Effect of strategic orientation on innovation and performance : the case of multiple channel retailing (MCR)

Over the past decade technological, administrative and marketing innovations have grown at unprecedented rates in the retail industry. Among this wave of innovation, no single technology has generated as much interest as the phenomenon of multiple channel retailing (MCR). MCR is the practice of distributing goods to consumers through both traditional brick-and-mortar outlets and through the Internet channel. Though many retailers jumped on the early MCR bandwagon, a number of large players have scaled back their Internet operations over the past two years (Sheraga, 2001). The current research uses Organizational Diffusion of Innovations (ODI) theory to examine the determinants of MCR adoption within this industry. Previous research into ODI phenomena has not delved deeply into the influence of competitor behavior on organizational adoption decisions. The current research considers the effect of firm strategy on MCR innovation and firm performance in the domestic retail industry. The Miles and Snow strategic typology is used as the theoretical basis for the strategy concept. A network of hypotheses is posited based on the extant ODI literature, the Miles and Snow theory and the current state of MCR diffusion. Hypotheses are tested using field data collected through a mail survey. Data were collected from key informants inside domestic retail chains (N = 102). Multivariate Analysis of Covariance (MANCOVA) suggests that strategic orientation is related to innovation among U.S. retail firms. This relationship is significant while adjusting for an organizational size covariate. Results also suggest that the Miles and Snow typology is effective in explaining strategic contingencies in the retail context. Implications and research directions for theory and practice are offered.