does organisational culture influence crm's financial outcomes?

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Does organisational culture influenceCRM's financial outcomes?Reiny Iriana a , Francis Buttle b & Lawrence Ang ca University of Newcastle, New South Wales, Australiab Macquarie Graduate School of Management, New South Wales,Australiac Macquarie University, New South Wales, AustraliaVersion of record first published: 28 Mar 2013.

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Journal of Marketing Management, 2013http://dx.doi.org/10.1080/0267257X.2012.732598

Does organisational culture influence CRM’sfinancial outcomes?

Reiny Iriana, University of Newcastle, New South Wales, AustraliaFrancis Buttle, Macquarie Graduate School of Management,New South Wales, Australia

Lawrence Ang, Macquarie University, New South Wales, Australia

Abstract Our survey of respondents in 99 organisations with a customerrelationship management (CRM) system finds that organisational culture issignificantly related to the achievement of desirable CRM outcomes, as indicatedby an index composed of a number of financial metrics. Most notable is the strongassociation between adhocracy and hierarchy cultures and CRM success. This isthe first empirical study that has investigated whether organisational culture, asmeasured using the Competing Values Model, has a main effect on CRM success.The study also considers the influence of a number of moderating conditions onCRM success. No moderating effects are found. We conclude that organisationswith an appropriate organisational culture are more likely to enjoy financiallydesirable CRM outcomes.

Keywords customer relationship management; CRM; organisational culture;competing values model; adhocracy

Introduction

In recent years, customer relationship management (CRM) has become more widelyaccepted as an important management domain. Investments in CRM solutions –including the software, hardware, and services used to support front office functionsof marketing, selling, and service – have become more commonplace (eMarketer,2005). Bain and Company’s global survey has ranked CRM as one of the top10 tools used by managers (Rigby, 2003; Rigby & Bilodeau, 2005), and GartnerInc., the technology analyst company, estimated that spending on CRM technologyapplications would reach an all-time high of US$13.3 billion per annum by 2012(Gartner, 2008a). However, the number of failed CRM technology implementationsis reported to be between 29% and 71% (AMR Research, 2007; CGEY, 2002;Gartner, 2008b; LaValle & Scheld, 2004; Lee, 2000; Sims, 2006). Equally disturbing,even when organisations introduce CRM as a strategy rather than simply as atechnology roll out, failures are still reported (Finnegan & Currie, 2010). With suchhigh failure rates, Ahearne, Rapp, Mariadoss, and Ganesan (2012) observe ‘many

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2 Journal of Marketing Management, Volume 00

organisations are finding it hard to realize financial performance gains from CRM’(p. 117).

CRM outcomes are greatly influenced by the interplay between people, processes,and technologies. In this regard, CRM can be defined as ‘the core business strategythat integrates internal processes and functions, and external networks to createand deliver value to targeted customers at a profit. It is grounded on high-qualitycustomer-related data and enabled by IT’ (Buttle, 2009).

People are involved in every stage of a CRM technology investment, from planningto piloting, roll out, and, ultimately, everyday use. A number of people issues havebeen identified as influencing the success of CRM programs, for example seniormanagement’s leadership during technology implementation, people’s readiness tosupport the initiative, and their willingness to share customer-related data acrossorganisational silos (Iriana & Buttle, 2004). Successful CRM deployments have alsobeen linked to an organisation’s ability to identify and respond to potential barriersin organisational culture. We have been able to identify only one academic studythat has directly investigated the association between organisational culture andCRM performance – Van Bentum and Stone (2005)’s small-scale survey study of10 organisations. Using Goffee and Jones’s (1996) model of organisational cultureto anchor their analysis, they concluded: ‘without an appropriate organisationalculture, CRM will not succeed’ (p. 29). Several survey-based consultancy reports arealso indicative of the importance of organisational culture in CRM implementation.McKinsey & Company report that 59% of those companies who claim a successfulCRM implementation had addressed the cultural changes required during theimplementation, whereas only 33% of those reporting a failed CRM implementationhad made the necessary cultural changes (cited in Agarwal, Harding, & Schumacher,2004). One example of suboptimal organisational behaviour is the propensity of salespeople to resist making customer knowledge available to colleagues. This behaviouris the cultural norm in some organisations and poses a threat to CRM’s financialsuccess (CGEY, 2002)

Whereas there is no comprehensive study of the association betweenorganisational culture and CRM’s financial performance, other than van Bentumand Stone (2005)’s small-scale study, a number of academic studies investigate thelinks between CRM outcomes and particular forms or elements of organisationalculture. Chang, Park, and Chiay (2010) find that customer-centric organisations aremore likely to use CRM technologies, but that CRM’s influence on organisationaloutcomes is moderated by the organisation’s marketing capability. Curry andKkolou (2004) have identified customer focus, participation, and teamwork asimportant cultural issues influencing the degree to which CRM generates desiredfinancial outcomes. Starkey and Woodcock (2002) report that organisations that failto perform customer-focused behaviours such as recording all customer contactsacross silos are more likely to have poor customer management performance. Thecontribution of cross-functional teams focusing on the customer to the creation ofthe deep customer-related knowledge on which CRM is based has also been noted(Campbell, 2003; Wilson, Daniel, & McDonald, 2002). An appropriate rewardstructure is cited as a key success factor in the development of that deeper insight(Campbell, 2003). Starkey and Woodcock (2002) agree that managers who arefocused on short-term targets or are rewarded for achieving quarterly sales targetsmay undermine the longer-term journey towards a successful CRM implementation.Employee support and commitment across customer-facing departments has beenassociated with the achievement of desired CRM financial outcomes (Kristoffersen

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Iriana et al. Does organisational culture influence CRM’s financial outcomes? 3

& Singh, 2004; Wilson et al., 2002). Reinartz and Chugh (2003) suggest thatgiving employees control over customer service and ensuring job security contributeto CRM success. Rapp, Trainor, and Agnihotri (2010) suggest that a numberof human resource considerations, aligned with technology, business processes,and a relationship-focused strategy, are directly associated with an organisation’sability to maintain durable customer relationships. Among those human resourceconsiderations are top management clearly showing their involvement in and supportfor technology initiatives, a history of openly embracing new technologies, andemployees’ willingness to accept change readily.

Although these reports and studies suggest some awareness of organisationalculture’s influence on CRM’s performance, until now there have been no empiricalstudies assessing the strength of any association between organisational culture andCRM financial outcomes. This research is important because CRM investmentsare often simply portrayed as technology implementations, implying that if thetechnology suits the task, good results will flow. However, as noted above, people areinvolved in every stage of a CRM investment, and therefore organisational culturemay have a significant impact on CRM’s performance. Indeed, organisational culturemay be a risk factor that needs to be managed when CRM is deployed.

