| Research on innovation addresses the importance of market orientation and market learning in developing a competitive advantage. The synergistic effect of market and entrepreneurial orientations on innovation has been explored extensively. However, radical innovation orientation (RIO) as conceptualized by Tellis, Prabhu, and Chandy (2009) has not been widely utilized as a measure of competitive advantage. A significant void exists in extant literature on the combined impact of market focus and market learning on radical innovation orientation in small U.S. businesses.;Utilizing the Hurley and Hult Model of Organization and Market-Driven Innovation (1998) the researcher explored the relationship between market focus on radical innovation orientation, the influence of market learning style on radical innovation orientation, and the impact of radical innovation orientation on achieving firm-level growth targets. A total of 353 small business decision makers were surveyed.;Market learning style (Lichtenthaler, 2009) measured firm-level recognition and assimilation of opportunities (as exploratory learning), knowledge maintenance and reactivation (as transformative learning), and the transmutation and application of knowledge in markets (as exploitative learning). Market focus was comprised of, and measured by, the separate and distinct constructs of market and entrepreneurial orientations as utilized by Vitale, Giglierano, and Miles (2003). Market orientation (MO) was defined by the three dimensions of knowledge of market, dissemination of market information, and marketing activities' contribution to customers' value. A firm's entrepreneurial orientation (EO) was measured by the level of innovating, proactive market action, and management of risk. New product development activity was measured based on Page's (1993) construct. The growth target achieved scale was adapted from the Quick Audit survey developed by Vitale et al.;Multiple regression analysis was utilized to test six hypotheses. The results present a market oriented innovator's dilemma: while previous research asserts that market oriented firms innovate and enjoy greater performance (Matsuno, Mentzer, and Ozsomer, 2002), this study's findings strongly suggest that entrepreneurially oriented firms generate higher levels of radical innovation orientation and greater opportunities for competitive advantage. Managers who want to increase firm-level radical innovation orientation in the short term need to increase their entrepreneurial orientation and exploratory learning, and decrease their focus on market orientation, new product development, and achieving growth targets. Thus, the dilemma: market oriented firms should pursue their market-driven cultures at the risk of generating limited levels of innovativeness and innovative capacity, recognizing that the short term benefits of market orientation could translate into significant obstacles to radical innovation and competitive advantage in the long term. |
