Strategic Alignment Model

What is Henderson and Venkatraman's Strategic Alignment Model (SAM)?

The strategic alignment model (SAM) proposed by Henderson and Venkatraman is one of the most cited strategic alignment models (Chan and Reich, 2007a). SAM is composed of two main dimensions: strategic fit and functional integration. Strategic fit refers to the concordance between internal and external domains (see figure below). Functional integration refers to two types of integration between business and IT domains. The first type is termed strategic integration and reflects the link between business strategy and IT Strategy. The second type is termed operational integration and deals with the link between organizational infrastructure and IT Infrastructure and process (Henderson and Venkatraman 1993). SAM is a conceptual model that has been used to understand strategic alignment from the perspective of four components, i.e., Business Strategy, IT Strategy, Organizational Infrastructure, and IT Infrastructure, and their interdependencies.[1]

Strategic Alignment Model
source: Toms IT Pro

In the figure above, the cross-domain alignment between business strategy and I/S infrastructure and processes depicts a classic linkage view prevalent today. The other type of alignment between IT strategy and organizational infrastructure and processes reflects a view of automation of the work environment. Specifically, creating a linkage between business strategy and I/S infrastructures and processes requires specifying work processes, roles, and authority structures to relate to how the I/S products and services will impact the business strategy. The business strategy must be decomposed into work processes to define the requirements of the I/S infrastructure and processes. The automation type of cross-domain alignment represents the potential for emerging technology to change or alter organizational processes. This view emphasizes the potential value of IT and how the I/S infrastructure and processes provide a service organization to support this potential. [2]

The concept of the model, pictured in the Figure below, is based on two building blocks: “strategic fit” and “functional integration.” Strategic fit recognizes that the IT strategy should be articulated in terms of an external domain (how the firm is positioned in the IT marketplace) and an internal domain (how the IT infrastructure should be configured and managed). Strategic fit is, of course, equally relevant in the business domain. Two types of functional integration exist i)strategic and ii)operational integration. Strategic integration is the link between business strategy and IT strategy reflecting the external components, which are important for many companies as IT emerged as a source of strategic advantage. Operational integration covers the internal domain and deals with the link between organizational infrastructure and processes and IT infrastructure and processes. Henderson and Venkatraman (1993) argue that the external and the internal domain are equally important but that managers traditionally think of IT strategy in terms of the internal domain since, historically, IT was viewed as a support function that was less essential to the business.

Concept of SAM
source: Adapted from Henderson & Venkatraman, 1993

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