Concepts of Strategic Fit

For quite sometimes, there have been discourses regarding organizational transformations. Transformations have been necessary so as to take advantage of the fast-evolving and dynamic market environment. Of late, dynamism has been heightened by the introduction of information technology. Information technology regenerates in short cycles, a fact that requires entrepreneurs and business owners to anticipate dynamism in the market (McFarlan & Fred 2002, p. 15). Henderson and Venkatraman considered this transformation as an evolution aiming at integrating Information Technology with a variety of business models. They believed that bridging the gap between the two aspects was the only avenue that could enable the business to remain viable. Henderson and Venkatraman presented a model that could facilitate the measurement of maturity and readiness of an enterprise to handle dynamism in the market (Henderson & Venkatraman 1993, p. 15-16).

Organizations have been categorized into two domains: the business domain and the support infrastructure. Currently, the main support infrastructure has been the information technology.  Information technology presents tools for supporting business strategies and business models (Mcafee 2003, p. 10). Research works have indicated that divisions hinder progress of an enterprise. This is because the management is made to optimize in organizations, a scenario that lowers the performance of an enterprise. This issue prompted Henderson and Venkatraman to study and analyze the rewards of bridging the gap between Information Technology and business operations. They aimed at developing a strategy that could deliver quality results (Davenport 1998, p. 121-125). The strategy was aimed at assisting the enterprises to attain strategic and competitive advantage in their operations.

While studying the influence of Information Technology in business activities, Henderson and Venkatraman established that the systematic frameworks of conceptualizing logic, patterns, and scope of transformation was inadequate. As such, they proposed an Information Technology Alignment that could place an enterprise in a better position of taking advantage of the opportunities that avails in the market. They termed such an alignment as a strategic fit. The strategic fit is viewed as a perfect framework for analyzing and comparing departmental goals and objectives to those of the entire firm.

The Business Strategic Fit

Taking a voluntarisctic approach to organizational transformation makes the business strategy become the central concept of the analysis. This is a unique scenario which would differ if a deterministic approach is assumed. An enterprise’s strategic fit encompasses the business scope and governance as well as the distinctive competencies (Dutta & Kevin 2002, p. 85). Business scopes are the choices that pertain to the market offerings. These choices are established on structural mechanisms that help organize business operations. These mechanisms are what is referred to as the business governance. They help recognize the continuum that exists between hierarchy and markets. The infrastructure that Information Technology provides falls under the category of distinctive competencies. These competencies are the attributes of a business organization that makes it gain a competitive advantage over its competitors (Austin 2001, p. 8).

Information Technology is among the components that enable an enterprise to remain viable as it is able to adapt to the changing market conditions. It enables individuals to execute some of the key activities, and this facilitates the support for the business strategy. The implementation of Information Technology in business strategies is a new development, and as such, it has a variety of definitions. In this regard, the model presented by Henderson and Venkatraman has facilitated the conceptualization of the strategy presented by Information Technology in a manner that is multidimensional (Nolan 2001, p. 20). In essence, the strategy is constituted of 3 dimensions: the scope of information technology, the range and type of systems, and the systems’ capabilities. In this regard, the strategic fit model that Henderson and Venkatraman presented facilitates the incorporation of Information Technology capabilities into the business strategy. This has, in effect, helped in building consensus on what is comprised on the Information Technology strategy (Porter 2001, p. 75). This helps bridge the gap between the external alignments of a firm with its design of processes and structures.