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INTEGRATING IS AND THE ORGANIZATION:
A FRAMEWORK OF ORGANIZATIONAL FIT

Michael J Earl
London Business School

CRIM WP95/4

Copyright © Centre for Research in Information Management, London Business School,

1997. These papers are part of a series of early publications by faculty at London Business
School. They are accessible in electronic format free of charge to Sponsor companies who are
part of the CRIM research programme and the I:Lab Founding Sponsor programme.

These papers should not be reproduced in any format for any purpose save non-profit
educational purpose without permission of the authors.
 INTEGRATING IS AND THE ORGANIZATION:
A FRAMEWORK OF ORGANIZATIONAL FIT

Abstract

Formulating IT strategy remains a key issue for large companies. Terminology and
methods vary across companies and there remain several "theories" about the strategic
management of IT. Nevertheless, new strategic issues continue to be discovered. From
time to time, managements find that they need to stand back and ask some basic
questions such as what does an information strategy look like, what does it comprise and
how does it relate to business strategy. We have found that a framework for analysis,
built on work first started over ten years ago, is useful in helping companies get back on
track. The Organizational Fit Framework (OFF) is not unlike the Strategic Alignment
Model of Henderson and Venkatraman. It is based, however, on a simple and effective
view of how executives seem able to conceptualise strategic decision-making about IT.
OFF comprises four strategy domains: Organizational Strategy; Information Systems
Strategy; Information Technology Strategy and Information Management Strategy. It
assumes that there is both an interdependcncy and linkage between each domain.

Keywords: IT Strategy; Strategic Management; Strategic Alignment;

IS Management.
INTEGRATING IS AND THE ORGANIZATION:
A FRAMEWORK OF ORGANIZATIONAL FIT

by Michael J. Earl, Centre for Research in Information Management

London Business School.

STRATEGIC MANAGEMENT OF IT
Much of this volume has been concerned with the integration of IS activities with the organization.
Underpinning these concerns, perhaps, is the notion that information resources should be efficiently
and effectively managed. This is one available definition of information management. When
surveys are done of the most important issues facing the managers of the IS function, we find they
rarely change. Different language may be used, contemporary rhetoric introduced and priorities
alter, but they are usually concerned with how to get strategic advantage from IT and how to align
IS strategy with business strategy, how to organize the IS function and how to manage the ever-
changing boundaries between users and specialists, and how to plan and build IT infrastructures
and cope with the latest technologies (see for example Brancheau and Wetherbe, 1987, and
Niedermann, et al., 1991). These are as much general management issues as specialist, functional
issues since they potentially affect organizational effectiveness. This issue-set therefore is described
increasingly as the strategic management of IT.

In the early 1980s, one indicator of the 'elevation' of such issues in organizations was the
formulation of so-called IT strategies. As a result of action research in a number of companies, I
called for a distinction to be made between IT strategy and IS strategy (Earl, 1987). This was,
quite simply, because I found that most of the IT strategies of the time were strong on technology
issues and technical terminology and weak on identifying application needs and business thinking. I
suggested two levels or domains of information strategy: IS strategy, concerned with the firm's
required information systems or applications set, or the 'what' question, and the IT strategy
concerned with the technology and infrastructure-building set, or the 'how' question.

This distinction today may seem obvious and somewhat immature, but then it was found useful by
many general managers and IS executives. A number of implications followed from the distinction.
The IS strategy should be demand-led and business driven, very much influenced and owned by
general managers and formulated wherever an identifiable business or competitive strategy was
being pursued. We would expect there to be an IS strategy for every division or SBU - and also
corporately. These strategies would change as the business environment changed.
CRIM WP95/4 -- Integrating IS and the Organization 4

The IT strategy, conversely, was likely to be supply oriented and functionally driven, very much
the province of the IT professionals and often formulated primarily at corporate or group level
where issues of efficiency, good practice, business-unit integration, economies of scale and
corporate control were emphasised. There may be areas of local discretion, but some architectural
coherence was sought. Indeed, later (Earl, 1989), I suggested that the terms 'IT strategy' and
'architecture' were largely synonymous. IT strategy, for reasons of integration and surety of
supply, might have to be more stable than IS strategy, it was argued.

