Following a consulting firm's report in 1993, the CEO and the other senior managers began recognizing the need for major changes to respond to several international companies' entry into Australia. This caused a shift to an Analyzer strategy as Beta searched for ways to simultaneously accomplish three strategic objectives: global competitiveness, a 35 to 40 percent reduction in business expenses, and entry into the high-growth IS industry. In accordance with
the Analyzer strategy, the CEO sought to acquire a stake in the IS industry hy creating an alliance with a major IS provider rather than purchasing an IS company. IS shifted to a comprehensive role, with IS being expected to help both in generating external revenues through a 35% stake in an IS company and in significantly reducing business costs. Thus, with the company changing to an Analyzer business strategy, IS changed to a comprehensive role, thereby increasing the alignment between these two dimensions. A joint venture was formed with a large international IS vendor and Beta outsourced its IS activities to the company. Additionally, Beta changed the way the decisions were made; IS decisions were now the province of the corporate CEO and CIO, while the historically independent business units had little say in the matter. The IS function had become centralized. Thus, IS sourcing and IS structure changed in a mutually consistent albeit excessive fashion; they changed too far, to outsourcing and centralization instead of to selective sourcing and a shared structure, respectively. As a result of this excessive transformation, alignment decreased; the business strategy and the IS role were aligned with each other, and IS sourcing was aligned with IS structure, but the two pairs were not mutually aligned. Consequently, Beta's financial performance remained stable without further
improvement; its net earning per share remained steady from 1994 to 1996.