Title of the Research: Critically
Analyzing the Impact of Strategic Business Alignment on Organizational
Performance in the Oil and Gas Industry of the Kingdom of Bahrain
The importance of
aligning business IT strategies is illustrated in many studies and it is
considered one of the main issues facing organizations for the last two decades
(Luftman et al., 1996). However,
ambiguity is still exists regarding the nature and characteristics of the
alignment, linkage and integration (Chan, Reich, 2007). Studies in this area
have not yet provided sufficient researches on the factors affect the business IT
alignment and go beyond listing them.
Farrell (2003) points out that there are several culturally-specific
antecedents to alignment to be examined
(Luftman 1996, Yetton 1997, Hsaio Ormerod 1998, Burn 1997; Chan et al,
2006). A gap this research attempt to fill by studying the factors affecting
the use of the strategic alignment model and investigate its implications on
the organizational performance of the public organizations . This contribution
will allow managers and public organization executives to control the factors
affecting this alignment leading them to achieve better performance. This
research concludes by proposing a practical use of strategic alignment model
that allows organizations to control the factors affecting the alignment paving
the way for further researches in this area
and provides scholars with empirical data on the strategic alignment. As such this paper provides an overview of research
being undertaken in pursuit of exploring these aspects.
Objective
1: To critically review the strategic alignment models and understand the area
with a particular focus on its implications on the organizational performance.
Objective 2: To investigate the factors
influencing strategic alignment
Objective 3: To develop a
conceptual model that explains the relationships between the strategic
alignment, the identified factors and the organizational performance.
Objective 4: To validate the proposed model for strategic alignment in
public organizations
Research Question:
1.
Do the use of information technology and other elements
like the size of the organizational and the type of strategic alignment has the
critical implications to the organizational performance?
2.
What are the factors and approaches that affects the
adoption of strategic models that could enhance the business performance in the
oil industry in the Kingdom of Bahrain.
3.
What are the components and the criteria that are
aligned with the strategic model and how these alignments are evaluated?
Scope
of the Studies:
Although information technology was not lived
up to the organizations’ expectations of enhancing performance and
competitiveness, it is increasingly powerful tool for improving the delivery of
private and public services in the oils and gas industry as well as enhancing
organizations global reach and opportunities (Martinez and Williams, 2010).
Similarly, to strategic planning the information technology plan will help the
organization to apply IT creatively; rationalizing its investment; controlling
the expenditures; protecting existing IT investments; resolve conflicting
demands for limited IT resources; obtain joint IT management /user commitment;
and avoid ad-hoc ICT projects as each of Wild and MnCube (1996), Thompson and
Teo (2004), Brady, Fellenz and others (2008), and Martinez and Williams (2010)
reported.
Theoretical Framework:
The
concept of the strategic alignment has been introduced by Henderson and
Venkatraman (1993, p.474) as: "the state that alignment is the degree
of fit and integration among business strategy, IT strategy, business
infrastructure, and IT infrastructure". Other researchers defined the
alignment by sharing and supporting the business strategy together with the IT
strategy and how business manages the IT (Reich and Benbasat, 1996; McKeen and
Smith, 2003).
Several researchers (Baets, 1992; Henderson
and Venkatraman, 1993; Johnston and Yetton, 1996; MacDonald, 1991) have
conducted studies on the strategic alignment and excellent models and
frameworks were developed. However, most studies were based on the Strategic
Alignment Model proposed by Henderson and Venkatraman’s (1993; 1999). Also many
researchers and organizations have used it to assess the level of alignment in
a firm.
This unified framework is the first
comprehensive attempt to enhance the original model unrevealing the fact that
technology evolves and becomes more integrated with business strategies.Although Strategic alignment is
wide spread and researchers agreed on it as a concept; there were inconsistency
of the research findings, particularly regarding the assessment and its impact
on organizational performance an issue that will be addressed in later in this
thesis.