The observation that there were both - in the classical language of business strategy - strategic
business unit (or local) and corporate (or global) questions in the strategic management of IT very
soon led me to suggest graphically (and rather glibly) that IS strategy and IT strategy should be
linked with corporate strategy and business (SBU) strategy and a diagram of these four domains
was put on the dustcover of a book I edited in 1988. The message was not developed, however,
other than to stress the need for linkage with the wider set of business strategies.

One year later, Strategy-making in IT was revisited (Earl, 1989) and a third level or domain from
the information resource perspective added. The notion of an Information Management (or IM)
strategy was introduced, being concerned with putting the management into IT or with which way
was IT to be managed. This was organization based, relationships-oriented and management
focused. It included questions such as the mission and organization of the IS function, control and
accounting for IT and design of the management processes required across all the IT activities of
an organization. As opposed to 'the what' and 'the how' questions, IM strategy was seen to be
concerned largely with the 'who' in that it spells out responsibilities, relationships and roles and
even in its more control-oriented components is concerned with guiding personal or functional
actions and assessing subsequent performance1

The three domain (or box) diagram no longer included linkages to the wider business strategies,
although these were written about in the 1989 book. Over the subsequent years, the 'model' was
developed through teaching and advisory work to become the 'information strategy triangle' in
Figure 1. This was much more explicit about the responsibilities for each domain, subtly, but
importantly, suggesting a different balance between the IS function and general management in
each.

1
Originally, (1989) I used a shorthand of wherefores, but this is not so appropriate, and I am grateful to David
Feeny for alerting me to ‘the who’.
CRIM WP95/4 -- Integrating IS and the Organization 5

Figure 1: The Information Strategy Triangle

IS Strategy
•Business Unit + Corporate

•Demand Oriented

•Business Focused

•Business With IT
What?
IT Strategy IM Strategy
• Scope and Architecture • Administration and
Organisation
•Supply Oriented
•Roles and Relationships
•Technology Focused
•Management Focused
•IT with Business
•Business and IT
How?
Who?

IS strategy and Strategic Information Systems Planning remain a challenging issue for IS managers
(Niederman, et.al 1991) and a rich area of research for academics (Boynton and Zmud, 1987,
Lederer and Sethi, 1988, Earl, 1993). IT strategy and the associated architecture or infrastructure
questions currently seem to be even more pressing for IS Managers (Niederman et.al, 1991) but
under-researched (Boynton and Zmud, 1987, Earl, 1987). IM strategy questions never seem to die,
partly perhaps because both technology and organization are constantly changing. Recent IM
research would include studies of outsourcing (Lacity and Hirschheim 1993), the role of the CIO
(Earl and Feeny, 1994), and work on the changing shape of the IS function (Earl, 1995).

I would argue now, however, that IM Strategy is the keystone of Information Strategy. Not only
are IM issues recurring and frequently poorly addressed, but it is through the processes of
Information Management (as delineated by IM strategy) that questions of both IS strategy and IT
strategy are resolved. It is the organizational issues in the strategic management of IT that matter
most. To use the parallel of strategic management at large, whilst we can see from a rational
analytic view, that structure may need to follow strategy as shown by Chandler (1962) and as
underpins many models of strategic fit (Venkatraman and Camillus, 1984), a process view as
developed by say Mintzberg (1987) or Quinn (1977) would suggest that strategy may follow
structure. It is through organizations that strategies are made and thus naive, mechanistic and
simply aligned organization designs may not provide the adaptation, creativity and
CRIM WP95/4 -- Integrating IS and the Organization 6

entrepreneurship that strategy-making requires. Work on global IS strategies (Earl and Feeny),
1995 pinpointed just how important IM strategy is in determining global IS needs. And the
research on IS strategy-making by Earl (1993) advocated an organizational approach rather than
more simple business led, method-driven, administrative or technological approaches.

