Chapter 2: Literature Review

The use of IS/IT [1] as strategic tools to respond to meet the growing needs of their people is currently the norm for most governments worldwide and the Government of Abu Dhabi is no exception. Increasingly today more and more governments are relying more heavily on SIS (Norris & Demeter, 1999).

IT continues to be an indispensable and integral component of the services industry and in consequence IT has had a major impact on the organisational performance of the services sector of the private sector as well as the government over the past few decades (Charalabidis, Sarantis, and Askounis, 2009). Furthermore, the use of IS/IT has changed the way organisations compete today as IT is increasingly considered as a strategic resource which requires top management attention (McFarlan, 1984; Norris & Demeter, 1999). As SIS focuses on the strategic use of IS/IT in the complex managerial process of the organisation, the role of SIS has been analysed by using the concepts from strategic management literature and IS/IT by many researchers.

Accordingly, this chapter discusses the relevant literature from the areas of strategic management and information systems to obtain an understanding of the strategic management of information systems for the purpose of this research study.

As SIS is developed and implemented within a strategic management environment, the chapter first reviews the different views on strategy from the literature on strategic management and thereafter reviews the role of information systems in obtaining competitive advantages from a strategic viewpoint. It also discusses the role of Information Technology (IT) in a firm from the strategic management literature and the impact which IT has on an organisation. Thereafter a brief discussion on the use of information systems in the Abu Dhabi public sector is presented.

Strategy and Strategic Orientation to Management

The term ‘strategy’ is difficult to define as it continues to be evolving and as a result the term ‘strategy’ has been defined differently by different authors (Andersen, Belardo, and Dawes, 1994). Likewise, De Wit and Meyer (2004) state that there is no consensus among the authors on most of the key issues within the field of strategic management which had resulted in widespread disagreements such that having an acceptable definition of the term ‘strategy’ is illusive.

For instance, Mintzberg, Lampel, Quinn, and Ghoshal (2002) assert that strategy has been viewed from various different perspectives which include: plan, process, pattern, position, politics, and ploy. Furthermore, strategic activities like, strategic planning (Harrison, 2003), strategic decisions and strategic management (Fitzroy & Hulbert, 2005) are used interchangeably, which together make defining strategy more complicated.

Nonetheless the following definitions from the strategic management literature have been given here to provide an understanding of strategy, the most notable being Chandler’s (1962) early definition of strategy.

Chandler (1962, p.13) defined ‘strategy’ as, “the determination of the basic long term goals of an enterprise and the adoption of courses of action and the allocation of resources necessary to carry out these goals”.

According to Andrews (1980), “strategy is the pattern of objectives, purposes, or goals and major policies and plans … to define what business the company is in or is to be in and the kind of company it is or is to be”.

Johnson and Scholes (2001) have defined strategy as, “the direction and scope of an organization over the long term, which achieves advantage for the organization through its configuration of resources within a changing environment, to meet the needs of markets and to fulfil stakeholder expectations”.

In Barney’s (2002) words, “… Strategy is … a firm’s theory about how to compete successfully”.

De Wit and Meyer (2004) define strategy as, “a course of action for achieving an organization’s purpose”.

Increasingly today in the strategic management literature, strategy is seen as the interrelationship between these processes: strategic thinking, strategic planning, and strategic decisions (Harrison, 2003; Fitzroy & Hulbert, 2005).

Fitzroy and Hulbert (2005) distinguish between: Strategy, Strategic Decisions, and Strategic Management as follows:

“Strategic Decisions: are those that affect the long-term well-being of the organization

Strategy: is the common theme underlying a set of strategic decisions

Strategic Management: is concerned with creating organizations that generate values”.

On the other hand, Harrison (2003) distinguishes Strategic Thinking, Strategic Planning and Strategic Management as follows:

“Strategic Thinking: a creative and intuitive process that leads to creative solutions and new ideas

Strategic Planning: the formal planning elements of strategy formulation that result in a strategic plan: a process that tends to be rather rigid and unimaginative

Strategic Management: a process through which organizations analyze and learn from their internal and external environments, establish strategic direction, create strategies that are intended to move the organization in that direction, and implement those strategies, all in effort to satisfy key stakeholders”.