Managerial Discretion and E-CRM Performance

Managerial Discretion and E-CRM Performance

Tim Coltman (University of Wollongong, Australia)
DOI: 10.4018/978-1-60566-154-4.ch003
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Most sectors of industry, commerce, and government have reported variation in the performance payoff from electronic customer relationship management (e-CRM). In this paper we build on a surprisingly sparse literature regarding the importance of managerial discretion, to show that the heterogeneity of beliefs held by managers about e-CRM execution matter when explaining e-CRM success. Drawing on a data sample comprising 50 interviews and 293 survey responses we utilise segmentation techniques to identify significant differences in managerial beliefs and then associate these belief segments with e- CRM performance. Results indicate that three distinct types of managers can be identified based on the heterogeneity of their e-CRM beliefs: (1) mindfully optimistic, (2) mindfully realistic, and (3) mindfully pessimistic. Further, our results imply that there are far less homogeneity at the individual firm level than is normally assumed in the literature, and that heterogeneity in managerial beliefs is systematically associated with organisational performance. Finally, these results serve to remind practitioners that e-CRM performance is dependent upon the right balance between managerial optimism and realism.
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Variation in the degree of business success has been attributed to the importance of the customer and the competitive advantages associated with a market orientation (Rust et al. 2000). One view of market orientation defines it as the ability to systematically gather and analyse customer and competitor information, to share this market knowledge, and then to use this knowledge to guide strategy recognition, understanding, creation, selection, implementation and modification (Hunt & Morgan 1995). It should also come as no surprise that many marketers have turned to information technology─in particular customer relationship management (CRM)─as a way to support customer-oriented thinking, customer analysis and understanding (Javalgi et al. 2006; Ray et al. 2005).

According to research analyst, the Gardner Group, corporate investment in CRM technology will continue to grow at a compound annual rate of 11.7 percent during the 2006-2011 period (Lauchlan 2007). Reports of a positive link between CRM uptake and improved firm performance have been less encouraging. For example the Gartner Group, a research and advisory firm, claim that close to 50 percent of all CRM projects fail to meet expectations (The Australian, 8th July, 2003). Additionally, an InfoWorld survey of chief technology officers (InfoWorld 2001) found that close to 30 percent of chief technology officers said that CRM was one of the most “over hyped” technologies they had seen. A follow up survey of IT executives found that 43 percent of large companies that have deployed CRM still believe that it deserves the bad press (InfoWorld 2003).

In contrast to the above industry survey reports, the recent academic literature appears to confirm that CRM programs enhance firm performance. For instance, in a special section in the Journal of Marketing eight of the ten papers published─conducted in a wide variety of industry settings─came to this conclusion (Boulding et al. 2005). As a whole however, CRM is a neglected area of research where “further efforts to address its mobilization and alignment are not only warranted but desperately needed” (Zablah et al. 2003, p. 116).

One of the problems with the way CRM and performance has been measured is that the term often means different things to different people, creating confusion and uncertainty. For example, in a series of interviews with executives, Payne and Frow (2005) found that to some, CRM meant direct mail, a loyalty scheme, help desk and call centre. Whereas, others envisioned a data warehouse, data mining, e-commerce solution or databases for sales force automation. To alleviate this problem we focus specifically on electronic customer relationship management (eCRM) programs as defined in a SAS Institute white paper (2000): “the creation of knowledge from process automation and the collection, synthesis and delivery of data derived from the Internet and information technology (IT) based interactions between the company and its customers/channel partners.” This definition captures two important aspects of eCRM: (1) IT infrastructure, and (2) e-intelligence capability. Modern IT such as relational databases, data warehousing, data mining and Internet delivery are a feature of eCRM programs that customise and enhance personal relationships with customer and suppliers. However, alone IT is an insufficient source of competitive advantage (Carr 2003). Rather, competitive advantages arise from the interpretation of data or what we refer to as “e-intelligence” in this study.1

