Can internal strategic alignment influence performance? An empirical research applying structural equation modelling

Abstract

Purpose The purpose of this paper is to investigate the impact of internal strategic alignment (ISA) on business performance. A model is developed in which internal alignment is explained by the covariance between vertical and horizontal alignment. The perspective of business strategy implementation is adopted in order to support the theoretical relationship between the variables. Design/methodology/approach The partial least squares method, a structural equation modeling technique, is applied to estimate the model. Findings The results provide empirical validation for the model and confirm the positive relationship between internal alignment and business performance. Practical implications The ISA model is an essential aid for executives when implementing strategies and the validated research instrument can be applied for firms as a diagnosis of internal alignment in the organization. Originality/value The research contributed to meet the need for studies involving strategy implementation, as its formulation has already been emphasized, as well as to the need for models of strategic internal alignment that include activities relevant to the successful execution of the strategy, and to the need for alignment studies based on a holistic perspective.