However more recent teaching experience and advisory work do suggest that sometimes it is
helpful to add another 'box' to the 'Information Strategy Triangle'. This I will call the
'Organization's Strategy' which is very similar to King's (1978) conceptualisation of the
'organizational strategy set' which was the foundation of his model for strategic planning for MIS.
It comprises both the components of business strategy and the attributes or characteristics of the
host organization. This domain can be thought of as the 'wherefores' in that it has considerable
influence on the three information domains; the contents of the organizational strategy set are often
'on account of which’2 choices in IS, IT and IM strategies are made. Perhaps Gilbert's 'why and
wherefore' substantiates the use of this shorthand3

However we also have to note that IT has the potential to offer new or alternative strategic choices
in this domain and so whilst the organization's strategy may influence strategic decision-making in
the information domains in the long run, there is a possible feedback or iterative loop in the reverse
direction. Finally, to defend the label of this 'box' when we talk and write of 'strategic choice,' we
apply the term to both business direction-setting and organizational design. The 'organization's
strategy' comprises these two aspects because they are both critical factors in information strategy,
as we shall see.

Bringing the four domains together, provides an 'organizational fit framework' (Fig 2) which is
explained and developed in the rest of this paper. It provides, I hope, a practical and integrating
denouement to this volume. Its purpose is to provide a guiding framework for the strategic
management of IT or, more prosaically, for integrating information resources with the
organization. Below is a set of typical questions that have to be addressed in information strategy.
The 'organizational fit framework' does not answer them. However, it formalises them into strategy
sets and thereby indicates what management processes are required to ensure the questions are
raised and answered:
 What IT applications should we develop to yield competitive advantage?

 What technological opportunities should we be considering?

2
An Oxford English Dictionary explanation of ‘wherefore’
3
“Never mind the why and wherefore” in W S Gilbert and Sir Arthur Sullivan’ ‘HMS Pinafore’
CRIM WP95/4 -- Integrating IS and the Organization 7

 Which IT platforms should we be building and what IT policies do we need?

 Which IT capabilities should we be nurturing and which can we acquire from the
marketplace?

 How should IS activities be organized and what is the role of the IS function?

 What is management's role in IS/IT matters and what IT capabilities are required of today's
managers?

Figure 2: The Organizational Fit Framework

Organizational Strategy IS Strategy

wherefores Business Organization what Alignment Opportunity

Intent Context SBU Group

IM Strategy IT Strategy

Roles Relationships Scope Architecture

who how

Formal Informal Capability Powers

The framework proposes not only that a complete information strategy has to address the four
domains in Fig 2, but also that they are interrelated. The notion of 'fit' proposes a consistent set of
relationships, which are continually changing and thus should be mutually adapting.

STRATEGIC ALIGNMENT
The notion of fit is just one of the similarities between this Organizational Fit Framework (OFF)
and the Strategic Alignment Model (SAM) of Henderson and Venkatraman (1989, 1993). SAM is
based on the need for strategic choices in the external domain (environment) and internal domain
(organization) to be consistent and on the need for integration between the IS function and the
organization. These two dimensions of strategic fit and functional integration give SAM a theory
base and an elegance which is appealing. Indeed from its origins in the Management in the Nineties
Program at MIT, it has been developed by others (MacDonald, 1991, Luffman, et al 1993) and
assessed in the field at a broad level by Broadbent and Weill (1993) and in a much narrower,
tighter sense by Chann and Huff (1993). The OFF, conversely, is more inductive, developed from
CRIM WP95/4 -- Integrating IS and the Organization 8

action research and teaching, and perhaps is issue-driven rather than justified by strategic theories
of the firm. On the other hand, as we shall see, the OFF does build on much evidence from IS
research. The two models are also similar graphically or in structure. The SAM also has four
domains: business strategy, IT strategy, IS infrastructure and processes, and organizational
infrastructure and processes although these are not well articulated. It is also concerned with the
relationships, or linkages, between the domains and the fit, or integration, between IS/IT and the
business. Again, these linkages could be better developed. The purpose of the SAM, however, is
also to guide the strategic management of IT and its spirit is that alignment is a dynamic matter.

