Customer relationship management and firm performance

Palgrave Macmillan Limited
Publication Type:
Journal Article
Journal of Information Technology, 2011, 26 (3), pp. 205 - 219
Issue Date:
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In this paper, we examine the impact of customer relationship management (CRM) on firm performance using a hieraxdlical construct modeL Following the resource-based view of the firm, strategic CRM is conceptualizect as an endogenously determined function of the organization's ability to harness and orchestrate lawer-order capabilities that comprise physical assets, such as IT infrastructure, and organizational capabilities, such as human analytics (HA) and business architecture (BA). Our resu~s reJeal a positive and significant path between a superior CRM capability and firm performance. In turn, superior CRM capability is positively associated with HA and BA However, our results suggest that the ·rnpact of rr infrastructure on superior CRM capability is indirect and fully mediated by HA and BA We also find that CAM inftiatives jointly emphasizing customer Intimacy and cost reduction outperform those taking a less balanced approach. Overall, this paper helps explain why some CRM programs are more successful than others and what capabilities are required to support success.
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