A critical evaluation of CRM (Customer Relationship Management) Essay Example

how to manage healthy relationships with them, it is important to understand the nature of clients and how to make them happy and satisfied.

Aim

The purpose of this thesis is to critically evaluate Customer Relationship Management strategies. It also aims to examine the difference between the concepts of 'Relationship Marketing' and 'Customer Relationship Marketing'.

Preliminary Review of the Literature

Introduction

Compelling business cases and success stories continue to attract interest and investment in customer relationship management (CRM).

The CRM package market is predicted to grow from $7 billion in 2000 to $23 billion in 2005, despite the fact that currently 30 to 50 percent of CRM enterprises fail to meet company objectives, while another 20 percent actually harm customer relationships (AMR Research 2002). There are numerous challenges, conditions, and circumstances that contribute to the success or failure of a CRM enterprise. Corporate leaders are now seeking ways to reduce the uncertainty surrounding CRM before investing valuable resources into this risky technology innovation. The adoption stage (Rogers, 1995) of a technology-based innovation like CRM is where decision-making and planning activities take place to address "whether, why, and how" to implement the invention (Markus & Tanis, 2000:189). Occurring at the start of a project, the associated problems or flaws of this stage are multiplied and can have a detrimental impact on the resulting innovation process.

Although there is a lack of research on the acceptance issues of determinations made during this stage, they are crucial to the ultimate success or failure of a CRM enterprise (Markus ; Tanis 2000).

In terms of business value, complementarity and alliance play important roles when considering a CRM enterprise. Executives want to understand the impact on organizational

performance, specifically the potential business value. Typically, this is measured using the return on investment (ROI) metric. However, determining the economic value of an innovation, particularly one enabled by technology, has been a significant challenge for researchers and practitioners over several decades.

Recent research on concern value suggests that complementarity is a key factor in determining organizational performance (see Barua and Mukhopadhyay, 2000 for a summary). Complementarity refers to the relationship between two activities or factors, where increasing one leads to an increase in the benefits of the other (Milgrom and Roberts, 1990). Organizational alignment involves the level of agreement between complementary elements, such as people, procedures, and activities.

The text below discusses alignment research and its two basic dimensions: rational and societal. The rational dimension, also known as strategic alliance, focuses on the alignment of organizational scheme, structures, and planning procedures. Positive alignment is achieved when organizational constructions and procedures support the strategy. On the other hand, the societal dimension involves the alignment of organizational culture, stakeholder interactions, and knowledge of each other's work sphere. Positive alignment occurs when stakeholders are knowledgeable about each other's domain areas and engage in collaborative interactions within the organization's norms and values. Additionally, other related research emphasizes the importance of aligning the rational and societal dimensions.

The text presents a theory of systematic organizational alliance, based on general systems theory and pandemonium theory. According to Semler (1997), this theory suggests that scheme, structure, and culture in an organization are complementary and can support the organization's strategy by eliminating internal barriers and promoting cooperation. The theory identifies six aspects of alliance (process, rewards system, values, norms, performance, and environment) that, when in

agreement, should result in positive organizational performance. Since organizational performance is guided by strategy, which is developed by leaders, it is primarily the leaders and their prescribed roles and processes that drive alliance.

Intellectual dimension

Strategy. In a highly competitive global market place, organizations face pressure to reduce costs while also differentiating themselves through improvements in customer service to generate revenues.

The main idea of CRM is that by improving how a company manages its client relationships, both productivity and client satisfaction will increase, ultimately leading to better financial performance. However, it is important for companies not to see CRM as the solution to competitive pressures but rather as a more intricate corporate strategy. The capabilities a company has in relation to its customers are crucial in ensuring customer satisfaction, productivity, and financial performance. Marketing theory suggests that for an organization to be successful, it must devote all its efforts to satisfying customers while also being profitable. This means organizations need to effectively create, deliver, and communicate customer value compared to their competitors.