Henderson and Venkatraman (1993) have articulated the Strategic Alignment Model in terms of the
requisite strategy perspectives of top management and IS management respectively and of the
performance criteria that might be applied to IS. This helps us understand the management and
organizational processes required of the SAM, but there is likely to be much more required in
understanding the process of alignment. This is a tall order and involves research into processes
and method. These may be developed in the future. Also required would be an examination of when
and whether misalignment might be valid, not least to trigger the search for realignment in the
dynamic worlds of organizations and IT. Even more controversially, if organizations are in a
sense, themselves information systems, and if information flows have to cross internal and external
organizational boundaries and information resources be shared by all, should some elements of
information strategy be above or somewhat removed from a current conceptualisation of alignment
between the business and its organization? After all, this line of argument is tentatively suggested
by the evidence of global information management presented by Earl and Feeny (1996).

These same critical questions can be posed of the Organizational Fit Framework. The SAM and
OFF models are compared again later.
CRIM WP95/4 -- Integrating IS and the Organization 9

ORGANIZATIONAL FIT
The OFF (Fig 2), then, comprises Earl's three domains or sets of Information Strategy, their
interrelationships and their integration with the organization's strategy. It provides a formal way of
identifying and conceptualizing the questions of information strategy. It also helps general
management see the need both for integrating information management with the organization's
management processes at large and for participating in this integration. At its most basic, it
provides a high level checklist of factors to consider in integrating information strategy with the
business.

Each domain, or box, comprises two 'components' and two 'imperatives'. These, it is claimed, are
necessary to achieve organizational fit. They may not be sufficient; but they have been found to
make a substantial contribution. 'Components' are subsets or different horizons of each domain or
set. 'Imperatives' are factors or considerations which must be taken into account and not forgotten.
The lines of connection between each domain in Fig 2 represent the interrelationships. They are
two-way and will be described in terms of management processes that are likely to be required to
ensure organizational fit. The detail of the domains has been refined as the OFF has evolved. The
character of the processes required to bring about the interrelationships is more conjectural, but is
derived from results of diverse research projects.

Organization's Strategy
The Organization's strategy domain comprises the components of business strategy and
organizational choices. These need to be clarified for all aspects of information strategy-making. It
is not unusual for the business strategy especially to be vague, rather high level and not necessarily
agreed (Bowman et al,1983, Lederer and Mendelow, 1986). This is why some organizations find
that they have to revisit business strategy before embarking on information strategy. Clarification is
required (Earl, 1989).

Business Strategy, as becomes evident in IS strategy, is formulated at both the corporate level and
the SBU level. The former is concerned with mission, in the sense of what businesses we are in and
not in, and thus with the shape of the business portfolio, with shareholder value, (or not for profit
analogues of added value) and desired or distinctive resources and capabilities. These are the
essentials of corporate strategy, defined and described by Andrews (1980), Ansoff (1965) and
others. SBU strategy is more concerned with competitive positioning, product-market choices, and
managing the value chain as classically explained and analyzed by Porter (1980).
CRIM WP95/4 -- Integrating IS and the Organization 10

Organizational choices comprise the chosen organizational structure or design, the management
control system and the formal policies and procedures by which the enterprise is supposed to be
managed. Although these may be determined by the environment in which the enterprise is located
(Lawrence and Lorsch, 1967), there is a degree of strategic choice (Child, 1975) often made by the
CEO and mediated by top management.

One way of clarifying business strategies and organizational choices is by seeking the official,
creative view of 'strategic intent' (Hamel and Prahalad, 1988), a construct which captures both
what strategic advantage is being sought and how. Intent forces a crystallisation of purpose, an
operational orientation, a focus or criterion in making choices and a level of directional stability,
since intent is somewhat timeless. In business strategy it is a statement of 'what we are about' and
can exist at corporate and local levels. In organizational choice, it can be seen as the formal
definitions, configurations and instruments of structure and control. Intent, then, is one imperative.

