Instructor Manual for Managing and Using IS, Eighth Edition-Chapter 1 Page 1
Chapter 1: The Information Systems
Strategy Triangle
Overview
This chapter presents a very simple framework, the Information Systems (IS) Strategy Triangle,
which links business strategy with organizational strategy and information systems strategy. It
introduces the concept of alignment of components of the IS Strategy Triangle and discusses how
digital transformation impacts their alignment. The terms strategy, digital business strategy and
business model are defined and distinguished from one another. The chapter elaborates on how
business models can add value to firms. It presents several popular strategies and organizational
frameworks. The goal of this chapter is to make sure every student has a basic understanding of
both strategy and organizations. For students familiar with business strategy and organizational
behavior, this chapter is a review of key points from those two fields.
Discussion Opener: One of the first slides of each chapter, following the title or agenda slide (if
present), provides discussion questions that cover the opening case. It would be a good idea to set
the tone for the entire course by putting students on notice that they should read the chapters before
coming to class. The “notes” portion of the slide deck provides brief answers that instructors can
see if they use a multi-screen approach. In PowerPoint 2016 or earlier, after enabling the external
screen as an extended monitor, make sure to click the “set up slide show” icon and choose “Use
presenter view.” The notes will show up on your screen while the presentation will show up on the
main projector.
Note: If you provide slides to the students, you can delete the brief answers on the opening slide of
the student version for each chapter before making the slide decks available.
Alternate Discussion Opener: Why should general managers have a broad understanding of
information systems? How can that knowledge be helpful in their careers?
Key Points in Chapter
The Information Systems Strategy Triangle in Figure 1.1 links business strategy with
organizational strategy and information systems strategy. The triangle is used to suggest that all
three points must be aligned in any organization to optimize efficiency and effectiveness. A lack of
alignment can lead to organizational tension or possibly a crisis, as exemplified in the text by the
introductory Southwest Airlines case.
The concept of alignment has been modified slightly in this edition to accommodate the concept of
digital transformation. There are many different definitions of digital transformation. The
definition used in this edition is a popular one first described by Wessel, Baiyere, Ologeanu-
,Instructor Manual for Managing and Using IS, Eighth Edition-Chapter 1 Page 2
Taddei, Cha, and Blegind-Jensen1: the use of digital technology by an organization to redefine (and
not just support) its value proposition and which leads the organization to identify itself in a new
way. In cases of digital transformation, a more nuanced view of alignment must be adopted.
In previous editions, when applying the IS Strategy Triangle, alignment was equated to balance
alone, and IS and organizational strategies were always driven by business strategy. IS strategy
was always seen as complementing business strategy by enabling and supporting it. However, in
cases of digital transformation, synchronization and convergence must also be considered.
Synchronization allows technology not only to enable the current business strategy, but also to
anticipate and shape future business strategy. Convergence means that business strategy and IS
strategy are “intertwined” since they are, in fact, one. A company typically is considered to be out
of “alignment” when the IS does not support its business strategy. With digital transformation,
however, it is important to note that the IS strategy is the business strategy, and the IS strategy does
more than just support the business strategy.
There are several implications of alignment in regard to the IS Strategy Triangle. First.
organizational strategy must complement business strategy. Second, organizational and IS strategy
should complement each other. Finally, if a change is made to one corner of the triangle, it is
necessary to evaluate the other two corners to ensure that alignment is maintained. That means that
if the business strategy is changed (i.e., such as becoming a "bricks and clicks" company), then the
manager must also consider a redesign of both the organization (i.e., do we have people that can be
successful in this new strategy) and the information systems (i.e., do we have the capability to
process inquiries and comments made on social media).
Strategy is defined as “a coordinated set of actions to fulfill objectives, purposes, and goals” and it
should reflect the mission of the organization. Examples of mission statements are provided in the
text (Figure 1.2). A digital business strategy is a specific type of strategy, that is, a business
strategy that leverages digital technologies to meet an organization’s objectives, purposes and
goals. A digital business strategy can be helpful for companies operating in dynamic environments
and can require close alignment with the IS strategy. In some cases, the IS strategy may even
become the digital business strategy. It is influenced by the digital technological capabilities of the
firm as applied in changing market environments.