Market-driven organizations that excel in their field are often described as being customer-centric, customer-focused, or client oriented. According to Day (1999:5), these kinds of organizations possess "a superior ability to understand, attract, and retain valuable customers," and he identifies three specific components of market orientation:

1. An externally-focused organizational culture that emphasizes added value.
2. Distinctive capabilities in market detection, relationship building, and strategic thinking.
3. A structure that allows the entire organization to anticipate and respond to changing customer and market conditions

(pp. 6-7).

Kohli and Jaworski (1990), provide further clarification by defining market orientation as the organization-wide generation of market intelligence, dissemination of the intelligence across departments, and responsiveness to it.

In terms of IT innovations, Kwon and Zmud (1983) find that top management support is a crucial and recurring factor for success. Management support can be understood as "the widespread sponsorship of an innovation." Successful implementation of innovation occurs when top management demonstrates commitment to change (in our context, the CRM initiative) as well as commitment to the CRM implementation effort.

The text emphasizes the importance of support in the successful implementation of an IT project. This support is demonstrated through the allocation of resources such as time and money for employee training, the involvement of key employees throughout the innovation process, and financial investment in technology and long-term implementation efforts. Kwon and Zmud assert that directing sufficient organizational resources towards motivating and sustaining the implementation effort increases the likelihood of success. The literature consistently underscores the significance of having a champion for the innovation project. In order to qualify as a champion, an employee must be highly respected and influential, actively advocating for and promoting the innovation by providing information, material resources, and political support. It is crucial for the same champion to see the project through to completion in order to enhance the chances of success.

In a recent field survey, houses that implemented CRM projects with a dedicated high-ranking leader were twice as likely to report that their project was exceeding expectations (Yu 001). Leadership styles play a crucial role when implementing a new initiative like CRM. Nguyen-Huy (2001) identified four change management

leadership styles, which include:

1. commanding;
2. technology;
3. instruction;
4. socializing; or
5. hybrid.

No one style is inherently better than another. The success of the organization largely depends on the styles that have worked in the past.

Furthermore, change leaders who have achieved success have utilized one style during an initial phase and then transitioned to a different style in a subsequent phase. For instance, at the beginning of a project, it may be crucial to employ an authoritative style to demonstrate that top management is committed and serious about the change. However, during implementation, a more collaborative style may be effectively used. In the realm of CRM, limited research has been conducted on examining the leadership styles used for change management or analyzing the circumstances in which a particular leadership style for change management is likely to be effective.

Structure

The literature on innovation suggests that an organization with a decentralized and flat structure is most likely to support the development of innovative ideas compared to a centralized hierarchical structure. Nevertheless, when it comes to implementing innovation, it has been proven that a centralized structure is most effective. Regarding IT innovation, structural factors are related to how compatible the system is with the organizational design (e.g.

, centralisation, decentralisation, organic) and the authorization hierarchy>, which describes the relationships and similarities. The attempts made in ERP and CRM revolve around concern procedures. An efficient CRM should include and support the concern processes necessary for creating customer experiences.

These processes extend throughout the organization, encompassing the customer-facing procedures of selling, sales, and customer service.

However, there are also back-office concern procedures such as accounting, buying, production, and logistics involved in client relationship management. The importance of integrating client-related knowledge logically cannot be underestimated as it poses a major challenge to organizational preparedness.

Research Questions

1. RQ1. What are the critical issues that need to be discussed in client relationship management initiatives?
2. RQ2. What problems need to be faced during the adoption of CRM initiatives?
3. RQ3. What is the scope of CRM for different types of organizations?
4. RQ4. Is Customer Relations Management appropriate for all types of organizations?

Research Aims

As an emerging subject, CRM requires a significant amount of theoretical support. The area of client relationship management is crucial for:

1. Identifying the main issues of Customer Relationship Management
2. Critically analyzing CRM literature
3. Studying the aspects of client welfare and ensuring long-term retention
       

4. Exploring successful and unsuccessful CRM strategies
       

5. Examining the CRM strategy for Tesco Plc
       

6. Drawing conclusions and making recommendations for the company
   

   < h2 > Research Plan / Methodology
   The research methodology is divided into three parts:
   1) Part One:
   2) Part Two:
   3) Part Three:

   The three stages of methodological analysis, namely the research position, research design, and aggregation of information, collectively provide a clear description of the significance and requirement of research methods.