The second, complementary imperative is context. Formulation and implementation of business

strategy take place in a context which can change. It can be important in making choices in both IS
and IT strategy to be sensitive to current context. Earl's (1993) study of CIO survival highlights
this point. There may be occasions when changes of emphasis in IS direction, IT infrastructure-
building or IM policies are required. Obvious examples are the need to economise when the firm's
financial performance is under threat or the need for rapid systems delivery in periods of turbulent
change.

Organizational context is just as important. It can be thought of as the ethos of the organization,
the management style or the culture. There are all 'soft' words and concepts, but can be thought of
as 'how things are done round here', 'what values are sacrosanct,' 'which flavours are changing' and
the like. Context includes the informal side of organizational choice. It especially influences IM
strategy in terms of how to put management into IT, for example selecting an appropriate approach
to strategic information systems planning. It may influence the tolerance to IT strategy and
acceptance of its requisite policies and standards. It may condition the notion of what is a practical
IS strategy, especially in terms of ambition and granularity. Important aspects of context include
the informal networks and shared values formed by management development programmes, the
preferences and habits in decision-making behaviour, the traditional attitudes to risk and the
emerging beliefs and rhetoric as times change.
CRIM WP95/4 -- Integrating IS and the Organization 11

These components and imperatives of the organizations' strategy, then, need to be articulated and
heeded in information strategy-making. Because they may be unclear, disputed or not formalised,
they must first be clarified. Thus the character of the process by which the organization's strategy
influences the information strategy domains (Fig 3) is clarification. There are several ways of
achieving this and they may be organization-specific. But clarification is essential.

Figure 3: The Clarification Process

IS STRATEGY
ORGANIZATION’S
STRATEGY
n
o
tI
a
c
fI
rI
la
C

IT STRATEGY

IM STRATEGY

IS Strategy
The IS strategy domain comprises the components of alignment and opportunity. It is well
established (Earl, 1988, Henderson and Venkatraman, 1989) that IS strategic planning is
concerned with identifying the applications required to support business strategy, (the alignment
question) and with searching for more innovative uses of new technologies which can be exploited
to enable business to be done differently or new businesses to be developed (the opportunity
question). The alignment and opportunity questions form the agenda of IS strategy.

The alignment question is dependent upon the clarification process described above and several
methods and approaches are available and used for this in IS Strategy planning (Earl, 1993). They
range from procedural forms of planning, to techniques such as critical success factors (Rockart,
1979) or Business Systems Planing (IBM, 1981), or more processual approaches such as Earl's
(1996) Organizational Approach. Earl's discovery that identifying and pursuing a few themes in IS
strategy seems to lead to success argues for the process of clarification and the search for intent as
inputs from the organizational strategy set. These may help also in finding IS opportunities.
CRIM WP95/4 -- Integrating IS and the Organization 12

The opportunity question, however, seems to be tackled as much through management processes
which resemble those identified as necessary for product innovation (Earl, 1988). In addition, the
opportunity search may require a more aggressive consideration of new, emergent and future
technologies. Henderson and Venkatraman (1989) in their Strategic Alignment Model argue that
firms should define their technological scope, or have a sense of which technologies in the
marketplace could become the enablers of new strategic thrusts. This issue of technology tracking
and visionary needs further research.

These two questions or components of IS Strategy have to be addressed at at least two levels of the
organization: the SBU and the Group levels. These are the imperatives. IS strategy making at the
SBU level has been emphasised for some years. This was probably due to the influence of Porter's
(1980) conceptualisation of competitive strategy. This SBU orientation had the beneficial effect of
suggesting that a) product-market strategies were not complete without consideration of IS needs
and opportunities (or threats) b) IS strategies should become the responsibility of SBU's and not an
abstract and remote activity of corporate staff. However, it also may have backgrounded another
need: namely IS strategies at higher levels. In Fig 2, therefore, we argue that IS strategies are
needed at group level too. This can be a collection of SBU's and/or the corporate level, implied in
a number of papers in this volume. It is concerned sometimes with global capabilities, as described
in the study by Earl and Feeny (1995), with new ways of organising, as described by Sampler
(1996) or with the search for synergy and added group value. In the 1990s, corporations are
revisiting this level of IS Strategy.

