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.
outsourcing, customer relationship management, shareholder value, resource based view
Management Information Systems | Marketing
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. Research Collection Lee Kong Chian School Of Business.
Available at: http://ink.library.smu.edu.sg/lkcsb_research/3218
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