Complete Chapter List

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International Advisory Board
Table of Contents
In Lee
Chapter 1
Keith F. Ward, Erik Rolland, Raymond A. Patterson
Proponents of Customer Relationship Management (CRM) suggest that a firm can develop a value creation relationship, such that an increase in... Sample PDF
Managing the Customer Relationship: A Framework for E-CRM Analysis
Chapter 2
Soumaya Ben Letaifa
This chapter examines how e-CRM has affected both organizational and individual behavior in a leading Canadian bank. The innovative and... Sample PDF
A New Conceptual Framework for Greater Success with Integration of E-CRM
Chapter 3
Tim Coltman
Most sectors of industry, commerce, and government have reported variation in the performance payoff from electronic customer relationship... Sample PDF
Managerial Discretion and E-CRM Performance
Chapter 4
Patricia T. Warrington, Elizabeth Gangstad, Richard Feinberg, Ko de Ruyter
Multi-channel retailers that utilize an e-CRM approach stand to benefit in multiple arenas by providing targeted customer service as well as gaining... Sample PDF
Multi-Channel Retailing and Customer Satisfaction: Implications for E-CRM
Chapter 5
Veronica Liljander, Pia Polsa, Kim Forsberg
Not until very recently has mobile phone technology become sophisticated enough to allow more complex customized programs, which enable companies to... Sample PDF
Do Mobile CRM Services Appeal to Loyalty Program Customers?
Chapter 6
Michael Shumanov
While the managerial rationale for adopting customer relationship management (CRM) has been fairly well articulated in the literature, research on... Sample PDF
Developing a Global CRM Strategy
Chapter 7
John Gallaugher
This article synthesizes and leverages two strategic frameworks when analyzing the true nature of strategy and the Internet: (1) the concept of... Sample PDF
Strategic Positioning and Resource-Based Thinking: Cutting Through the Haze of Punditry to Understand Factors Behind Sustainable, Successful Internet Businesses
Chapter 8
Savvas Papagiannidis
This chapter covers the concept of e-business models and how they relate to the music video and television environments. After identifying the value... Sample PDF
A Tale of E-Business Models: From the Music to the Television Industry
Chapter 9
Kirill M. Yurov
Healthcare technology markets have been recently identified as potential investment targets. Having survived a major environmental shock, the... Sample PDF
Strategic Maneuvering in Healthcare Technology Markets: The Case of Emdeon Corporation
Chapter 10
Olli Kuivalainen
The aim of this chapter is to provide a holistic exploration of the development of the business model of a magazine Web site, and of the factors... Sample PDF
Complementary Role of Website in Business Model Development
Chapter 11
Tobias Kollmann is a German B2C platform for different kinds of service and handcraft orders. Based on the concept of reverse auctions, demanders... Sample PDF
A Reverse Auction-Based E-Business Model for B2C Service Markets
Chapter 12
Denis Caro
The 21st century continues to witness the transformation of organizational systems globally through the deployment of Information and Communication... Sample PDF
Evolving E-Health Systems: Symbiotic Constructs Between Corporate and E-Healthcare Worlds in International Space
Chapter 13
Karl Knapp, Sushil K. Sharma, Kevin King
Offshore information technology (IT) outsourcing has been becoming mainstream alternative to inhouse operations. While offshore development is a... Sample PDF
Socio-Economic Impacts of Offshore Outsourcing of Information Technology
Chapter 14
Indrit Troshani
The eXtensible Business Reporting Language (XBRL) is an emerging XML-based standard which has the potential to significantly improve the efficiency... Sample PDF
Towards Theory Development for Emergent E-Business Innovations: Using Convergent Interviewing to Explore the Adoption of XBRL in Australia
Chapter 15
Bill Vassiliadis
Copyright protection is becoming an important issue for organizations that create, use, and distribute digital content through e-commerce channels.... Sample PDF
An Introduction to the Management and Protection of Intellectual Property Rights
Chapter 16
Tagelsir Mohamed Gasmelseid
The unprecedented advancements witnessed in the field of information and communication technology over the last couple of years are significantly... Sample PDF
Intelligent Contracting: An E-Supply Chain Management Perspective
Chapter 17
Jaeki Song, Eric A. Walden
In this work, we examined the boundary of the applicability of network effects theory. We theorized that when adoption is cheap, the cognitive... Sample PDF
The Applicability of Network Effect Theory to Low-Cost Adoption Decisions: An Investigation of Peer-to-Peer File Sharing Technologies
Chapter 18
Wen-Jang Jih
Two mutually reinforcing forces currently are at work to propel an upward spiraling in the business arena. As wireless communication technology... Sample PDF
An Empirical Analysis of Cellular Phone Users' Convenience Perception and Its Impact on Shopping Intention in Mobile Commerce
Chapter 19
Fang He
Along with the exponential increase in online business transactions, the online payment system has gained in popularity because vendors and... Sample PDF
The Effects of System Features, Perceived Risk and Benefit, and Customer Characteristics on Online Bill Paying
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