Thus the character of the process by which the IS strategy influences the other domains is
orientation. IS Strategy itself is about deciding which are the right areas to invest in and about
discovering focus, or the multiyear theme of IT application and business change. From such
orientation, principles of IT architecture can be derived, for example about business growth,
internationalisation, information-sharing and the like. Orientation is the most important goal that
the decisions of IM strategy seek to achieve. It is why we need strong relationships between IS
management and general management. And a firm's orientation influences the mission of the IS
function. Finally, orientation is the thread which links IS strategy back to the organization's
strategy. This linkage is depicted in Figure 4.
CRIM WP95/4 -- Integrating IS and the Organization 13

Figure 4: The Orientation Process

ORGANIZATION’S IS STRATEGY
STRATEGY

O
rI
en
ta
tI
on
IM STRATEGY

IT STRATEGY

IT strategy
The IT strategy domain comprises the components of scope and architecture. Scope is concerned
with which technologies are to be formally included in the information strategy. There are at least
two reasons for this. The first was discussed above; it can be important to agree which
technologies in the marketplace of the future are likely to offer business threats and opportunities.
This set of technologies has been sometimes dubbed 'killer technologies'. These will be scanned,
forecast, evaluated and experimented with.

The second reason is to agree which current technologies are to be included in the IT strategy and
architecture planning. These will be underpinning today's information processing. By implication,
this usually means considering such technologies and their custodians in the IM strategy process.
In the early 1980s, debates were engaged often on whether telecommunications should be included
in the IT domain and sometimes whether manufacturing technologies were in the set. In financial
services, it was easy to see that where telecommunications underpinned distribution channels, they
should be included. In process industries, the debate was often about process control computing.
Today the issue could be about media technologies and information services. For instance at the
London Business School, a decision was taken in 1990 to include both audio visual services and
library information processing in the scope and bring the departments into the IS Division. They
became 'core technologies' alongside computing and telecommunications.
CRIM WP95/4 -- Integrating IS and the Organization 14

The second component of IT strategy is architecture. This is the technology framework which
drives, shapes and controls the IT infrastructure. Architecture is a somewhat nebulous concept in
both theory and practice and is variously defined and conceptualised. Periasami (1994) has
derived some interesting perspectives from empirical work. Architecture can be seen to comprise at
least the elements of computing, communications, data and applications and can be conceived of in
four levels of certainty, namely parameters, schemas, policies and plans (Earl, 1989).

An architecture plan is required to ensure technological integration where it is needed, to guide

technical choices as new technologies and methods became available, to ensure efficient (especially
reliable) and effective delivery of the IS strategy, and to provide a technological model of the
business when technology-dependent business decisions are being made.

The imperatives in IT strategy are capability and powers. Capability is the set of skills, knowledge-
assets and activities needed to be especially competent, if not 'leading-edge', in the core or killer
technologies that make up scope. For example, one might be cautious of outsourcing the planning
and experimentation around these technologies and be concerned to maintain both expertise and
experience. Equally, as Earl (1995) suggests, it is important to decide what capabilities must be
retained in the IS function as computing and other technologies become ever more distributed.

Powers are required to implement and monitor the architecture. The policies (or standards) behind
architecture will often be perceived by users and managers as camouflage in discussions about
information strategy and constraints on free and dynamic use of technology. Because architecture
does sometimes matter, reserved powers may be necessary in order to exercise technology
stewardship and functional leadership. An analogy is limits on foreign exchange exposure set by
corporate treasurers and controllers on commercial managers in divisions. However because
standards battles are divisive and stressful and because it makes sense to encourage
experimentation, innovation and learning, experience suggests that reserved powers should be few
and thus architectures be of minimal design.