A business model is one component of a business strategy. It is essentially a blueprint of how a
company conducts business. The business model can be used to both create and capture value. A
business can create value without bringing in new revenue from customers (by saving costs or
investing in future revenue). In addition, data-driven business models are both new and effective
and are enabled by big data and business analytics tools. This edition introduces four major
dimensions of a business model—all of which are concerned with value: (1) value proposition is
focused on a firm’s market offerings and targeted customer group(s); (2) value architecture
describes the configuration of core resources and capabilities that a firm needs to create its market
offerings; (3) value network involves interfirm relationships and interactions with key external
1
Wessel, Lauri, Abayomi Baiyere, Roxana Ologeanu-Taddei, Jonghyuk Cha, and Tina Blegind-Jensen. “Unpacking the
Difference Between Digital Transformation and IT-enabled Organizational Transformation,” Journal of the Association
for Information Systems 22, no. 1 (2021): 102–129.
,Instructor Manual for Managing and Using IS, Eighth Edition-Chapter 1 Page 3
partners and stakeholders; (4) value finance primarily focuses on a firms revenue model, pricing
strategies, and cost structure.
There are several frameworks for understanding business strategy. This chapter summarizes two
well-accepted models: the Porter Generic Strategies and Dynamic Environment Strategies. Current
examples are offered to illustrate the models.
The Porter Generic Strategies Framework (Differentiation, Cost Leadership, Focus) has spawned
many variants. A cost leadership focus means that the company maintains above average
performance by selling products that are comparable in quality (i.e., the customer perceives relative
value), but at a lower price in the marketplace. Differentiation strategy involves uniqueness of the
product in the marketplace in some appreciable qualitative dimension. A focused strategy directs
products to meet the specific needs of a particular segment of the market, either based on cost focus
or differentiation focus.
Dynamic environment strategies are useful to study. One example is the hypercompetition
concept, which asserts that it is more important to disrupt than to attempt to sustain an advantage.
Another is the creative destruction strategy, which focuses on what competitors might do to
attempt to destroy the firm, and then what moves should be taken to counteract those attacks.
Finally, a dynamic capabilities view helps an organization use its internal capabilities and
resources to respond successfully to its rapidly changing environment. A firm is perceived as
having clusters of dynamic capabilities for sensing opportunities and change in the environment,
seizing internal resources to take advantage of the environmental opportunities and changes, and
consequently transforming (including reconfiguring) resources (as opposed to buying them). See
Figure 1.3, for a summary of strategic approaches and IT applications.
Organizational strategy is a plan that answers the question, “How will the company organize to
achieve its goals and implement its business strategy?” The chapter describes a useful framework
for organizational design in the Managerial Levers Model (Figure 1.4). That comprehensive
model links organizational structure variables, control variables, and cultural variables. Decision
makers can manipulate the managerial levers to effect change within the organization. Chapters 3,
4, and 5 discuss the managerial levers in greater detail and apply the organizational strategy
frameworks to assessing the impact of IS.
The IS strategy provides the plan for information services supports the business strategy through
needs fulfillment. Figure 1.5 provides a basic framework showing the four components of the
information systems strategy: platforms, applications (apps), networking and data, as well as the
key managerial concerns for each: what, who, and where.
Optional Discussion Question: How can we recognize a misalignment between business strategy
and IS strategy? Do you have any examples from internships or work experiences?
, Instructor Manual for Managing and Using IS, Eighth Edition-Chapter 1 Page 4
Illustrative Answers to Chapter Discussion
Questions
This is a summary chapter of the key models for the information systems strategy triangle, so
discussion questions are provided to get students focused on and thinking about using these models.
Below are sample answers but expect creative answers from your students that are not represented
here. We encourage you to post some of your best answers to the Hub, the online community
website, and share them with other instructors.
1. Why is it typically important for business strategy to drive organizational strategy and IS
strategy? What might happen if the business strategy is not the driver?
