Strategic alignment

The concept of strategic alignment is significant in the context of a global business environment where activities need to be coordinated across regions and time zones. Strategic alignment encompasses not only technical and functional activities, but also issues relating to human resource management (and how best to develop people's motivation and capability). Studies suggest that the alignment of business strategy and HR strategy can impact performance. The process may extend across organizations and groups that share complementary objectives, e.g. business partners. It has also been found that coalignment of business strategy, business structure, IT strategy, and IT structure contributes to performance. Many projects, but not all, are initiated using a business case, and a business case can include details regarding strategic alignment.

Superordinate Principles

Creating operational alignment involves translating an organization's Superordinate Goals and overall strategy into the more immediate objectives of a team or department. In addition to reviewing systems and processes, leaders also need to develop the skills, competencies and motivation of people in the organization. The McKinsey 7s Framework provides an overview of this type of analysis, highlighting elements that contribute to alignment. This type of review, with follow-up interventions, contribute to key activities (linked to products and services) meeting customer and stakeholder expectations. At the same time, effective internal systems ensure the best use of resources, which contributes to future success.

Strategic Alignment requires awareness of Superordinate Principles that may include the 3BL "triple bottom line" perspective. This emphasizes criteria that take account of Planet, People & Profit (3P Thinking). It raises issues relating to Corporate Governance, which now include social and environmental considerations. KPMG make the point: "Businesses not taking ESG seriously are beginning to lose customers, employees and financing; eventually they will become unviable."

There are two main models of corporate governance, (i) the shareholder model, which prioritizes the return on investment for investors, and (ii) the stakeholder model that also emphasizes a responsibility towards other groups and wider considerations. Guiding principles relating to Environmental, Social and Corporate Governance (ESG) is at the heart of the new thinking.