IT strategy requires as inputs clarification from the Organization's strategy. For example guidance
on risks, time to market and other parameters mentioned earlier is required. Increasingly,
affordability is a common factor as the economics of information processing is examined by
corporations and the viability of technology-based business processes and products reassessed. The
orientation linkage from IS strategy is another input, suggesting for example the main properties
required of architecture and the areas where new experimentation is required.
CRIM WP95/4 -- Integrating IS and the Organization 15

The output from IT strategy can be thought of as a process of foundation. This is concerned with
the ways in which infrastructure is to be built and with the management of architecture. Questions
of IM strategy will be influenced by the imperatives of scope and powers. For example today not
only does the centralisation versus decentralisation of IS resources have to take note of this issue,
so does the ever-moving boundary between users and specialists. Questions of Organizational
Strategy also may be influenced by IT strategy. Organizations now talk of 'business architecture'.
For example, there are anecdotes of how strategic alliances and mergers have foundered on
incompatible technology. Conversely, business strategy options may be increased by the properties
of the IT infrastructure. For example, one retailer has been able to pursue aggressive product
promotion campaigns because of the software and data capabilities built into its EPOS platform
(Earl and Feeny, 1994). Finally IS Strategy may be constrained by the architecture principles, for
example, robustness and integration are properties often traded off against systems flexibility and
rapid delivery. Conversely, the inherited foundation may contain latent IS opportunities which is
one reason why bottom up evaluation of existing infrastructure is useful in IS strategy formulation
(Earl, 1989). This linkage is depicted in Figure 5.

IM Strategy
The components of the IM Strategy domain are the roles and relationships that need to be defined
in managing IT activities, especially the IS function4.

Roles is concerned with who has what responsibility and authority for information resource
policies and actions both inside and outside the IS function and at different levels of the
organization. Classically, this raises the question of the balances between centralisation and
decentralisation and between users and specialists. These issues never go away for the determining
factors of technology and organizational characteristics change so often.

4
Functional strategies and their missions often adopt the language of 'roles and relationships' used
here. I am conscious that in social psychology role often refers to interactions and relationships.
An alternative description of the components of IM strategy therefore might be responsibilities
and relationships.
CRIM WP95/4 -- Integrating IS and the Organization 16

Figure 5: The Foundation Process

IS STRATEGY

ORGANIZATION’S
STRATEGY
n
o
tI
a
d
n
u
o
F

IM STRATEGY IT STRATEGY

Relationships are equally important. Henderson (1990) has shown how important partnerships are
in integrating the IS function with the organization. Earl (1993) discovered that CIO's should
concentrate on building relationships with peers and supervisors if they are to survive. As
outsourcing grows, firms are defining different sorts of partnership with third parties (Cross,
1995). And the politics of organizations generally indicate that IS managers and systems personnel
should generally "put themselves about".

The imperatives in this domain are attention to both the formal organization (the intent) and the
informal (the context). We have learnt that effectiveness in IS is unlikely if the functional
organization is at odds with the structure and style of the host organization. This is the simple
message of the work Earl et. al. (1995). This was concerned more with the formal organizational
arrangements. However the informal nature of organizations can be just as influential. Too much
attention to the structure of the IS function, the creation of IM committees and the hierarchical
status of the CIO can be counterproductive in organizations where initiatives and decisions are
made by consensus, via networking and lobbying or in critical groups and teams. Some IS
executives have a tendency to demand an organizational context of formal structures, bureaucratic
procedures and neat and tidy processes in their belief in a rational world. The reality of much
organizational behaviour is much more informal - and the world of IS is no different.
CRIM WP95/4 -- Integrating IS and the Organization 17

Earl (1993) observes that CIO's need to be good at politics and have strong social skills, especially
to aid relationship-building. Beath (1996) finds that project champions are often unofficial and
work informally with the CIO. Conversely some roles and behaviours which may have existed only
informally could be improved by some formalization. Edwards (1996) argues this for project
sponsors and sponsorship.

