Technology alignment under two strategic contexts

Abstract

Technology alignment requires recognizing technology is as enabler of the firm's business strategy and a source of value creation only when it is properly used to support the business' goals. This work explores the degree of technology alignment under two strategic contexts: 1) small firms in a backwards integration setting where the firms are suppliers of large retailers, and 2) independent small retailers. Findings reveal small suppliers of large retailers align their technology infrastructure to the requirements of the dominant customers. Then they have implemented identification and communication electronic standards, are connected to customer's Intranet or establish communication via Internet, and have the technical expertise to perform electronic transactions with their customers. In contrast, the independent small retailers exhibit low levels of technology alignment in the sense of using information systems mainly to control cash flows and make tax payments instead of using technology to support their strategies of differentiation on customer's service. The results provide evidence that participation in a supply chain accelerates technology adoption among small firms.