Thus the main aim of this study is to identify whether organisational cultureis significantly associated with CRM’s financial outcomes, and if so, to highlightthe influential cultural forms and dimensions. Our principal research question istherefore focused on identifying whether organisational culture has a main effectof financial performance. Thus:

RQ1: Is there a relationship between organisational culture and CRM financialoutcomes?

If we are able to establish a main effect, we propose to investigate whether therelationship is moderated by environmental or technology-related conditions. Hence,our secondary research question:

RQ2: Is the relationship between organisational culture and CRM’s financialoutcomes moderated by the innovative characteristics of the CRM technologyor by the environmental characteristics of the served market?

Figure 1 illustrates the research framework and contains proposed relationshipsthat are examined empirically.

In the following section, we discuss the major components of this framework,including organisational culture, CRM financial outcomes, and the moderatorvariables. Then we present our hypotheses. Thereafter, we explain the researchmethodology. Last, we discuss the results, contributions to knowledge, implicationsfor theory and management practice, limitations, and opportunities for furtherresearch.

The competing values model

There are a number of models that purport to measure organisational culture,including the Organisational Culture Inventory (Cooke & Lafferty, 1989), theOrganisational Culture Profile (O’Reilly, Chatman, & Caldwell, 1991), the

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Figure 1 Research model.

OrganisationalCulture

• Clan

• Hierarchy

• Adhocracy

• Market

Innovative Characteristics• Technical Compatibility • Perceived Ease of Use

Environmental Characteristics • Market Turbulence • Competitive Intensity

CRMFinancialOutcomes

• Average revenueper customer

• Share of wallet

• Average profitper customer

Six-Dimensional Model (Hofstede, Neuijen, Ohayv, & Sanders, 1990), theSociability-Solidarity model (Goffee & Jones, 1996), and the Competing ValuesModel (CVM), also known as the Competing Values Framework (Cameron & Quinn,1999). The CVM has been validated and successfully used to assess organisationalculture in a significant number of widely cited marketing studies (Deshpandé &Farley, 1999), as well as in research into technological opportunism (Srinivasan,Lilien, & Rangaswamy, 2002) and IT implementation (Stock & McDermott, 2000).Although the CVM had originally been developed and validated in the United States(Howard, 1998; Quinn & Spreitzer, 1991), it has also been validated for use in theparticular geographic context of our study – Australia (Jones, Jimmieson, & Griffiths,2005; Lamond, 2003; Parker & Bradley, 2000). In all these applications, good scalereliabilities were achieved (Cronbach’s α > .69). For these reasons, we elected to usethe CVM in our research.

The CVM, presented in Figure 2, identifies four quadrants, each of which ischaracterised by a different combination of indicators. The CVM was first developedby Quinn and Rohrbaugh (1983) in their analysis of organisational effectiveness,and was adopted by Cameron and Ettington (1988) for their investigation oforganisational culture. The model is named the CVM because each continuumis anchored by opposite or competing assumptions. One axis opposes organicand mechanistic attributes; the other opposes internal maintenance and external

Figure 2 The competing values model.

Source: Cameron and Quinn (1999)

Flexibility and Discretion

InternalFocusand

Integration

External Focusand

Differentiation

Stability and Control

Clan Adhocracy

MarketHierarchy

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positioning. According to the model, an organisation can be characterised by itstendency towards flexibility and discretion (organic) as opposed to stability andcontrol (mechanistic), and by its tendency towards internal focus and integrationas opposed to external focus and differentiation. These tendencies are reflectedin differences in the organisation’s dominant characteristics, leadership style,how employees are treated, the bonds that holds the organisation together,strategic emphasis, and criteria for success. So, whilst we investigate the relativelysimple question of whether there is a main effect of organisational culture onCRM outcomes, organisational culture is itself a complex phenomenon that‘encompasses the taken-for-granted values, underlying assumptions, expectations,collective memories and definitions present in an organisation’ (Cameron & Quinn,2006, p. 16). It is common for organisations to exhibit characteristics of all fourcultures, though one culture tends to dominate. Each quadrant of the CVM is labelledaccording to its dominant characteristic. The four cultures – hierarchy, clan, market,and adhocracy – are described in Appendix 1. The Organisational Culture AssessmentInstrument (OCAI) (Cameron & Quinn, 1999) provides an inventory of items tomeasure the cultural constructs embodied in the CVM.

CRM financial outcomes

CRM investments are, of course, made to secure some desired business benefits.Payne (2006), for example, suggests that ‘from a strategic perspective, [CRM is]concerned with how the organisation can create increase shareholder value throughdeveloping superior customer relationships’ (p. 20). Gartner Inc., the technologyanalyst company, drills deeper in identifying three main clusters of desired outcomes:enhancing customer satisfaction or loyalty, growing revenues, or decreasing costs(Gartner, 2009). J.O. Chen (2005) and Kimiloglu and Zarah (2009) have suggestedthat a CRM balanced scorecard, based upon Kaplan and Norton’s (1992) work,can be used to measure the organisation-wide impacts of CRM programs. In theirview, CRM outcomes can be captured by a multidimensional set of people, process,customer, and financial metrics. For example, metrics might suggest that people whoare well trained in the marketing campaign module of a CRM application mightbe expected to run a greater number of marketing campaigns that result in higherprofit-per-customer and improved business profitability. We adopted this balancedscorecard approach, asking our respondents to report CRM outcomes in terms ofa basket of 16 financial, customer, process, and people metrics. This broad-basedapproach allowed all respondents to identify the metrics that were relevant to theirparticular context. Because the focus in this analysis is on financial outcomes only,we constructed an index from three financial indicators that were common to ourentire sample – average revenue per customer, share of customer wallet, and averageprofit per customer. These three metrics are widely used to evaluate CRM’s financialoutcomes (J.O. Chen, 2005; Greenberg, 2010; Kimiloglu & Zarah, 2009).

Literature review and research hypotheses

Organisational culture and CRM’s financial outcomes

Each of the four types of organisational culture identified in the CVM has aunique blend of characteristics. From previous empirical studies, we know that

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adhocracy and market cultures are more strongly associated with excellent businessperformance than their opposites, hierarchy and clan cultures (Deshpandé, Farley,& Webster, 1993; Slater, Olson, & Finnegan, 2010). Deshpandé et al. (1993)report that ‘relatively open, externally oriented organisational cultures relatedto better performance, while relatively closed, internally oriented organizationalcultures related to poorer performance’ (p. 18). Leisen, Lilly, and Winsor (2002)found that market, hierarchy, and adhocracy cultures were more strongly associatedwith market effectiveness than clan culture. Adhocracy culture is also positivelyassociated with an organisation’s capability to take advantage of new technologies,while hierarchy culture is negatively associated with technological opportunism(Srinivasan et al., 2002). Adhocracy is also the culture most strongly associatedwith total quality management (TQM) success, whereas market culture is negativelyassociated with TQM success (Dellana & Hauser, 1999). Adhocracy culture isthe organisational culture most strongly associated with strong business-to-businessrelationships (Paulin, Ferguson, & Salazar, 1999).

