Dehaish, Khalid Nasser (2022) A Digital Strategic Alignment Model for Enhancing Sustainable Performance in Saudi Water Companies. PhD thesis, Victoria University.

Abstract

The view on business strategy has changed significantly over time. In the past, a functional-level strategy prevailed in which IT strategy was subordinate to, and needed to align with a deliberate business strategy. Recently, the rapid development in digital technologies has left no industry untouched, and digital transformation has become an enabler and differentiator for businesses. Therefore, IT strategy transcends the view of alignment and moves towards a fusion of business and IT strategies, which is coined as digital business strategy. But its alignment with organisational design is yet to be realised to achieve sustainable business performance, particularly in the Saudi water industry. In Saudi Arabia, the water industry is undergoing a program of privatisation, large-scale restructuring and tremendous digital transformations to meet the needs of stakeholders (i.e. the government, shareholders, employees, partners, customers and society). This industry is fragmented within the public and private sectors wherein Saudi water companies are responsible for the supply of potable water, collection and treatment of wastewater and have government mandate to reorganise using new digital technologies, which would benefit the industry and be financially, socially and environmentally feasible for all. However, the water industry has had little research in the use of digital business strategy and its alignment process with organisational design that will lead to sustainable business performance. Therefore, the question is what extent the digital strategic alignment between digital business strategy and organisational design factors enhances sustainable business performance? Drawing on information processing view and knowledge-based view, this research aims to explore the impact of digital business strategy on organisational design factors, namely, structure, processes, people and rewards, to identify the success factors needed for digital strategic alignment that improves sustainable business performance in water companies. The research adopted the Star model of organisational design (Kates & Galbraith 2007) that includes these factors and used a qualitative approach with two case studies (Saudi public and private water companies). Qualitative data were collected using interviews, focus groups and document analysis, in addition to reviewing the existing literature. The data were analysed using a content analysis approach with a computer-aided open-access tool (QCAmap) developed by Mayring (2014). Through this study, 24 propositions were developed, 18 critical success factors (CSFs) were explored, and six criteria and nine metrics for sustainable business performance were identified. The 18 CSFs were divided into three groups—strategic, organisational and digital factors. Strategic factors include a shared digital strategic vision, shared digital strategic objectives, top management support, knowledge integration, simultaneous incremental–comprehensive development, digital partnerships management, quality management with key performance indicators (KPI), and change management. Organisational factors include agile structures, shared digital units, task redetermination, unified digital processes, unified digital flows of information, renewed digital skills and knowledge and digital governance in addition to the existing organisational design factors (i.e., people and rewards). Digital factors include integrated digital solutions, digital centralisation, and interoperability and compatibility. Together all help shape the novel digital organisational design to achieve digital strategic alignment. Thus, this study developed a Digital Strategic Alignment Model (DSAM), which includes all CSFs for the digital strategic alignment process that ensures sustainable business performance. Three factors, namely, renewed digital skills and knowledge, change management, and quality management with KPIs, support people and rewards in the existing organisational design literature as they influence organisational design factors to improve performance. The other (additional) 15 CSFs can be considered as novel knowledge contributions to elaborate the organisational design theory in the context of digital business strategy and sustainable business performance. However, there remain other factors to consider. Therefore, this study emphasises on future research in that these CSFs need quantitative investigation using survey to test how these CSFs affect the triple bottom line of sustainability. Practically, it informs managers that achieving digital strategic alignment is key to process improvement that benefits organisations, employees and users.

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