Aligning business and IT strategies in multi-business organizations

The alignment of business and information technology (IT) strategies is an important and enduring theoretical challenge for the information systems discipline, remaining a top issue in practice over the past 20 years. Multi-business organizations (MBOs) present a particular alignment challenge because business strategies are developed at the corporate level, within individual strategic business units and across the corporate investment cycle. In contrast, the extant literature implicitly assumes that IT strategy is aligned with a single business strategy at a single point in time. This paper draws on resource-based theory and path dependence to model functional, structural, and temporal IT strategic alignment in MBOs. Drawing on Makadok's theory of profit, we show how each form of alignment creates value through the three strategic drivers of competence, governance, and flexibility, respectively. We illustrate the model with examples from a case study on the Commonwealth Bank of Australia. We also explore the model's implications for existing IT alignment models, providing alternative theoretical explanations for how IT alignment creates value.

What is the value of corporate sponsorship in sports?

This paper investigates the stock market reaction to investor mood swings resulting from the Indian Premier League (IPL) cricket matches. We find that stocks listed on the Bombay Stock Exchange (BSE) that sponsor the IPL cricket are unaffected by the cricket matches. This finding is robust along two lines: (a) the effect is insignificant both statistically and economically which we demonstrate using a simple trading strategy; and (b) results hold across a wide range of portfolios. Our results, both statistical and trading strategy-based, suggest that the portfolios of companies that sponsor cricket in India are efficient. Our findings stand in sharp contrast to the evidence obtained by the broader sports literature suggesting that sports actually impact stock returns, driven principally by psychological factors.

Value chain supply procurement strategies in international construction: cases of foreign constructors in China

Purpose – Firms compete using a variety of strategies. Typically they aim to provide something different, to be better, or simply cheaper. In the construction industry, the performance characteristics, quality and cost of the final delivered project will be the outcome of the interplay of capabilities of all the firms involved in the project. Consequently, in order to improve competitiveness, firms must pay attention to not only their own competitive advantage but to those of the firms, both up-stream and down-stream, on whom they depend in delivering their projects. For foreign constructors in China, those competitive considerations will be informed by circumstances different from home. How then do foreign constructors adapt themselves to the problem of sourcing competitively when located within a China-based supply chain? The paper aims to discuss these issues.

Design/methodology/approach – In this study 60 foreign enterprises operating within the Chinese construction sector were investigated by using a comparative case study approach.

Findings – Four generic procurement strategies were identified. First, firms adapt themselves in the search for optimal supply sources by replicating home-based suppliers, controlling local suppliers, or by remaining agile and non-aligned. Second, firms develop niche supply monopolies through market dominance, uniquely differentiated offerings, or by integration with down-stream providers. Third, firms find opportunities to bring in off-shore technology intensive procurements, where that technology is either protected, improved upon, or sold. Finally, firms also seek to transit to China as a procurement base in order to reduce local supply cost, service world-wide operations, or as part of a total strategy of China relocation.

Originality/value – The identification of this rich range of procurement approaches will be of interest to internationalization strategists, as well as to industry practitioners looking to find appropriate business models for off-shore operations.

Linking and leveraging resources for innovation and growth through collaborative value creation: a study of Indian OSPs

How do knowledge-intensive and technology-based service providers from emerging economies sustain their innovation to grow rapidly and become dominant global players in their fields? We explain this recent phenomenon for a sample of offshore service providers (OSPs) from India by drawing from the collaborative value creation theoretical perspective and Mathews’ (Asia Pacific Journal of Management, 23(1):5–27, 2006a) resource “linking and leveraging” concepts. This paper shows that OSPs from India develop high quality relationships to enable them access and exploit network resources in delivering customized and innovative services to clients globally. The findings of this research provide further evidence that Mathews’ (Asia Pacific Journal of Management, 23(1):5–27, 2006a) internationalization framework of emerging economy multinational enterprises can be generalized to service providers.