BUSINESS AND INFORMATION SYSTEM STRATEGIC ALIGNMENT: DETERMINANTS AND IMPACT ON RURAL BANK ORGANIZATIONAL PERFORMANCE

Abstract

Impact of information systems on firm performance is related with its alignment with business strategy. This study aims to analyze the influence ofthe degree shared common knowledge, business environment scanning intensity, planning sophistication, and information systems implementation effectiveness onthe degree of aligment between business strategy orientation and informationsystems strategyorientation (i.e., strategic aligment); additionaly it also aims to analyze the effect of strategic aligment on rural bank organizational performance. Not less than 78 rural bank managers are involved in this study. Path analysis was performed to test the proposed hypotheses. It is recognized that strategic aligment provides signifcant contribution to rural bank organizational performance. Meanwhile, the degree of strategic alignment is influenced by the intensity of business environment scanning, the degree of shared common knowledge, planning sophistication, and the information systems implementation effectiveness.
Keywords: Rural banks, organizational performance, strategic alignment, business strategy orientation, info. sys. strategy orientation.
JEL Classification: G21, C30, M21.

Keywords

• Rural banks,organizational performance,strategic alignment,business strategy orientation,info. sys. strategy orientation

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