CRM and firm performance in a transitional economic environment

: does stages of CRM development matter?

Abstract

Research in firm relationship mainly focuses on the exchange between organizational or industrial partners (e.g., supplier or agency) (e.g., Anderson and Narus 1984), empirical work investigating firm processes in relational efforts with customers is really lacking. There are two different types of consumers, business consumers (Anderson and Weitz 1992) and individual consumers (e.g., Berry 1983). Work on individual customer relationship is even slimmer. Moreover, individual customer relationship is widely studied in service industry (e.g. Gronroos 1981/1982; Berry 1983/1995; Levitt 1983, Grönroos 1991, Bagozzi 1995, Bitner 1995), empirical evidences in manufacturing industry are really scarce. Even for research that addresses the individual customer relationship with the firm, the authors usually examine the firm-customer relationship from a behavioral perspective of the customer (Morgan and Hunt 1994) that mainly focuses on the factors leading to customer satisfaction or loyalty (e.g., Oliver 1999). Little research provides a strategic focus across firms to examine whether relationship management practices associated with individual customers can really affect firm performance. Based on resource-based view and contingency theory, this study conceptualizes customer relationship management from the perspective of the firm and tests different effects of the three CRM processes managing different stages of customer relationship (relationship initiation, maintenance, and termination) on firm performance. It has three main objectives: (1) to test the measures of CRM processes at different relationship stages developed by Reinartz, Krafft, and Hoyer (2004), (2) to test whether and how the implementation degree of different CRM processes (relationship initiation, maintenance, and termination) affects firm performance, (3) to identify some key external and internal factors that might temper the relationship between CRM processes and economic performance. Results suggest that these measurements are suitable for Chinese firms. This study also reveals some unique features of CRM processes for Chinese firms. Theoretically, this study suggests CRM in Chinese firms could be captured by 3 dimensions: relationship initiation, relationship maintenance, and relationship termination. Though not thorough, the results provide evidences that these dimensions do exist in Chinese firms’ marketing activities. This study also demonstrates that CRM is one of the dynamic capabilities that consists of identifiable and specific routines (relationship initiation, relationship maintenance, and relationship termination) and complementarities (cross-functional integration). Our results suggest that the degree to which Chinese firms are engaged in CRM firms is positively associated with company performance in two of the three stages, relationship initiation and relationship termination. Moderated regression tests also show that the moderating effects of cross-functional integration and customer preference uncertainty do exist.

Date of Award	3 Oct 2006
Original language	English
Awarding Institution	City University of Hong Kong
Supervisor	Kwaku ATUAHENE-GIMA (Supervisor)