The imperatives of IM strategy, namely roles and relationships, need to fit both the formal and
informal aspects of organizations. Furthermore they will themselves have formal and informal
management processes. The IS Strategy may suggest new roles and relationships and the need for
changes in nuance. The IT strategy will demand formal and official management adjustments from
time to time.

The output linkages from the IM strategy domain can be described as processes of constitution.
Instead of organizing and managing IS, people now talk of 'governance' of the IS function, perhaps
in recognition of the many stakeholders, including external ones. Constitution is offered as a noun
to describe this process. It can influence the setting of the organization's strategy, for example
when tensions or fault lines in design of the host organization become manifest as IM issues. It can
affect the capability and effectiveness of IS strategy-making, for example in encouraging teamwork
as advocated by Earl (1993) and partnership as advocated by Henderson (1990). It can influence
the quality of IT strategic decisions, and the subsequent buy-in to them, by education, development
and propaganda programmes. The notion of constitution indeed reminds us that political initiatives
should be on the IM agenda as much as structural and rational considerations. The process of
constitution is depicted in Figure 6.
CRIM WP95/4 -- Integrating IS and the Organization 18

Figure 6: The Constitution Process

ORGANIZATION’S
STRATEGY

IS STRATEGY

C
o
n
s
tI
tu
tI
o
n
IM STRATEGY IT STRATEGY

OFF IN PERSPECTIVE
The Organization Fit Framework is offered as a model of information strategy, perhaps answering
the questions 'how do I know an information strategy when I see one?' and 'what do we have to do
to develop one?' More precisely the OFF:

 Suggests three domains of information strategy as an output and prescribes the components
and imperatives of each.

 Adds a fourth domain, the organization's strategy, with which information strategy must
connect.

 Indicates how all the domains interrelate and outlines the nature of the linking processes.

 Provides a checklist for developing an information strategy and a framework of analysis to

ensure organizational fit.

The framework is not, however, either necessarily complete or fully validated. It leaves unanswered
some important questions. The first is detail on the mechanics and dynamics of the linking
processes. Researchers continue to work on this question. Second, it is not proven whether 'fit' is
entirely about internal consistency or whether fit may sometimes be offset, because of the special
CRIM WP95/4 -- Integrating IS and the Organization 19

characteristics of information flows and processes in organizations discussed earlier. And, of

course, we have not proved that organizational effectiveness is dependent upon fit. However the
construct has been found useful in analysis of an organization's information strategy, particularly
in determining matters of IM strategy - which are essentially organizational.

These critical questions can also be asked of the Strategic Alignment Model which is similar. The
major differences are first that SAM is more deductive out of strategic management theory. OFF is
more inductive out of information management issues. The driving assumptions of both
frameworks are similar, namely the need for alignment or fit and the search for functional (or IT
activity) integration with the organization. However SAM leans mostly towards strategic
positioning and alignment whereas OFF is founded on organizational capability and congruence.
Finally SAM may be more of a conceptual framework and OFF a managerial checklist.

These differences are nuances. The two frameworks are substantially similar. They are intended to
help with the strategic management of IT. It is recognised that both alignment and fit are dynamic
concepts. And the frameworks are predicated on strategic choices having to be made and on
organizations differing in how they make them.

Finally there may be two remaining differences. Because the OFF comprises three information
domains, not two, IS managers may relate to it more easily; this is one possible benefit of its being
issue driven. Secondly, the OFF addresses the linkages between the domains. An acid test of an
organization's strategy is does it provide clarification of intent and context for IS. A test of IS
strategy is does it provide orientation for IT decision-making. A test of a good IT strategy or
architecture is do we have confidence in it as a foundation for doing business in the information
age. A test of IM strategy is does it provide a constitution in which to tackle today's IT issues.
CRIM WP95/4 -- Integrating IS and the Organization 20

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