Strategic Alignment in SMEs: Strengthening Theoretical Foundations

Small and medium-sized enterprises (SMEs) are a vital part of the global economy in that they compose the vast majority of all businesses worldwide. In spite of these firms’ importance, they remain understudied in strategic alignment research. In this paper, we consolidate and extend the IS literature on strategic alignment in SMEs. We develop a set of theoretical propositions that outline the ways in which SMEs’ unique characteristics affect their ability to achieve and sustain alignment between their IS/IT strategy and their overall business strategy. In some respects, SMEs can achieve and sustain alignment as larger firms do, while, in other respects, they differ noticeably. We ground each of our propositions in the dynamic capabilities framework to strengthen the theoretical foundations of strategic alignment research, particularly in SMEs. We discuss the implications of our propositions and note theoretical issues emerging from the study of strategic alignment in the SME context