After defining the strategic
alignment, the researcher presents the selected model that will be the basis of
this research within the following subsection.Another
study by Yayla and Hu (2009)proposed and empirically validated a comprehensive
strategic alignment model identifying five antecedents of alignment;
centralization, formalization, shared domain knowledge, successful IT history
and relationship management mediated by two drivers of alignment, the level of
connection between IT and business planning and the level of communication
between IT and business managers. Findings of this study showed significant
effects on alignment, confirming the effects of all antecedents except
centralization.
The strategic alignment is one of the main concerns that the business executives and top managements, as organizations make every effort to link business and information technology with regard to the dynamic nature of the business environment and rapid developments of the information technologies (Papp, 1995; Luftman, 1996). It was ranked as one of the top 10 concerns for many years in a row, and the first top concern in 2011 according to an annual survey of organizations based in the U.S. (Luftman and Ben-Zvi, 2011).
If the Strategic alignment is
important, measuring this alignment would be of equal importance. This arising
concern on the strategic alignment between business and information technology
in terms of application and sustaining the harmony of the relationship between
business and information technology is complex. It is also difficult to assess
the maturity of this alignment, and measure its impact on organizations (Papp
&Luftman 1995). Luftman
(2003) have introduced and approach to measure the level of business and IT
alignment, this approach is now one of the most cited approaches (Belfo, 2012).
Other researchers have introduced alignment assessment instrument such as Chan,
Huff, Barclay and Copeland (1997), Reich &Benbasat (2000), Sabherwal&
Chan (2001). The literature shows that the majority of published researches
have not acceptable validated tools (Boudreau et al., 2001) and alignment
assessment tools are not an exception (Sledgianowski et al., 2006). However,
Luftman's assessment tool (figure 2-3), that involves five levels of maturity
covering the six dimensions of alignment is one of the most promising
instruments and has been showing acceptable validity for some components, it
deserves further attention and use in future research for the remaining mandatory
validity components (Straub et al., 2004).
Should
know what and how customers think, and become entrepreneurial, learning
orientated, focused on core-skills and willing to use new knowledge. Strategy
is about continuously creating and delivering value while serving customer’s
needs (Ohmae, 1988). Based on this concept public organizations are to be
operated and they are nothing but customers/clients oriented organizations consequently,
the researcher is testing the proposed model in this thesis according to the
service quality perceived by the customers of the public organizations as
discussed in the following chapters.
The Methodology:
Based on the research problem and objectives a quantitative survey
can be used to measure the characteristics of elements or sample members.
However, due to the gaps in the literature, the alignment maturity of each
dimension in the context of public organizations need to be investigated and
explored and the lack of the qualitative studies lead the researcher to conduct
it along with the quantitative study.
The researcher has adopted a mixed methods (Creswell, 2003) approach includes a
qualitative and a quantitative study. Based on the hypothesized model, a
qualitative approach using semi-structured interviews is conducted to measure
the development of the constructs. Then a quantitative study is employed to
provide the empirical validation of proposed research model.
Qualitative Approach
Observation data collection
The interviews began with the background of the researcher,
issues of confidentiality and the aim and objectives of the research. This study was
conducted in five out of 59 organizations, and the total of number of
interviews is 65.
The interviews were all conducted in meeting rooms lasted between
45-60 minutes. Based on Tom Wengraf's protocol the researcher has built the
interview agenda .A meeting minutes and careful notes were made during the
interviews and summarized.
Research Design
Data for this study was
collected through two surveys, the first was of a 59 public organizations in Bahrain, and the second was of the
clients of public organization (Oil and Industry Sector) who are randomly
selected. Sampling was done at the strategic level to address the level of
maturity of the alignment of business and information technology strategies.
The sampling frame consisted of public organizations of all industries and
professionalism, as the effect of the level of alignment is not expected to be
different based on the type of industry.
The sample of the first survey was drawn from the 2014 ranking
list published by the Excellence centre; the respondents of second survey were
randomly selected.
