Strategic Orientation, Competition, and Internet-Based Electronic Commerce

This paper investigates the relationship between strategic orientation, competition, and Internet-based electronic commerce. We propose that firms use the Internet to support their strategy, and in a manner that will help them compete in their environment. We use technology policy and entrepreneurial orientation as examples of strategic orientations, focusing on (a) the extent to which linkages exist between these orientations and conducting business activities over the Internet, and (b) whether these linkages vary as a function of the competitive intensity of the environment in which the firm operates. Analyses are based on a sample of 150 firms from the magazine publishing industry. Our results show that the more aggressive the technology policy and the stronger the entrepreneurial orientation, the more the firm uses the Internet to conduct business activities. More important, the competitive intensity of the business environment moderated these relationships: Technology policy and entrepreneurial orientation were associated with the use of Internet-based electronic commerce under high levels of competitive intensity, but significantly less so under low levels of competitive intensity.