The ways in which a firm's information technology governance (ITG) policies and procedures are shaped and its organizational structure is designed can influence the IT-business strategy alignment of the firm. These arrangements can also impact the level of innovation that the firm can achieve---in this paper, this is defined as the firm's innovative orientation. Firms that recognize the relationship between well-strategized ITG, properly structured organization, and good IT-business strategy fit can benefit from the collective outcome of these concepts. The resulting benefits may include an increase in innovative orientation, which may translate into increased organizational performance. The researchers generate hypotheses grounded in the contingency and open systems theories and test these hypotheses empirically using inputs from an 18-question survey that was electronically administered to a group of IT managers, coordinators, VPs, and C-level personnel. An analysis of the resulting responses supports the conclusion that the organizational structure has a positive relationship to both IT-business strategy alignment and innovative orientation. Additionally, the results indicate IT-business strategies that are more aligned with each other have a positive relationship to innovative orientation, and those that are less aligned have a negative relationship to Innovative orientation.
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