Examining the Effect of Knowledge Management on CRM Prosperity

Examining the Effect of Knowledge Management on CRM Prosperity

Fakhraddin Maroofi (University of Kurdistan, Iran)
Copyright: © 2015 |Pages: 12
DOI: 10.4018/978-1-4666-5888-2.ch445
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Theoretical Background

CRM Overview

As the, research on CRM has increased significantly over the past few years (Romano & Fjermestad, 2003), but there are still research needs in different areas: search for an explanation or a acknowledged conceptual framework, analysis of its important dimensions, study of CRM impact on business results, obstacle to its prosperous implementation, development of valid and dependable scales to study the degree of implementation and prosperity of empirical studies on the subject (Parvatiyar & Sheth, 2001; Sin, Tse, & Yim, 2005). After examining the literature on the concept of CRM (Plakoyiannaki & Tzokas, 2002), we can say that there is not yet a consensus about a clear conceptual framework of the concept of CRM (Zablah, Bellenger, & Johnston, 2004). Therefore, the concept of CRM, from the literature review, as follows: CRM is a business strategy that goals to found and develop value making relationships with customers based on knowledge. Using IT as an enabler, CRM needs a redesign of the organization and its procedures to direct them to the customer, so that by personalizing its products and services, the firm can satisfy customer needs and thereby create long-term, mutually beneficial, loyalty relationships. At the theoretical level CRM offers multiple advantages, but a large number of studies show a high failure rate in the implementation of this type of strategy (Xu & Walton, 2005). When examining the various causes of these negative results, several authors (Rigby et al., 2002; Starkey & Woodcock, 2002) suggest that one of the main causes of failure is not integrating CRM into the firm’s strategy. Additionally, Sin et al. (2005) argue that there is no integrative conceptual framework that translates the CRM idea into specific organizational activities and direct firms in how to perform the strategy in a prosperous manner. In view of the high failure rate in CRM implementation and of the need to improve understanding of why some initiatives are prosperous while others are not (Roh, Ahn, & Han, 2005), there is a need for an descriptive model for CRM prosperity based on knowledge, including the main variables that determine prosperous implementation of the strategy.

Key Terms in this Chapter

Knowledge Management: Is the process through which organizations generate value from their intellectual and knowledge-based assets. Most often, generating value from such assets involves codifying what employees, partners and customers know, and sharing that information among employees, departments and even with other companies in an effort to devise best practices.

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