Understanding IT Alignment Paradox: A Three-Way Interaction of Intellectual Alignment, Social Alignment, and Environmental Dynamism

Abstract

IT alignment is generally considered to be an enabler of firm performance. However, the previous literature has found that IT alignment has no or even a negative effect on firm performance, suggesting an alignment paradox. This study aims to address this paradox by focusing on the examination of how agility is enhanced or reduced. We consider the boundary conditions of environmental dynamism under which the effect of IT alignment varies. We then conduct a paired-matched survey of business and IT executives in 148 organizations to empirically examine the proposed research model. Our findings suggest that environmental dynamism has a negative moderating effect on the relationship between intellectual alignment and organizational agility, but a positive moderating effect on the relationship between social alignment and organizational agility. Furthermore, we find that in dynamic environments, intellectual alignment increases organizational agility only when it is complemented by social alignment.