Exploring the Impact of Aligning Business and is Strategy Types on Performance in Small Firms

This paper assesses the impact of Miles and Snow’s business strategy and Sabherwal and Chan’s IS strategy types on business performance in small firms using the Profile Deviation Approach. Survey data collected from 93 small firms across various industry sectors throughout Australia revealed an interesting mix of business strategy and IS strategy types similar to those reported in large firms. Results showed that while business-IT alignment was positively related to performance in all 93 small firms, the difference was not significant. Measuring alignment and performance within business strategy types revealed alignment was positively and significantly related to business performance for Prospectors and Analyzers, but not Defenders. Findings suggest that Defenders can benefit from deploying ICT in a variety of ways to enhance performance, while Prospectors should focus their use of ICT on quick strategic decisions, and Analyzers should concentrate on using ICT to facilitate comprehensive decisions and quick responses