An organisational environment that promotes an atmosphere of risk taking cancreate a sense of confidence that permits employees to act in the best interests ofcustomers (Galbreath & Rogers, 1999). It is also widely acknowledged that topmanagement’s involvement in and commitment to CRM is necessary for employeebuy-in and behavioural change (I.J. Chen & Popovich, 2003; Hansotia, 2002; Kale,2004). It is also claimed that a CRM leaders must ensure that the voice of thecustomer is heard, and stimulate an atmosphere of innovation that encouragesemployees to solve problems (Galbreath & Rogers, 1999), ultimately generatingbetter financial outcomes. Thus adhocracy culture, in which people value risk takingand are committed to innovation, may be most strongly associated with the best CRMfinancial outcomes. This is reflected in our first hypothesis.

H1: Among the four organisational culture types, adhocracy culture has the highestpositive association with CRM financial outcomes.

Moderating influence of CRM innovative characteristics

Even if organisational culture does play an important role in determining CRMfinancial outcomes, we’d still expect technology to be influential. For example, iftechnological attributes such as screen flow and script prompts make it easier foran agent in a call centre to solve a customer problem, then we’d expect customerexperience to be better, the customer to be retained, and the share of customer walletto grow. Therefore, the following sections discuss the innovative characteristics ofCRM technologies, and present specific hypotheses relating to the moderating effectsof ease of use and technical compatibility of the CRM system.

Innovative characteristics of the CRM system

Our additional hypotheses are concerned with the moderating impact of anumber of variables on CRM’s financial outcomes. CRM can be considered asan innovation because new technologies are implemented to create stronger, moreprofitable relationships with customers (Pullig, Maxham, & Hair, 2002). These newtechnologies are typically associated with reinvented customer management processes

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across sales, marketing and customer service functions, and retraining the users of thenew CRM technologies (Buttle, 2009). Three constructs from Innovation DiffusionTheory (IDT; Rogers, 1983) – compatibility, complexity, and relative advantage– have been shown to be the three innovation attributes most consistently andsignificantly associated with innovation adoption (Tornatzky & Klein, 1982). Manystudies on technology acceptance and usage have used the Technology AcceptanceModel (TAM; Davis, 1989). The TAM employs similar constructs to IDT, forexample ‘perceived ease of use’ is equivalent to ‘complexity’ (Moore & Benbasat,1991).

Two previous studies have positioned CRM technology as a moderator betweenCRM processes and CRM performance. In Jayachandran, Sharma, Kaufman,and Raman’s (2005) study, the use of CRM technology positively moderatesthe relationship between CRM processes and CRM performance. However, inReinartz, Krafft, and Hoyer’s (2004) study, CRM technology does not moderatethe relationship between CRM processes and business performance. An application’suser-friendliness and flexibility are important attributes in selecting CRM software(Reinartz & Chugh, 2003; Roh, Ahn, & Han, 2005). We therefore examine themoderating role of two technology-related attributes on CRM’s financial outcomes:the perceived ease of using the CRM system and the compatibility of the CRM systemwith existing organisational technologies.

Perceived ease of use

Perceived ease of use, according to Davis (1989), is ‘the degree to which a personbelieves that using a particular system would be free of effort’ (p. 320). A number ofresearchers have investigated the adoption and successful application of Sales ForceAutomation (SFA) software. SFA, a widely adopted CRM module, is used to improvesalesperson productivity and company performance (Engle & Barnes, 2000; Pulliget al., 2002). SFA is one of CRM suites’ three core modules; the others are marketingautomation and service automation. SFA adoption or acceptance by salespeople isan important factor in achieving successful outcomes from an SFA implementation(Morgan & Inks, 2001; Speier & Venkatesh, 2002). Researchers have identifiedperceived ease of use as an important consideration in the salesperson’s adoptionand use of SFA technology. Several studies show that the perceived ease of use ofan SFA system leads to a positive attitude towards the new system, and influencesthe salesperson’s intention to use the technology (Avlonitis & Panagopoulos, 2005;Jones, Sundaram, & Chin, 2002; Robinson, Marshall, & Stamps, 2005; Schillewaert,Ahearne, Frambach, & Moenaert, 2005). Buttle, Ang, and Iriana’s (2006) review ofthe entire SFA literature concludes that salesperson adoption of and intention touse SFA software is highly dependent upon the software’s perceived ease of use.Collectively, these findings suggest that when a CRM system is perceived as easy touse, an organisation may achieve good CRM financial outcomes.

However, there are no studies that investigate whether the perceived ease ofuse of the CRM system moderates the relationship between organisational cultureand financial outcomes. If organisational culture is shown to have an importantinfluence on CRM’s financial outcomes, we suggest that CRM technology that iseasy to use would render the influence of organisational culture less important.In other words, the easier it is to use the CRM technology, the more likely it is

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that the effects of organisational culture on CRM’s financial outcomes dissipate andweaken. In effect, easy-to-use CRM technology makes organisational culture lessimportant in delivering good financial outcomes. On the other hand, if the CRMtechnology is perceived as difficult to use, then the organisational culture will playa more important role in achieving good CRM financial outcomes. In other words,we expect to find an interaction between organisational culture and the ease of useof the CRM technology. However, because there is no body of knowledge on whichto derive hypotheses on the interactions between particular forms of organisationalculture and perceived ease of use, we test for interactions in all culture types.Thus:

H2: Perceived ease of use of the CRM system has a negative moderating influence onthe relationship between organisational culture and CRM financial outcomes.

Technical compatibility

Technical compatibility refers to an innovation’s ‘compatibility with existing systems’(Premkumar, Ramamurthy, & Nilakanta, 1994, p. 163). Compatibility with existinghardware and software has been identified as a potential barrier to the successfulimplementation of innovations such as enterprise resource planning (ERP) systems,business-to-business e-commerce, and electronic data interchange (EDI) (Bradford& Florin, 2003; Claycomb, Iyer, & Germain, 2005; Premkumar et al., 1994;Ramamurthy, Premkumar, & Crum, 1999). When new CRM technologies areincompatible with existing systems, an organisation may enjoy reduced CRM success.Higher compatibility leads to improved user satisfaction and may promote greatersuccess of the implementation (Premkumar et al., 1994). In contrast, when the CRMtechnologies are not compatible with existing systems, an organisation may faceconsiderable challenges and expense before benefits are experienced.

