Assessing the Influence of Aligning It Strategy, Performance Contract and It Organizational Structure on Institutional Performance. Case of Kenyan Public Universities.

Abstract

The concept of aligning IT strategy with organizational strategy remains to be a key concern for scholars and enterprises over decades. Most studies on strategic alignment have confirmed that there exists a positive relationship between strategic alignment and institutional performance. These findings however are limited due to a few factors. One, most of these studies focused on developing countries and the business sector. Two, there is scarcely any study that has examined alignment using performance contracts as a corporate or business strategy. In this study; we try to fill the research gap by assessing the influence alignment of IT strategy, Performance Contract and IT organizational structure would have on public university’s performance in a developing country. The researcher therefore develops a research model to conceptualize the relationships between the various constructs. Three hypotheses were further formulated and tested using basic linear and multiple regression techniques based on survey data collected from all the twenty public universities in Kenya that had signed Performance Contracts with the Government. Our findings show a positive statistical relationship between IT Strategy – Performance Contract alignment on institutional performance. It further shows a positive statistical relationship between IT strategy – IT organizational structure alignment on institutional performance. The co-alignment of the two relationships also indicated a positive effect on institutional performance. Due to this strategic alignment, the innovative nature of the public university is improved through automation which in turn improves on the competitive advantage. One of the key hindrances to effective strategic alignment identified in this study was inadequate funds to support the IT projects as identified in the IT strategy and the performance contract. The findings of this study however support our model and confirm the three hypotheses. Keywords: IT strategy, performance contract, alignment of IT with Performance Contract, strategic alignment, IT organizational structure, institutional performance