Venkatraman 1989).................................................................. 59
10. Difference of means between early and later respondents.................................. 85
11. Distribution of Respondent by Departments....................................................... 87
12. Gender Distribution......................................................................................... 88
13. Age Distribution.............................................................................................. 88
14. Education Distribution ..................................................................................... 88
15. Years at the City of Denton.............................................................................. 89
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16. Years in their Current Job................................................................................ 89
17. Years Using IT................................................................................................ 90
18. IT dependency................................................................................................ 91
19. Demographic Variables Measures ..................................................................... 91
20. Crosstabulation of IT Dependence by age......................................................... 92
21. Software Usage and Training Demand.............................................................. 93
22. Job Type........................................................................................................ 95
23. Descriptive statistic for IT Governance.............................................................. 97
24. Descriptive Statistic for IT-Business Alignment................................................... 98
25. Descriptive Statistic for Organizational Performance..........................................100
26. Cronbach’s Alpha as Reliability Measures..........................................................104
27. Correlations among the Items on the IT Governance Instrument .......................105
28. Correlation Among the Items on the IT Business Alignment Instrument..............106
29. Correlation Among Items on the Organizational Performance Instrument............107
30. KMO and Bartlett’s test for IT Governance........................................................111
31. Factors extracted using IT Governance measure: Variance Explained……….........112
32. Factor Matrix for IT Governance......................................................................112
33. KMO and Bartlett’s Test results for IT Business Alignment.................................113
34. Factors extracted from the IT Business Alignment Instrument............................114
35. Factor Matrix for the IT-Business Alignment Instrument....................................115
36. KMO and Bartlett’s Test for Organizational Performance....................................116
37. Factors extraction for Organizational Performance Instrument...........................117
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38. Factor Analysis: Patter matrix of the loading for the Organizational Performance
Instrument in two factors...............................................................................118
39. Factor matrix for a unidimensional factor in Organizational Performance.............119
40. Item Total Correlation for IT Governance, IT-Business Alignment and Organizational
Performance.................................................................................................120
41. Factors extracted from all the variables in the model.........................................123
42. Rotated Matrix with IT-Business Alignment, IT Governance, and Org. Perf..........124
43. Factor Correlation Matrix.................................................................................125
44. Stepwise Regression with Organizational Performance as a dependent variable:
Models Summary, Coefficient, and ANOVA ......................................................129
45. Model fit for measurement models of the constructs.........................................134
46. Fit indexes for the model with a pair of constructs............................................138
47. Goodness of fit measures for the Initial IT GAP model.......................................142
48. Comparison of Goodness-of-fit Measures for GAP Models ..................................146
49. Hypothesis analyses.......................................................................................147
50. Summary of Support for Hypotheses................................................................155
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