As with perceived ease of use, there are no studies examining whether technicalcompatibility moderates the relationship between organisational culture and financialoutcomes. However, we suggest that the closer the similarity of the new CRMtechnology to existing technologies, the less organisational culture will contributeto good CRM financial outcomes. For example, if a company were to introducean iPad version of an existing desktop CRM system, we’d expect users to masterthe technology quickly, and organisational culture to be a less significant influenceon CRM financial outcomes. However, when the technologies are incompatible,as when users who have had long experience of using an old-school, code-basedcustomer management system are adopting a new Windows-based, menu-and-mouseCRM system, we’d expect the beneficial influence of organisational culture to beevident, despite the new technology’s incompatibility. In other words, we expect tofind an interaction between organisational culture and the technical compatibility ofthe CRM application and existing technologies. However, because there is no bodyof knowledge on which to derive hypotheses on the interactions between particularforms of organisational culture and technical compatibility, we test for interactionsin all culture types.

H3: Technical compatibility of the CRM system has a negative moderating influence onthe relationship between organisational culture and CRM financial outcomes.

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Moderating influence of environment characteristics and market conditions

In addition to the innovative characteristics of CRM system, we also anticipate thatexogenous factors in the organisation’s operating environment might conceivablymoderate the influence of organisational culture on CRM’s financial outcomes. Thatis, environmental or market conditions in combination with organisational cultureaffect CRM’s financial outcomes. For example, if an organisation operates in ahighly competitive market with many emergent competitors and many new products,we’d expect that organisation’s share of wallet to be lower as customers sample orswitch to new products and services that seems to offer more innovative solutions totheir problems. Therefore, the following sections discuss these exogenous conditionsand, in particular, competitive intensity and market turbulence before presentingadditional hypotheses.

Environmental characteristics and market conditions

Several researchers have investigated whether and how environmental characteristicsimpact on organisational change or business performance. Miller (1987) identifiedthree main environmental characteristics most commonly faced by organisationsin implementing business strategy: dynamism, heterogeneity, and hostility. Jaworskiand Kohli (1993) and Kohli and Jaworski (1990) have studied how environmentalcharacteristics moderate the relationship between market orientation and businessperformance. They developed measures for three environmental moderators: marketturbulence, competitive intensity, and technological turbulence. In their investigationof the relationship between market orientation and business performance, Slater andNarver (1994) highlighted the similarity between the environmental characteristicsnamed by Miller (1987) and those measured by Jaworski and Kohli (1993) and Kohliand Jaworski (1990). Jaworski and Kohli’s (1993) definitions of market turbulence,technological turbulence, and competitive intensity are very similar to Miller’s(1987) notions of heterogeneity, dynamism, and hostility. In our study, competitiveintensity (hostility) and market turbulence (heterogeneity) are treated as variables thatmight moderate the relationship between organisational culture and CRM’s financialoutcomes.

Competitive intensity

In the absence of strong competition, an organisation may still achieve good financialoutcomes from its CRM investments even if it does not have a facilitative typeof organisational culture, such as one that produces the goods and services thatcustomers want. In contrast, in a highly competitive environment, customers havemany alternatives to fulfil their wants. Organisations operating in highly competitiveenvironments constantly need to develop new or improved products and services inorder to remain viable. Indeed, this competitive pressure could be a significant reasonfor investing in CRM, particularly if CRM is viewed as an asset that enables theorganisation to become more customer-centric (Chang et al., 2010). Organisationsoperating in highly competitive environments are more pressured to take advantageof the capability of their CRM system to help them win and keep customers (Mack,Mayo, & Khare, 2005; Xu, Yen, Lin, & Chou, 2002). We therefore hypothesisethat having an organisational culture that enables good financial returns from CRM

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investments is more important when competition is intense; that is, an interactiveeffect is expected. However, because there is no previous research from which toderive hypotheses on the interactions between particular forms of organisationalculture and competitive intensity, we test for interactions in all culture types.Thus:

H4: Competitive intensity has a positive moderating influence on the relationshipbetween organisational culture and CRM financial outcomes.

Market turbulence

Environmental turbulence indicates the need for an organisation to be more willingto change its strategies, structure, process, and culture (Armenakis, Harris, &Mossholder, 1993; Chonko, Jones, Roberts, & Dubinski, 2003; Rapp et al., 2010).In a turbulent market, customers’ needs and preferences are constantly changing,and organisations must be more prepared to undergo internal change in orderto stay relevant. Willingness to accept organisational change is strongly associatedwith a higher probability of change success (Armenakis et al., 1993). Employeeswho work for organisations that survive in turbulent markets may perceive theirorganisation as more flexible and able to change. We expect that organisationsoperating in more turbulent markets will benefit from attributes of organisationalculture such as adaptability (Cameron & Quinn, 2006). In other words, as theexternal environment becomes more turbulent, organisational culture will play amore important role in influencing CRM’s financial outcomes; we therefore expectto find an interaction effect between environmental turbulence and organisationalculture. Thus we hypothesise that organisational culture that is more conducive toCRM success is more important in a turbulent market environment. However, sinceno research has shown which specific culture type will be more conductive to CRMfinancial success, we test for interaction effects in all culture types. Thus:

H5: Market turbulence has a positive moderating influence on the relationship betweenorganisational culture and CRM financial outcomes.

Our five hypotheses are summarised in Figure 3.

Figure 3 The five hypotheses.

H1 CRM FinancialOutcomes

Organisational culture:• Clan • Hierarchy• Adhocracy• Market H4 H5

H3H2

Technicalcompatibility

Perceived easeof use

Market turbulence

Competitiveintensity

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Research methodology

Data collection

Our goal is to gain a broad understanding of the impact of organisational cultureon CRM’s financial outcomes, rather than investigating particular organisations indepth. Survey research is an appropriate method to test the research hypotheses.

Invitations to participate were sent to named individuals in 1449 publicand private sector organisations. The list, which included individuals holdingmanagement positions in sales, marketing, customer service, and informationtechnology in all 11 Standard Industrial Classification (SIC) segments, was obtainedfrom Dun and Bradstreet Information Services. Random stratified sampling wasdeployed, with strata based on SIC code and annual revenues, the final sample of1449 being a subset of the 38,000 organisations in the Dun and Bradstreet database.We followed up the invitations with a six-page questionnaire, cover letter, and reply-paid envelope. The questionnaire contained questions on organisational culture,CRM outcomes, CRM system ease of use, CRM system compatibility, competitiveintensity, and market turbulence. Relevant items from the instrument are shown inAppendix 2.

