Publication Type
Journal Article
Version
acceptedVersion
Publication Date
3-2013
Abstract
CRM refers to processes that involve interaction with end-users or customers. The increased emphasis on CRM today stems from changes in the business environment, availability of large amounts of data and advances in information technology.Outsourcing of customer relationship management (CRM) processes is rapidly becoming a competitive imperative for firms. However, there is little evidence on why the performance implications of outsourcing CRM processes differ so much across firms. In this study, the authors examine the impact of CRM outsourcing on shareholder value. The authors draw on insights from agency theory and the resource-based view of the firm in an international context and test hypotheses on a sample of 158CRM outsourcing announcements between 1996 and 2006. On average, CRM outsourcing erodes shareholder value of theoutsourcing firm. More importantly, the authors find that the performance implications of CRM outsourcing are contingent on the type of process involved, firm capabilities, and economic and cultural distance to the vendor. CRM outsourcing is much more beneficial to firms that are high on IT capabilities than to firms that are low on IT capabilities. In contrast, CRMoutsourcing is more beneficial to firms that are low on marketing capabilities than firms characterized by marketing excellence. As the economic distance between the firm and vendor increases, shareholder value of the outsourcing firm is increased. However, as the cultural distance between the firm and vendor increases, shareholder value of the outsourcing firm in reduced. In addition, the type of CRM process outsourced significantly moderates the effects of firm capabilities and vendor cultural distance on shareholder value.
Keywords
outsourcing, customer relationship management, shareholder value, resource based view
Discipline
Management Information Systems | Marketing
Research Areas
Marketing
Publication
Management Science
Volume
59
Issue
3
First Page
748
Last Page
769
ISSN
0025-1909
Identifier
10.1287/mnsc.1120.1565
Publisher
INFORMS
Citation
Kartik, Kalaignanam; Kushwaha, Tarun; Steenkamp, Jan-Benedict E. M.; and TULI, Kapil R..
The Effect of CRM Outsourcing on Shareholder Value: A Contingency Perspective. (2013). Management Science. 59, (3), 748-769.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/3218
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1287/mnsc.1120.1565