The survey, which was addressing various aspects of
strategic planning, was sent to the organizations. Preliminary tests were done by 8 experts from the academic field and in
the fields of public management and some vice presidents of oil and gas
industry sectors, all of whom indicated the validity of the instrument and they
are involved in strategic planning at the business level. The targeted
respondent of the first survey was one level and two levels below the head of
the firm in most of the cases they were
IT director and planning director making
177 as total number of
respondents .
Validity, Reliability, and Ethical Issues
There are two forms of survey (Phil, 2002), the analytical survey
and the descriptive survey. The analytical survey is used to test a theory, but
the descriptive survey is used to identify the characteristics of the specified
population. It is very important to make sure that the sample selected is
representing the population. The survey type used in this research is the
analytical survey.
In order to measure each constraint the existing multiple item
scales were used. The content validity
is carefully addressed to define each construct, using existing scales with
strong measurement properties, and discussing each scale with public
organization top managers during the qualitative study of this research. The
following sections describe the source of each scale.
The scale to measure the level of alignment is used previously in
research by Silvius (2007), It captures participation with respect to private organization
and universities.
The scale to measure the performance was used from previous
research on the service quality of the public organizations where it
demonstrated high internal consistency and reliability (Ilhaamie, 2010).
Accessibility Issue:
The researcher has its difficulty to access information since the
contents has its complex structure. Since there are scarcity of materials both
online and university libraries in Bahrain, the researcher has opted to
interview those who are knowledgeable about the subject from the oil industry
like BAPCO and Saudi Aramco thus travelling to these companies are very
necessary.
Another issue is that information generated from the university
pertaining to the research structure and guidelines needs clarifications’. Lack
of information accessibility causes researcher to be “out of context”. I
suggest that there will be an online conversation with the research adviser for
research clarifications purposes and other issues that will guide them for a
better understanding about the subject. Furthermore, the creation of schedule
time for every student needing help during the research process will be highly
appreciated.
Ethical Issue:
Within the context of ethical issue it is almost of foremost
important that plagiarism must be evaded that create an unethical issue to the
researcher. Although there are issues like, quoting the author’s viewpoint in
order not to obstruct the theme and totality of the content of the research,
however as much as possible avoidance is necessary.
Data Analysis Issue:
The most difficult part of the research structure is the data
analysis, since we need an expert statistician to collate and resolve the
issue. After the collection of data, we have to prove the content of our
research through empirical method by means of statistical orientation, thus
this clarifies the issue pertaining to the statement of problem and the
hypotheses that engulf within the issue. The activity needs a lot of time from
tallying to analyzing data gathered.
Research Limitation:
The gathering of information about the subject is of a difficult
task for me. Since there are few published journals about the topic, I need to
travel from the different Oil and Gas Industry like BAPCO, Saudi ARAMCO and
other companies related to the oil and gas sector to gather more information
about the research. Another limitation is the time spent to gather data to
these companies. Since February and thereafter, the researcher respondents are always
holding several meetings due to oil slump that bereft the GCC
region which causes the delay in gathering data.
Also, there is a little information about the research structure and delayed communication about the inquiries coming from the university which is hinders my research capability.
Description of the Studies
|
Date Started
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Date Ends
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Remarks
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1.
Introduction and Background
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January 15, 2015
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February 2, 2015
|
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2. Theoretical Framework
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February 3, 2015
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February 15, 2015
|
|
3. Conceptual Framework
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February 16, 2015
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February 30, 2915
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4. Methodology
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March 1, 2015
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March 15, 2015
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5. Collection of Data
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March 16, 2015
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April 15, 2015
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There was a difficulty in gathering information due to some problems
that bereft the Oil Industry worldwide.
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6. Empirical Computation
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April 16, 2015
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April 30, 2015
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There are few statisticians in Bahrain that will help me in my
computation, but I can manage.
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7.
Conclusion and Recommendation
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May 1, 2015
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May, 2, 2015
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