A second reminder by surface mail and follow-up phone calls were madeto encourage participation. A total of 134 questionnaires were returned (9.25%response rate). After removing responses from companies that had no CRM in placeand public sector organisations, a total of 99 questionnaires remained that wereusable. The large initial sample size had been chosen in anticipation of a low responserate. Only organisations that had invested in CRM were eligible to participate in thesurvey.

Respondents were classified using the major categories of the SIC. The largestgroup (18%) of respondents is involved in manufacturing. The other three largegroups of respondents operate in finance and insurance (12%), construction (10%),and communication services (10%). All other industry categories contain fewerthan 10% of respondents. Almost 65% of respondents work for organisationshaving 200 or more full-time equivalent employees. Many (63%) respondentshave an annual revenue above A$100 million. The majority (60%) of respondentshad implemented CRM as least two years before data collection. Almost 75%of respondents have fewer than 100 employees using the CRM application. Themajority (69%) of respondents hold senior management positions, with almost 71%of respondents having worked in the sampled organisation for more than three years;56% of respondents are between 24 and 44 years old, with 89% of respondentsbetween 24 and 44 years holding managerial positions.

Reliability and validity analysis

The nature of the data and the research hypotheses dictate a sequential setof statistical analyses. First, it was necessary to test for reliability, validity, andnon-response bias. Next, path analysis in partial least squares path modeling (PLSPM)is used to analyse the associations between organisational culture and CRM financialoutcomes. PLS combines features from principal component analysis and multipleregression (Abdi, 2007) and provides an attractive alternative model to structuralequation modeling (SEM) where there are fewer observations (Jöreskog & Wold,

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1982). Hierarchical multiple regression was used to test the moderator variablehypotheses (H2 to H5).

Results

Reliability and validity

Table 1 shows the final set of variables for all the constructs. They all exhibit goodreliabilities (Cronbach’s α ≥ .69).

This suggests that the constructs are adequate and amenable to further analysis.However, a more stringent test is to determine the discriminant validity of aconstruct. Discriminant validity of a construct is achieved if all the squared

Table 1 Item loadings and reliability test results.

Constructs Items LoadingsCronbach’s

α

Compositereliability

Clan culture Participative decision making .858 .859 .902Positive interpersonal climate .851Consensual decision making .862Employees feel they belong .767

Adhocracyculture

Innovation is stressed .674 .828 .885A high-potential organisation .881Creative insights stressed .832A growing, dynamic system .845

Hierarchyculture

Work coordinated, under control .806 .776 .855Rules guide work .838Stable work environment .609Quantification work climate .821

Market culture Goals are easily understood .719 .733 .829Intense work effort .681Easy to explain objectives .719Strive for greateraccomplishment

.838

Financialoutcomes

Average revenue per customer .865 .699 .835Share of customer wallet .662Average profit per customer .843

Ease of use Employees interact with CRM .824 .842 .914Employees can get CRM to dowhat they want

.987

Compatibility Compatible with legacy software .825 .818 .911Compatible with legacy hardware .976

Competitiveintensity

Competition is cut-throat .804 .723 .844Many promotion wars .770Competitors make new moves .825

Marketturbulence

Customers prefer change .771 .711 .847Customers look for new products .958

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correlations (R2) between the construct and other constructs in the model are lessthan the average variance extracted (AVE, i.e. the average variance shared betweena construct and its measures; Fornell & Larcker, 1981). As shown in Table 2,discriminant validity is achieved for all constructs used in this study. Non-responsebias was checked by comparing early respondents with those who responded latehaving received a final reminder. T-tests show no significant non-response biasbetween the samples for all variables except for market culture.

Hypothesis testing

Testing H1

The research hypotheses were tested using PLS path modelling with SMARTPLSsoftware. The results in Table 3 reveal significant relationships between some typesof organisational culture and CRM financial outcomes. Among four organisationalculture types, three are associated with good CRM financial outcomes at the .05 levelof significance: adhocracy, hierarchy, and clan. Adhocracy culture has the strongestpositive association with good CRM financial outcomes. Clan culture has a significantnegative association with good CRM financial outcomes. This model explains nearly25% of the variance for CRM financial outcomes. Thus hypothesis 1 is supported.

Testing H2 to H5

Following Baron and Kenny’s (1986) recommendations, we first test the direct effectsof the hypothesised moderator variables on CRM financial outcomes. We thereforetreat all the hypothesised moderators as direct predictors of the dependent variable,CRM financial outcomes. Table 4 shows the PLS results. Although there is an increasein R2 for this new model compared to the previous model shown in Table 3 (i.e.an increase from .252 to .402), only competitive intensity predicts good financialoutcomes at the .05 significance level.

Next, the interaction terms for each moderating variable are added systematicallyinto the model for each culture. Table 5 shows the PLS results. Although there is anincrease in R2 when the interaction term is tested (i.e. >.402, which is the R2 for therelationship between all predictors and financial outcomes, seen in Table 4), none ofthe interactions is significant at the .05 level. This means there are no moderatingeffects. Hypotheses H2 to H5 are therefore not supported.

This analysis yields three major results. First, adhocracy, hierarchy, and clancultures have a significant association with CRM financial outcomes – adhocracy andhierarchy are positively associated whereas clan is negatively associated (see Table 3).Second, competitive intensity has a direct effect on CRM financial outcomes (seeTable 4). Third, none of the hypothesised moderating effects were supported. Thismeans that four constructs (adhocracy, hierarchy, clan, and competitive intensity) areshown to have a direct impact on CRM financial outcomes.

Conclusions

This is the only paper we are aware of that explicitly examines the impact of differentkinds of organisational culture on CRM financial outcomes. Given these results,

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Table2Discriminantvaliditybetweenconstructs.

R2

Adhocracy

Hierarchy

Market

Clan

Financial

outcom

esEase

CompatibilityCompetitive

intensity

Turbulence

AVE

Adhocracy

1.154

∗∗.403

∗∗.508

∗∗.154

∗∗.062

∗.040

∗.009

.043

∗.660

Hierarchy

.154

∗∗1

.487

∗∗.414

∗∗.113

∗∗.215

∗∗.146

∗∗.002

.006

.599

Market

.403

∗∗.487

∗∗1

.477

∗∗.125

∗∗.195

∗∗.129

∗∗.003

.008

.549

Clan

.508

∗∗.414

∗∗.477

∗∗1

.056

∗∗.161

∗∗.077

∗∗.001

.025

.698

FinancialOutcomes

.154

∗∗.113

∗∗.125

∗∗.056

∗1

.021

.010

.152

∗∗.003

.631

EaseofUse

.062

∗.215

∗∗.195

∗∗.161

∗∗.021

1.105

∗∗.008

.001

.842

Compatibility

.040

∗.146

∗∗.129

∗∗.077

∗∗.010

.105

∗∗1

.018

.003

.830

CompetitiveIntensity

.009

.002

.003

.001

.152

∗∗.008

.018

1.042

∗.643

MarketTurbulence

.043

∗.006

.008

.025

.003

.001

.003

.042

∗1

.738

Note:ThevaluesinTable2showthesquaredcorrelationsbetweeneachvariable.

