Factors Affecting Dynamic Strategic Alignment in a Changing Environment: A Case Study of a Chinese SOE

Abstract Environmental factors significantly affect the dynamic strategic alignment of information systems (IS) in coping with a rapidly changing environment, especially for state-owned enterprises (SOEs) in emerging economies. By examining the case study of a medium-sized Chinese state-owned real estate company, this research aims to investigate what environmental factors affect SOEs’ strategic alignment. The thematic analysis method was used to analyse semi-structured interviews with staffs at all levels of the organisation and relevant strategy documents. The research develops a holistic model to illustrate the influencing factors from SOEs’ internal (i.e., organisational structure, culture and resources) and external environments (i.e., politics, economy, technology and national culture) while highlighting the overall influences from the nature of SOEs. It identifies that organisational resources, whose easy access is enabled by SOEs’ state-owned character, significantly reduce the need for strategic alignment to gain competitive advantage in the short term. In addition, SOEs’ inherent attributes of organisational structure and culture impede the social and structural integration between business and IT. Managerial implications are suggested with a particular emphasis on internal factors, such as developing IS/IT from organisational resources and cultivating the perception of the importance of IS. The paper also points to the importance of implementing government authorities’ policies and instructions about IS strategy.