IT– Business Strategic Alignment in Influencing Sustainable Competitive Advantage in Jordan: Structural Equation Modelling (SEM) Approach

Abstract

In many review articles or studies, the researchers have encouraged further exploration on the causal links between Information Technology (IT) investments and a firm’s sustainable competitive advantage. The outcomes of empirical studies have been inconclusive, which is to a certain extent due to the omission of IT-business strategic alignment. Indeed, strategic alignment has emerged as one of the most important issues facing business and IT executives all over the world. This paper reports on the empirical investigation of the success factors, which consist of leadership, structure and process, service quality, and values and beliefs, which are representative of the culture gap between IT strategy and business strategy. A questionnaire survey among 200 IT managers was carried out and 172 data sets were collected. This represented a 86% response rate. After a rigorous data screening process including outliers, normality, reliability and validity, 172 data sets were ready for structural equation modelling (SEM) analysis. Confirmatory Factor Analysis (CFA) was performed to examine the composite reliability, convergent validity and goodness of fit of the individual constructs and measurement models. The revised structural model demonstrates the relationships between all the four exogenous variables and IT-business strategic alignment, and all the four exogenous variables and sustainable competitive advantage. In addition, regarding the revised model there are two mediating effects of strategic alignment in the relationship between leadership, structure and process, service quality, values and beliefs, and sustainable competitive advantage.   Keywords: Strategic alignment, alignment gap, information technology, sustainable competitive advantage.