∗∗Correlationissignificantatthe.01level(two-tailed);∗correlationissignificantatthe.05level(two-tailed).

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Table 3 Impact and contribution of the culture variables to CRM financial outcomes.

R2 = .252 Adhocracy Market Hierarchy ClanCorrelation withfinancial outcomes

.412 .386 .338 .247

Path coefficient .479 .083 .328 −0.359t statistics 3.545∗ .605 2.393∗ 2.502∗

Note: ∗Significant at the .05 level.

Table 4 Impact and contribution of the other predictor variables to CRM financialoutcomes.

R2 = .402 Ease of use CompatibilityCompetitiveintensity Turbulence

Correlation withfinancial outcomes

.170 .088 .400 .076

Path coefficient .079 −.174 .395 −.073t statistics .652 1.487 4.391∗ .779Note: ∗Significant at the .05 level.

we conclude that organisational culture is an important factor in the achievementof good CRM financial outcomes. Two types of organisational culture – adhocracyand hierarchy – contribute positively to CRM financial outcomes while clan culturecontributes negatively. Market culture has no significant association with CRMfinancial outcomes.

Of adhocracy and hierarchy cultures, adhocracy has the highest contributionto good CRM financial outcomes. The word ‘adhocracy’ has its origins in theLatin expression ad hoc, implying something temporary, specialised, and dynamic.According to Cameron and Quinn (1999), adhocracies emerged as an ideal type ofculture when the developed world moved from the industrial age to the informationage. It is, they argue, ‘an organisational form that is most responsive to the hyper-turbulent, ever-accelerating conditions that increasingly typify the organisationalworld of the 21st century’ (p. 43). Adhocracies are dynamic, entrepreneurial, creativeplaces to work. People are prepared to take risks. The leaders themselves areconsidered risk takers and innovators, who believe that the major task of managementis to foster entrepreneurship, creativity, and activity ‘on the edge’. The glue thatholds the organisation together is widespread commitment to experimentation andinnovation. Adhocracies emphasise growth and the acquisition of new resources.Success is associated with new or unique products and services and new ways ofdoing business, whilst the leadership encourages individual initiative and freedomto act in the best interest of stakeholders. These attributes of adhocracies seemprima facie well suited to CRM financial success. Employees who are encouragedto act innovatively to satisfy customers are empowered to build long-term profitablecustomer relationships. Further, innovations such as investment in CRM show thatthe organisation is prepared to change how they do business in order to be successful.This is reflected in the extant research literature. Organisations with adhocracyculture have the strongest positive associations with TQM success (Dellana & Hauser,

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Table 5 Impact and contribution of the moderator variables to CRM financialoutcomes.

R2 = .476Adhocracy ×ease of use

Market × easeof use

Hierarchy ×ease of use

Clan × ease ofuse


.319 .267 .250 .232

Path coefficient .086 .501 −1.247 .140t statistics .074 .289 1.136 .095

Adhocracy ×compatibility

Market ×compatibility

Hierarchy ×compatibility

Clan ×compatibility


.226 .196 .192 .161

Path coefficient −.901 1.190 .764 −.324t statistics .764 .639 .494 .256

Adhocracy ×competitiveintensity

Market ×competitiveintensity

Hierarchy ×competitiveintensity

Clan ×competitiveintensity


.554 .533 .509 .472

Path coefficient .983 .660 −.806 −.255t statistics .818 .552 .665 .187

Adhocracy ×turbulence

Market ×turbulence

Hierarchy ×turbulence

Clan ×turbulence


.259 .211 .235 .118

Path coefficient .427 −.836 .161 −.145t statistics .185 .644 .236 .118

1999), successful business-to-business relationships (Paulin et al., 1999), and thecapability to respond to opportunities provided by new technologies (Srinivasanet al., 2002).

According to Cameron and Quinn (1999), a hierarchy culture provides aformalised and structured place to work. Procedures govern what people do. Theleaders pride themselves on being good coordinators who are efficiency minded.Maintaining a smooth-running organisation is critical – formal rules and policieshold the organisation together. Success is defined in terms of dependable delivery,smooth scheduling, and low cost. An important feature of CRM implementationsis that business rules and processes are formalised before technology is rolled out.Companies that invest in CRM often do so for efficiency gains and to ensurethat customer service, selling, and marketing activity follows approved processes(Gartner, 2009). These processes are embedded in the workflow functionality thatis a core feature of most modern CRM applications. These observations are reflectedin the extant research literature, where hierarchy culture is positively associated withoperational efficiency, marketing information, and strategic orientation (Leisen et al.,2002).

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On the other hand, clan culture has a statistically significant negative impacton CRM financial success. Shared values and goals, cohesion, participation, anda sense of ‘we-ness’ permeate clan organisations. Clans prioritise internal, ratherthan external, stakeholders. The cohesion, morale, and development of employeesare paramount. Success is defined in terms of internal climate and concern foremployees. In most respects, this family-like organisational culture seems inimicalto CRM success. The focus is not on innovation (e.g. in technology) and adaptation(e.g. of products and processes) to win and keep customers but on internal harmony.Traditional structures and paternalistic leadership mean that clans resist change.There is, however, one important attribute of clan cultures that might be expected tobe associated with CRM financial success, and that is teamwork. Clearly, teamworkis, in and of itself, inadequate to drive CRM financial success. Other clan attributesimpede the achievement of CRM financial success.

