Customer Relationship Management (CRM) Practices by Small Businesses in Developing Economies: A Case Study of Egypt

Customer Relationship Management (CRM) Practices by Small Businesses in Developing Economies: A Case Study of Egypt

Hatem El-Gohary (Birmingham City Business School, Birmingham City University, UK & Cairo University Business School, Cairo University, Egypt), David J. Edwards (Birmingham City Business School, Birmingham City University, UK) and Juanling Huang (Birmingham City Business School, Birmingham City University, UK)
DOI: 10.4018/978-1-4666-7357-1.ch055
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Abstract

This study investigates the different factors affecting Customer Relationship Management (CRM) adoption by Egyptian Small Business Enterprises (SBEs). A systematic review of extant literature on CRM adoption by SBEs was conducted both holistically, and specifically in developing countries (e.g. Egypt). The study then progresses to validate a conceptual framework of CRM practices utilising a positivist research philosophy augmented with a quantitative approach, using questionnaire survey data. Findings indicated the response rate of Egyptian SBEs was low and that SBEs' owners, marketing managers and sales managers lack knowledge about CRM practice and the different tools or forms related to it. The findings also illustrated that SBE internal and external factors have a different impact upon CRM adoption. The study provides stakeholders (including entrepreneurs, policy makers, practitioners, researchers and educators) with an invaluable insight and a deeper understanding of issues related to CRM adoption by Egyptian SBEs. This research makes an important contribution to the current dearth of empirical studies in this field. Research outcomes consolidate and clarify several pertinent issues and provide peers with direction for future research.
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Theoretical Background: Crm And Egyptian Sbes

The importance of SBEs is grounded in their inherent ability to generate wealth and create jobs; indeed, they bear the greatest responsibility for employment in the private sector globally. The development of SBEs is recognized as an important factor for the achievement of economic development objectives - including poverty alleviation and the promotion of democratic societies. According to Mulhern (1995), 99% of all European companies are Small and Medium sized Enterprises (SMEs) with less than 10 employees and provides more new jobs than bigger companies. From 1985-1995, SMEs provided 66% of all employment in Europe (ibid). Similar pattern are replicated in Less Developing Countries (LDC’s) with SBEs representing a high percentage of the total number of enterprises. According to the Egyptian Ministry of Trade and Industry - EMTI (2010), SBEs represent a startling 84.42% of the total number of registered enterprises in Egypt. Since SBEs provide an economic engine that drives global development, they have attracted considerable academic attention. Much of this focus derives from the belief that innovation, particularly in the high tech and IT areas, is crucially dependent on the flourishing entrepreneurial sector presented by SBEs.

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