Compositional data analysis approach to organizational culture and strategic alignment

Abstract

This paper examines the research question about IT management culture characteristics and their contributions to the strategic alignment of the business. The study compares two fourquadrants models: Cameron and Quinn’s (2011) Competing Values Framework and Henderson and Venkatraman’s (1993) Strategic Alignment Model. For examining organizational culture, the first model attributes it to the four types of clan culture, adhocracy culture, market culture, and hierarchy culture with the dimensions of flexibility vs. stability and an internal vs. external focus. Similarly, the Strategic Alignment Model differs from four perspectives for business-IT alignment with functional integration into IT or business dimensions and the strategic fit, i.e., the internal vs. external orientation. These strategic alignment perspectives and their performance criteria equal a cost center, an investment center, a profit center, and a service center. In a survey, respondents had to divide 100 points between four options. For example, is the dominant IT management culture type that of a clan, adhocracy, market, or hierarchy? The corresponding ipsative scales originate from the Competing Values Framework and result in compositional data. After eliminating missing values and imputing zeroes, the analysis calculated a linear model with the ilr-transformed variables. Converting ilr coefficients into the clr space revealed a coefficient matrix with the weights of IT management culture and its alignment as the mapping of market culture to profit center at 0.125, adhocracy culture to investment center at 0.123, clan culture to cost center at 0.027, and hierarchy culture to a service center at 0.198