Market culture, we find, is neither positively nor negatively associated withCRM financial success. According to Cameron and Quinn (2006), the term ‘market’is not synonymous with the marketing function or marketing excellence. Rather,it ‘refers to a type of organisation that functions as a market itself’ (p. 39).Organisations with a dominant market culture are focused on transactions withmainly external stakeholders such as suppliers, customers, contractors, licensees,regulators, investors, and unions. The competitiveness and productivity that is valuedby market culture is based on external positioning and strict cost and managementcontrols. Customer focus, superior return on equity, and dominant market sharepositions are very highly valued by organisations dominated by market culture.Market cultures assume the business environment is hostile and take an aggressiveposition focused on winning. Although H1, which predicts a main effect betweenadhocracy and CRM success, is supported, we are somewhat surprised not to finda positive, though weaker, relationship between market culture and CRM success.Deshpandé et al. (1993) had, after all, found that market cultures delivered thebest business performance in terms of relative profitability, relative size, relativegrowth rate, and relative market share. However, if our sample of organisationsis introducing CRM in order to automate customer-facing processes and to reduceoperating costs, as suggested in our discussion about hierarchy, then the absence ofany positive association between market culture and CRM financial success is notunreasonable. Further, as Deshpandé et al. (1993, p. 32) observe, ‘the best performerswould have a market culture and be both highly customer-oriented and innovative’.Organisations that have market cultures should not be assumed to be either customerfocused or innovative. Finally, market cultures value the price mechanism as anindicator of value, and strive to reduce transaction costs so as to pass on savings tocustomers and/or increase margin. In modern economies, however, economic valuedelivered through low price is neither the only form of customer-perceived valuenor even the most significant form of customer-perceived value in many contexts(Holbrook, 1996).

We also conclude that the perceived ease of using the CRM system and thecompatibility of the CRM system with existing systems are not moderators ofthe strength of the relationship between organisational culture and CRM financialoutcomes. These research findings emphasise the importance of organisationalculture to CRM financial success. Regardless of whether the CRM system is easy touse or compatible with existing systems, having an organisational culture conducive

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to the achievement of good CRM financial outcomes (adhocracy, hierarchy) is stillthe most important driver.

The moderator test results also show that neither competitive intensity nor marketturbulence moderate the strength of the relationship between organisational cultureand CRM financial outcomes. This finding is consistent with those of Jaworski andKohli (1993) and Slater and Narver (1994) who found that competitive intensity andmarket turbulence have little effect on the strength of the market orientation–businessperformance relationship. More recently, Rapp et al. (2010) also found that marketturbulence did not moderate the relationship between customer-linking capabilitiesand organisational financial performance.

One possible explanation for competitive intensity and market turbulence notmoderating the strength of the relationship between organisational culture andCRM financial outcomes is that superior organisations achieve good business resultswhatever the level of competitive intensity or market turbulence (Slater & Narver,1994). A second possible explanation, also proposed by Rapp et al. (2010) is thatthe high costs of CRM investments may diminish any financial advantage that mightaccrue in more turbulent environments. Thus this finding extends the literature bydetermining that the role of organisational culture in CRM system implementationis as important in highly competitive environments and turbulent markets as it is inenvironments with low levels of competition or market turbulence.

Our most surprising finding is that there is a direct association between competitiveintensity (indicated by cut-throat competition, promotion wars, and competitorsmaking many new initiatives) and CRM financial success. Intuitively one wouldexpect that the keener the competition, the higher the marketing expense, the lowerthe margin, and the less exhilarating the financial outcomes. However, it is importantto remember that our index of financial outcomes is a composite of three customer-related financial metrics: average revenue per customer, share-of-wallet, and averageprofit per customer. We suspect that heightened levels of competitive intensitymotivate companies to deploy analytical CRM. Analytical CRM involves the capture,analysis, and deployment of customer-related data to support the organisation’sselling, marketing, and service objectives. As competitors ramp up their marketingspend, businesses that stress analytical CRM can respond by focusing on retainingcurrent customers by better understanding and servicing their needs, and using thecampaign management and trigger marketing functionality in their CRM application.From the customer’s perspective, analytical CRM delivers communications thattypically very tightly targeted, even at the level of the unique customer, and offers thatare timely, relevant, and, in many cases, customised. Consequently, companies withsuccessful analytical CRM implementations may experience lifts in average revenueand profit per customer, and grow their share of customer spend. This finding iscertainly worth further investigation.

Managerial implications

Our results underscore the importance of organisational culture to CRM financialoutcomes. CRM investments are often regarded as IT projects. Our findings stronglyimply that they should also be viewed as change management projects. Achievinggood returns on CRM investments requires management to influence the culture ofthe organisation, so that it becomes more of an adhocracy. This may involve changesin organisational leadership towards one that stresses creativity and innovation,

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and values risk taking. Risk-averse leaders that stress cost control and adherenceto bureaucratic rules are unlikely to support the creation of a culture that deliversgood outcomes from investments in CRM technology. In adhocracies, employeesare encouraged to act innovatively to satisfy customers. They will be empowered tobuild long-term profitable customer relationships, and rewarded for doing so. Thissupports the idea that management should deliver empowerment to the front-lineand design remuneration systems that reward customer satisfaction and retentionperformance. Change may be even more important if the organisation has a clanculture, which we find to be negatively associated with CRM’s financial success.Organisational cultures do evolve over time. In start-ups, culture may reflect thevalues of the business’s founders. As generations of owners, managers, and othersignificant stakeholders come and go, organisational culture is prone to change.It is beyond the scope of this paper to embark on a full discussion of culturechange. We do, however, note that there is a substantial literature on this topic.See, for example, the work of Kotter (1996), Schabracq (2007), and Cameron andQuinn (2006) who discuss change in the context of the CVM. As Barney (1986)noted, ‘Firms that have cultures with the required attributes can obtain sustainedsuperior financial performance’ (p. 656). In our research, CRM’s financial success, asmeasured by an index composed from three metrics – average revenue per customer,share of customer wallet, and average profit per customer – is positively associatedwith adhocracy and hierarchy cultures, and negatively with clan culture.

Limitations and opportunities for future research

Although our results are clearly indicative of the value of a supportive culture to CRMsuccess, several limitations do need to be noted. The first limitation is related to theresearch context. Organisational culture is a shared phenomenon and is reflected inshared practices among members of the organisation. In our study, organisationalculture was assessed by a single source. Single sources are more appropriate whenorganisations have a strong culture (Deal & Kennedy, 1982). The single sourcelimitation is also shared by previous studies on organisational culture in a marketingcontext (Homburg & Pflesser, 2000; Moorman, 1995; White, Varadarajan, & Dacin,2003).

Our second limitation is the diversity in the intensity of CRM deployments inour sampled organisations. It is possible that our data have been collected from, atone end of the scale, companies engaged in relatively small-scale CRM deploymentssuch as a contact management system, and at the other end of the scale, large-scaledeployments of CRM in a 300-seat customer service centre. We did not collectdata about intensity of CRM deployments. This is because our goal was to assess,in the broadest sense, the main effect of organisational culture on CRM’s financialperformance. This is the main thrust of our research. However, we would hypothesisethat organisational culture is more deeply implicated in the more intense CRMdeployments, but we have no way of knowing from our current data set. This iscertainly an opportunity for future research.