Ans: The primary point in this chapter is that in any well-run organization, the business strategy
drives the rest of the operational strategy, and information systems are no different. The business
strategy defines the goals and objectives based on the organizational capabilities and structure.
Information systems are intended to enable and facilitate successful realization of goals and
objectives. Technology for its own sake is not usually a good investment. However, typically,
managers seem to think that changing or upgrading an information system (or even a component of
an information system) will only positively impact a business. This is commonly referred to as the
“Technological Imperative.” Quite the opposite, in fact, is true. By making changes only in IT,
impacting the information strategy, the triangle is "out of balance," and there will be consequences
in the affected areas. For example, building a virtual organization with hybrid remote work
arrangements, but not changing the business and organizational strategies to support the notion of
"ensuring personnel are productive and have the widest possible work opportunities" can lead to
significant disconnects between workers, their managers, and their customers. And worse, without
supplying the remote worker with the appropriate information system (a capable computer at home,
a versatile and light laptop, etc.) and technical support will lead to a decrease in productivity by the
remote worker, and a major disruption of business operations. Therefore, allowing IS strategy to
drive business strategy could easily lead to poor implementations with disappointing outcomes (i.e.,
wasted resources). The only exception is when an organization plans to undergo a digital
transformation. In that case, the IS and the business strategy converge. The business strategy and
the IS strategy become one and are supported by the organizational strategy.
2. Consider a traditional manufacturing company that wants to undergo a digital transformation.
What might be a reasonable business strategy, and how would it relate to IS strategy? How would
organizational strategy need to change? How would this differ for a restaurant chain? A consumer
products company? A nonprofit?
Ans: Students need to be creative in developing a business strategy that would allow the
manufacturing company to completely transform itself. It is critical that their responses indicate
that the IS strategy is the business strategy. The business strategy could be one of servitization in
which the company uses its knowledge of manufacturing a particular good to leverage itself into
providing a service about that good. Perhaps it could incorporate sensors in the Internet of Things
to provide information about the performance of that good; Perhaps it could use big data and data
Chapter 1: The Information Systems
Strategy Triangle
Overview
This chapter presents a very simple framework, the Information Systems (IS) Strategy Triangle,
which links business strategy with organizational strategy and information systems strategy. It
introduces the concept of alignment of components of the IS Strategy Triangle and discusses how
digital transformation impacts their alignment. The terms strategy, digital business strategy and
business model are defined and distinguished from one another. The chapter elaborates on how
business models can add value to firms. It presents several popular strategies and organizational
frameworks. The goal of this chapter is to make sure every student has a basic understanding of
both strategy and organizations. For students familiar with business strategy and organizational
behavior, this chapter is a review of key points from those two fields.
Discussion Opener: One of the first slides of each chapter, following the title or agenda slide (if
present), provides discussion questions that cover the opening case. It would be a good idea to set
the tone for the entire course by putting students on notice that they should read the chapters before
coming to class. The “notes” portion of the slide deck provides brief answers that instructors can
see if they use a multi-screen approach. In PowerPoint 2016 or earlier, after enabling the external
screen as an extended monitor, make sure to click the “set up slide show” icon and choose “Use
presenter view.” The notes will show up on your screen while the presentation will show up on the
main projector.
Note: If you provide slides to the students, you can delete the brief answers on the opening slide of
the student version for each chapter before making the slide decks available.
Alternate Discussion Opener: Why should general managers have a broad understanding of
information systems? How can that knowledge be helpful in their careers?
Key Points in Chapter
The Information Systems Strategy Triangle in Figure 1.1 links business strategy with
organizational strategy and information systems strategy. The triangle is used to suggest that all
three points must be aligned in any organization to optimize efficiency and effectiveness. A lack of
alignment can lead to organizational tension or possibly a crisis, as exemplified in the text by the
introductory Southwest Airlines case.