   Research Perspective
   

   According

to Saunders et al. (2003), selecting an appropriate research position is crucial for conducting effective research. In the case of investigating CRM in the industry, a case study approach is deemed most suitable. This approach allows for a thorough analysis of the research subject and provides essential information for thesis planning.

Implementing the CRM scheme provides a great chance to assess the company's efficiency. This case study approach covers different areas including subject identification, information processing, data collection, and decision-making. The research scheme chosen for this thesis is outlined below. As per Saunders (2003), the research design follows a method known as the 'Research Onion'. The figure below demonstrates the complete research design featuring two main approaches: inductive and deductive.

Inductive attack

Inductive attack is a research method that involves moving from specific observations to general conclusions. It is an open-ended and exploratory approach commonly used in the initial phase of research. In contrast, deductive attack follows a process of moving from general theories to specific observations. This method involves formulating a theory first and then making observations.

This attack is perceived as narrow because it is limited and bound to the chosen theory. To conduct the research in the thesis, the writer decided to use the inductive attack, which is more flexible than the deductive one and allows for more opportunities to explore the subject.

Data aggregation methods

Data aggregation methods are considered a crucial part of the research to be conducted. The entire process and phenomenon of the thesis research rely on the methods of data aggregation used to collect relevant data. This ensures access to research problems. There are primarily two types of methods available for

data collection: Secondary Data Collection Methods and Primary Data Collection Methods.

Methods for aggregating secondary information

Secondary information refers to existing information that is readily available for use. This information is typically collected for other research purposes and can be accessed easily. It is available in both qualitative and quantitative forms. Qualitative information does not include numbers, diagrams, or facts and figures.

This information is completely derived from the theoretical portion and is primarily used for preparing a literature review for research. On the other hand, there is another form of information known as quantitative, which consists of numerical data and facts.

The study encompasses the one-year analysis of companies and the presentation of data in a numerical form.

Primary data collection methods

Primary data collection methods involve the researcher collecting information directly in order to obtain relevant data for the research. This type of data is predominantly qualitative in nature. Various methods used to collect primary data include interviews, surveys, and questionnaires. This thesis utilizes both types of data, namely qualitative and quantitative.

Both secondary information aggregation and primary information aggregation are equally important for conducting research. In order to conduct a thorough and critical analysis of the research problem, both types of information must be used in the thesis. The table below provides a brief outline of the various methods used in data collection, along with their advantages and challenges.

Restrictions of study

• One limitation is that the research topic has not yet been examined in detail. However, there are some outlined restrictions.
• Firstly, the research is being conducted in a broad area, making it difficult to gather relevant information using data collection methods.
• Secondly, there is a
  

vast amount of data available on this topic which is stored in different databases.

Ethical Considerations

Since this research topic is related to client relationship management, the main ethical concern is how to implement an appropriate strategy for a company to operate this process.

In order to develop the research subject for my thesis, I will follow both the instructions provided by the college and the regulations of the University. These regulations will be supplied to me in a accessible form. Additionally, the main source of data collection for my thesis will be secondary data for the company or organization. It is important to note that there is currently no provision for data protection, but this will be addressed before the information is published. Interviews and questionnaires are also reliable sources for gathering data for my research.

For this purpose, the interview may be recorded, subject to permission from the interviewee. The supervisor will provide guidance throughout the thesis preparation process. The engagement information will be used appropriately in the literature review and other research components.

Planning and Required Resources

Week 1: Introduction and objectives

Week 2: Literature review

Week 3: Research methods

Week 4: Data collection

Week 5: Data collection

Week 6: Data analysis

Week 7: Data analysis

Week 8: Findings

Week 9: Decision-making

Week 10: Recommendations

Week 11: Presentation and submission.