The third limitation concerns sample size. We sampled 1449 organisations andreceived 134 responses. Of these, 74%, or 99 organisations, had invested in CRM.Although no other research into the association between organisational culture andCRM outcomes has obtained data from a larger sample, this is still a low response rate– 9.25%. This response rate had been anticipated partly because only organisations

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with a CRM system in place could complete the survey. Although previous studiesinto CRM have reported sample sizes larger than 99, they have not specified thepercentage of the sample that had actually implemented CRM, which may or may nothave been higher than our study. For example, Reinartz et al. (2004) collected datafrom a sample of 211 organisations that had implemented CRM processes, whereasYim, Anderson, and Swaminathan (2004) sampled 215, but we do not know in eithercase what proportion had invested in CRM technology. Jayachandran et al. (2005)received a total of 172 responses, but only 28% of these had implemented a CRMsystem (i.e. only 48 organisations); moreover, only 21 of these provided enoughsurvey data to be entered into their measurement model. Thus we believe that oursample size is comparable to those reported in related research. One disadvantage ofthis sample size is that it constrained our use of more sophisticated statistical analysis.For example, we would have needed a significantly larger data set to deploy SEM;this method, which is prima facie suitable for our research questions, requires at least10 observations for each item (Nunnally, 1967). Sample size also precludes an analysisof joint moderating effects between the innovative characteristics of the CRM systemand the environmental conditions in which organisations operate.

A fourth limitation is associated with non-response bias. No variable, exceptmarket culture, showed evidence of non-response bias. For market culture, the meanvalue for late respondents (6.0 on a seven-point scale) was significantly higher thanthe mean value for earlier respondents (5.5). These results imply our study may haveunder-sampled organisations with a dominant market culture.

Finally, we have not explored in detail the components of organisational culturethat have the greatest impact on CRM’s financial performance. This would requirea more detailed, qualitative investigation of particular organisational contexts, inwhich the influence of mediators such as leadership, data integrity, and processdefinition can be better understood. This could take a dyadic perspective thatseeks to understand CRM’s influence on financial outcomes from both sides of thesupplier–customer dyad.

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Appendix 1. Hierarchy, clan, market, and adhocracy cultures

Hierarchy

The hierarchy culture has a clear organisational structure with standardised rules andprocedures, strict controls, well-defined responsibilities, accountability and decision-makingauthority. Hierarchies are formalised, structured places to work; procedures govern whatpeople do; leaders are good organisers and coordinators. Predictability, stability, and efficiencyare long-term concerns of hierarchies. This culture type is associated with Max Weber’sthinking about bureaucracy that dominated management theory in the 1950s.

Clan

Clans are like extended families. Clans have shared values and goals, cohesion, participation,individuality yet a sense of ‘we-ness’. Clans stress morale, teamwork, consensus, and employeecommitment; leaders are seen as mentors and even as parental figures. Clans are friendly placesto work, and employees share a lot of themselves. The organisation is held together by loyaltyand tradition.

Market

Market cultures are oriented to the external environment rather than internal affairs, andfocus on transactions with external constituencies such as suppliers, customers, contractors,and regulators. Profit, profitability, market share, and stretch targets are primary objectives.Competitiveness and productivity are core values. Market cultures assume the environment tobe hostile and customers to be choosy. Leaders are tough and demanding; the glue that holdsthe organisation together is winning.

Adhocracy

Adhocracies are responses to hyper-turbulent, fast-changing environmental conditions.Uncertainty, ambiguity, and information overload are common. Adhocracies stress innovation,adaptation, and flexibility. Leaders foster entrepreneurship, experimentation, and creativityso as to respond quickly to new opportunities. People stick their necks out and take risks.Adhocracies are dynamic, and success is associated with bringing unique or original productsand services to market.

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Appendix 2. Construct measures and questions

ConstructOrganisational cultureHierarchy culture

• The work process is coordinated and under control• Rules, procedures, and formal methods guide the work• There is a stable, predictable work environment• Quantification and measurement are key parts of the work climateClan culture

• Participative decision making is widely and appropriately employed• There is a positive interpersonal climate• Consensual decision making is encouraged• Employees feel as though they really belong to the organisationMarket culture

• The goals are clearly understood by most members• The work effort is usually intense• It is easy to explain the overall objectives of the organisation• There is a constant striving for greater accomplishmentAdhocracy culture

• Innovation is stressed• Outsiders perceive it as a vibrant, high-potential organisation• Creative insights, hunches, and innovative ideas are stressed• Organisation has the image of a growing, dynamic systemCRM financial outcomes

• Average revenue per customer• Share of customer wallet• Average profit per customerInnovative characteristics of CRM systemPerceived ease of use

• Our employees have a clear understanding of how to interact with the CRM system• It is easy for our employees to get the CRM system to do what they want it to doTechnical compatibility

• The CRM system is compatible with legacy system software• The CRM system is compatible with legacy system hardwareEnvironmental characteristicsCompetitive intensity

• Competition in our industry is cut-throat• There are many ‘promotion wars’ in our industry• One hears of a new competitive move almost every dayMarket turbulence

• In our kind of business, customers’ product preferences change quite a bit over time• Our customers tend to look for new products all the time

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About the authors

Reiny Iriana, PhD, is a researcher for a New South Wales Government body, Sydney, Australia.She also acts as a doctoral thesis supervisor at the Graduate School of Business, the Universityof Newcastle, Australia. Her expertise is in quantitative research in the area of business andmanagement.

E [email protected]

Francis Buttle, PhD, FCIM, has more than 30 years’ experience in marketing and customerrelationship management. He is visiting professor at Macquarie Graduate School ofManagement, Sydney, Australia. He has been a professor of marketing, CRM, and relationshipmarketing at Manchester Business School and Cranfield School of Management. He was theworld’s first professor of CRM. Francis is principal of Francis Buttle & Associates, a worldwidenetwork of customer management experts established in 1979. He has published more than300 items including eight books. His most recent books are an Italian edition of his best-sellerCustomer Relationship Management: Concepts and Technologies and an e-book entitled SocialCRM: What Is It and What Does It Mean for Your Business?

Corresponding author: Professor Francis Buttle, MGSM, 99 Talavera Road, North Ryde,NSW 2109, Australia.

T +61 (0)2 9850 8987E [email protected]

Lawrence Ang, PhD, is associate professor of marketing, Department of Marketing andManagement, Macquarie University, Sydney, Australia. His research interests are customerrelationship management, complaints management, creativity in advertising, neuro-marketing,celebrity endorsement, and social media. He enjoys teaching, consulting, and oenology.In addition to his doctorate, he has a first-class honours degree, and has published 35 refereedjournal articles or conference papers.

E [email protected]

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mailto:[email protected]




does organisational culture influence crm's financial outcomes?

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