Technology alignment and business strategy: A performance measurement and Dynamic Capability perspective

Rapid changes in market structures and technology lead to misalignment between strategy and operations. Whist this phenomenon is most prevalent in technology based manufacturing industries, uUtility organisations (e.g. electricity and telecoms) are provide a useful context to explore the Performance measurement (PM) and technology alignment challenges from a Dynamic Capabilities Theory perspective where there is a progressive shift towards deregulated markets. The aim of this paper is twofold: First, to explore the role of Dynamic Capabilities Theory and PM approaches in improving the alignment between business strategy and technology strategy (Level 1 alignment); second, to explore the role of Dynamic Capabilities Theory and PM approaches in aligning technology strategy with operational technology routines and practices (Level 2 alignment). In the absence of overarching theory an inductive theory-building approach which draws upon Dynamic Capabilities conceptstheory (which have developed from a nexus of Resource Based View and organisational learning theories)is used. Four longitudinal case studies are used leading to the development of a conceptual framework and propositions for multilevel technology alignment. Data from 38 interviews and eight separate focus groups, documentation, and participant observations (over a three-year period) are used. The theory-building process shows the need to identify and develop PM-based technology alignment Ddynamic Ccapabilities (PM-DCs) which help in improving and maintaining alignment between business strategy and technology strategy (Level 1 alignment) and between technology strategy and technology practices (Level 2 alignment). This approach requires critically reflective action-learning approaches to identify and nurture these PM-DCs.