The concept of alignment has been modified slightly in this edition to accommodate the concept of
digital transformation. There are many different definitions of digital transformation. The
definition used in this edition is a popular one first described by Wessel, Baiyere, Ologeanu-
,Instructor Manual for Managing and Using IS, Eighth Edition-Chapter 1 Page 2
Taddei, Cha, and Blegind-Jensen1: the use of digital technology by an organization to redefine (and
not just support) its value proposition and which leads the organization to identify itself in a new
way. In cases of digital transformation, a more nuanced view of alignment must be adopted.
In previous editions, when applying the IS Strategy Triangle, alignment was equated to balance
alone, and IS and organizational strategies were always driven by business strategy. IS strategy
was always seen as complementing business strategy by enabling and supporting it. However, in
cases of digital transformation, synchronization and convergence must also be considered.
Synchronization allows technology not only to enable the current business strategy, but also to
anticipate and shape future business strategy. Convergence means that business strategy and IS
strategy are “intertwined” since they are, in fact, one. A company typically is considered to be out
of “alignment” when the IS does not support its business strategy. With digital transformation,
however, it is important to note that the IS strategy is the business strategy, and the IS strategy does
more than just support the business strategy.
There are several implications of alignment in regard to the IS Strategy Triangle. First.
organizational strategy must complement business strategy. Second, organizational and IS strategy
should complement each other. Finally, if a change is made to one corner of the triangle, it is
necessary to evaluate the other two corners to ensure that alignment is maintained. That means that
if the business strategy is changed (i.e., such as becoming a "bricks and clicks" company), then the
manager must also consider a redesign of both the organization (i.e., do we have people that can be
successful in this new strategy) and the information systems (i.e., do we have the capability to
process inquiries and comments made on social media).
Strategy is defined as “a coordinated set of actions to fulfill objectives, purposes, and goals” and it
should reflect the mission of the organization. Examples of mission statements are provided in the
text (Figure 1.2). A digital business strategy is a specific type of strategy, that is, a business
strategy that leverages digital technologies to meet an organization’s objectives, purposes and
goals. A digital business strategy can be helpful for companies operating in dynamic environments
and can require close alignment with the IS strategy. In some cases, the IS strategy may even
become the digital business strategy. It is influenced by the digital technological capabilities of the
firm as applied in changing market environments.
A business model is one component of a business strategy. It is essentially a blueprint of how a
company conducts business. The business model can be used to both create and capture value. A
business can create value without bringing in new revenue from customers (by saving costs or
investing in future revenue). In addition, data-driven business models are both new and effective
and are enabled by big data and business analytics tools. This edition introduces four major
dimensions of a business model—all of which are concerned with value: (1) value proposition is
focused on a firm’s market offerings and targeted customer group(s); (2) value architecture
describes the configuration of core resources and capabilities that a firm needs to create its market
offerings; (3) value network involves interfirm relationships and interactions with key external
1
Wessel, Lauri, Abayomi Baiyere, Roxana Ologeanu-Taddei, Jonghyuk Cha, and Tina Blegind-Jensen. “Unpacking the
Difference Between Digital Transformation and IT-enabled Organizational Transformation,” Journal of the Association
for Information Systems 22, no. 1 (2021): 102–129.
,Instructor Manual for Managing and Using IS, Eighth Edition-Chapter 1 Page 3
partners and stakeholders; (4) value finance primarily focuses on a firms revenue model, pricing
strategies, and cost structure.
There are several frameworks for understanding business strategy. This chapter summarizes two
well-accepted models: the Porter Generic Strategies and Dynamic Environment Strategies. Current
examples are offered to illustrate the models.
The Porter Generic Strategies Framework (Differentiation, Cost Leadership, Focus) has spawned
many variants. A cost leadership focus means that the company maintains above average
performance by selling products that are comparable in quality (i.e., the customer perceives relative
value), but at a lower price in the marketplace. Differentiation strategy involves uniqueness of the
product in the marketplace in some appreciable qualitative dimension. A focused strategy directs
products to meet the specific needs of a particular segment of the market, either based on cost focus
or differentiation focus.
Dynamic environment strategies are useful to study. One example is the hypercompetition
concept, which asserts that it is more important to disrupt than to attempt to sustain an advantage.
