Compositional Data Analysis of Organizational Culture and Business-IT Alignment

This research project examines the relationship between organizational culture and business-
IT alignment. With the Fourth Industrial Revolution and digitalization, this relationship is
changing. IT and its management tend to evolve from a service provider to a value creator. The
research question is about typical management culture characteristics and their contributions to
the strategic alignment to the business of the IT departments, teams, and solution providers.
For answering the research question, this study juxtaposes two four-quadrants models. First,
it applies Cameron and Quinn’s (2011) Competing Values Framework for examining organiza-
tional culture. This model attributes culture to the four types of clan culture, adhocracy culture,
market culture, and hierarchy culture with the dimensions of flexibility vs. stability and an in-
ternal vs. external focus. Similarly, Henderson and Venkatraman’s (1993) Strategic Alignment
Model differs four perspectives for business-IT alignment with the dimensions of functional inte-
gration into IT or business 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, the
dominant IT management culture type: is it 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 in R with the package compositions. Converting
ilr coefficients into the clr space revealed a variance-/covariance-matrix with the weights of IT
management culture and its alignment as the mapping of clan culture to cost center at 0.05,
adhocracy culture to investment center at 0.13, market culture to profit center at 0.17 and
hierarchy culture to service center at 0.19.