Publication Type

Journal Article

Version

Postprint

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

Copyright Owner and License

Authors

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.

Additional URL

http://dx.doi.org/10.1287/mnsc.1120.1565

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