Another is the creative destruction strategy, which focuses on what competitors might do to
attempt to destroy the firm, and then what moves should be taken to counteract those attacks.
Finally, a dynamic capabilities view helps an organization use its internal capabilities and
resources to respond successfully to its rapidly changing environment. A firm is perceived as
having clusters of dynamic capabilities for sensing opportunities and change in the environment,
seizing internal resources to take advantage of the environmental opportunities and changes, and
consequently transforming (including reconfiguring) resources (as opposed to buying them). See
Figure 1.3, for a summary of strategic approaches and IT applications.
Organizational strategy is a plan that answers the question, “How will the company organize to
achieve its goals and implement its business strategy?” The chapter describes a useful framework
for organizational design in the Managerial Levers Model (Figure 1.4). That comprehensive
model links organizational structure variables, control variables, and cultural variables. Decision
makers can manipulate the managerial levers to effect change within the organization. Chapters 3,
4, and 5 discuss the managerial levers in greater detail and apply the organizational strategy
frameworks to assessing the impact of IS.
The IS strategy provides the plan for information services supports the business strategy through
needs fulfillment. Figure 1.5 provides a basic framework showing the four components of the
information systems strategy: platforms, applications (apps), networking and data, as well as the
key managerial concerns for each: what, who, and where.
Optional Discussion Question: How can we recognize a misalignment between business strategy
and IS strategy? Do you have any examples from internships or work experiences?
, Instructor Manual for Managing and Using IS, Eighth Edition-Chapter 1 Page 4
Illustrative Answers to Chapter Discussion
Questions
This is a summary chapter of the key models for the information systems strategy triangle, so
discussion questions are provided to get students focused on and thinking about using these models.
Below are sample answers but expect creative answers from your students that are not represented
here. We encourage you to post some of your best answers to the Hub, the online community
website, and share them with other instructors.
1. Why is it typically important for business strategy to drive organizational strategy and IS
strategy? What might happen if the business strategy is not the driver?
Ans: The primary point in this chapter is that in any well-run organization, the business strategy
drives the rest of the operational strategy, and information systems are no different. The business
strategy defines the goals and objectives based on the organizational capabilities and structure.
Information systems are intended to enable and facilitate successful realization of goals and
objectives. Technology for its own sake is not usually a good investment. However, typically,
managers seem to think that changing or upgrading an information system (or even a component of
an information system) will only positively impact a business. This is commonly referred to as the
“Technological Imperative.” Quite the opposite, in fact, is true. By making changes only in IT,
impacting the information strategy, the triangle is "out of balance," and there will be consequences
in the affected areas. For example, building a virtual organization with hybrid remote work
arrangements, but not changing the business and organizational strategies to support the notion of
"ensuring personnel are productive and have the widest possible work opportunities" can lead to
significant disconnects between workers, their managers, and their customers. And worse, without
supplying the remote worker with the appropriate information system (a capable computer at home,
a versatile and light laptop, etc.) and technical support will lead to a decrease in productivity by the
remote worker, and a major disruption of business operations. Therefore, allowing IS strategy to
drive business strategy could easily lead to poor implementations with disappointing outcomes (i.e.,
wasted resources). The only exception is when an organization plans to undergo a digital
transformation. In that case, the IS and the business strategy converge. The business strategy and
the IS strategy become one and are supported by the organizational strategy.
2. Consider a traditional manufacturing company that wants to undergo a digital transformation.
What might be a reasonable business strategy, and how would it relate to IS strategy? How would
organizational strategy need to change? How would this differ for a restaurant chain? A consumer
products company? A nonprofit?
Ans: Students need to be creative in developing a business strategy that would allow the
manufacturing company to completely transform itself. It is critical that their responses indicate
that the IS strategy is the business strategy. The business strategy could be one of servitization in
which the company uses its knowledge of manufacturing a particular good to leverage itself into
providing a service about that good. Perhaps it could incorporate sensors in the Internet of Things
to provide information about the performance of that good; Perhaps it could use big data and data
