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Relationship
Social customer relationship management
management factors and
business benefits
Sheshadri Chatterjee
Department of Computer Science and Engineering, IIT Kharagpur, Kharagpur, India
Received 13 November 2019
Ranjan Chaudhuri Revised 31 January 2020
10 February 2020
Department of Marketing Management, NITIE, Mumbai, India Accepted 11 February 2020

Demetris Vrontis and Alkis Thrassou


University of Nicosia, Nicosia, Cyprus
Soumya Kanti Ghosh
IIT Kharagpur, Kharagpur, India, and
Sumana Chaudhuri
Department of Management Studies, DSIMS, Mumbai, India

Abstract
Purpose – This study aims to identify the business benefit of and factors affecting the use of social
customer relationship management (SCRM) in Indian organizations.
Design/methodology/approach – Building on theoretical foundations, a conceptual model of factors
affecting SCRM in Indian organizations is developed and empirically tested through a survey and
corresponding analysis using SPSS and AMOS software.
Findings – The study presents empirical evidence that technological competence, environmental characteristics
and organizational environment positively impact the actual use of SCRM on Indian organizations. Additionally,
leadership support of organizations impacts positively the actual use of SCRM in organizations, while the trust factor
insignificantly impacts the latter. The actual use of SCRM in organizations was found to have a positive impact on
their business benefits.
Research limitations/implications – The theoretical model is built on the constructs of the technology,
environment and organizational framework. It has added new factors, such as leadership support and trust, and
thereby identified the business benefits of organizations using SCRM mediating through the organizations’ actual
use of SCRM. The proposed model is simple, implementable and has a high explanative power of 81 per cent.
Practical implications – The study provides practitioners with evidence and practicable knowledge
regarding the means and impact/benefits of SCRM use in Indian organizations.
Originality/value – The study is one of few empirical studies on the topic and contributes valuable
knowledge to extant works through additional factors, theoretical conceptualization and empirical scientific
findings of both scholarly and executive worth.
Keywords India, Planning, Social media, Social customer relationship management,
Technology environment organizational framework
Paper type Research paper

1. Research background, contextualization and aim International Journal of


Organizational Analysis
Traversing extant scientific works, one habitually crosses paths with the notion of customer © Emerald Publishing Limited
1934-8835
relationship management (CRM). Increasingly, it is positioned at the epicentre of strategic DOI 10.1108/IJOA-11-2019-1933
IJOA marketing theories and notions that focus on customers and satisfying their needs and
wants for long-term business success (Thrassou, 2007). While the principle of CRM is not
hard to grasp, its application through varied means and contexts is more elusive.
The conception of CRM for business issues is not modern. It comprises interactions
between organizations and their valued customers, helps to promote loyalty and
commitment from those valued customers (Lee et al., 2014) and covers a broad spectrum of
business activities. Among others, it is associated with organizations engaging customers in
different ways; making customers aware of sales and other opportunities; providing support
from the organization’s front end; and informing customers of financial activities, research
and development (R&D) operations and human resource issues at its back end
(Assimakopoulos et al., 2015). Organizations’ business is, in fact, meaningfully influenced by
CRM-based technologies, and without CRM, it is tough for them to ensure effective customer
relationships (Coyle et al., 2013).
CRM can be conceptualized under various forms: traditional CRM, mobile CRM (m-CRM),
electronic CRM (e-CRM) and lately, social CRM (SCRM) (Awasthi and Sangle, 2012). SCRM
constitutes the primary focus of this research and largely, directly and indirectly, relates to
the fact that social media sites are increasingly being used by public and consumers, and
social networking has become integral to daily life (Gayathri et al., 2012; Papasolomou et al.,
2014). Social media are also an effective e-commerce platform, helping to increase interaction
between customers and organizations, as well as between customers and customers (Sago,
2010; Evans, 2012). In fact, interaction between customers and organizations has been
revolutionized with social media’s help, yielding considerable impacts on business (Aral,
2011; Todri and Adamopoulos, 2014), with these relationships taking a new shape through
social networking platforms (Harrigan et al., 2015). Moreover, this relationship has been
instrumental in business and planning improvements, particularly with the pervasive use of
social media platforms like YouTube, Twitter and Facebook (Malthouse et al., 2013; Ghezzi
et al., 2016).
With the help of Web 2 tools, the conception of SCRM was first developed in the year
2007, and it redefined business strategy, business planning and business philosophy itself
(Greenberg, 2010). Activities of SCRM cover the effective monitoring of customers, enhance
contact with customers, create compact customer communities, nurture feedback by the
customer community (Schultz et al., 2012) and identify products that could be in high
demand. This new environment of SCRM multiplies the uses of social media as a mediating
platform to support online buying and selling of products and services (Shen and Eder, 2011;
Zhou et al., 2013) and offers effective impetus for organizations to improve through
appropriate integrative planning (Oehri and Teufel, 2012; Khan and Sadiq, 2015). Moreover,
SCRM influences the behaviour of individuals in using online platforms with information
obtained from the social networking system (SNS) (Irani et al., 2017; Maiz et al., 2016).
However, the means and impact of the success of SCRM depend on a multitude of factors.
The history of SCRM in business is relatively brief. While there are studies on the subject,
their number and scope are disproportionally limited to its present and future importance
(Lee and Phang, 2015). SCRM applications in an organization have delivered improvements
in its business philosophy. However, in India, such application in organization is at a
nascent stage (Guha et al., 2018). Studies of the outcomes of SCRM on business have not
explicitly elaborated on the Indian context (Parveen et al., 2015) nor have they focused on
any relevant theory. This study has strived to fill this gap using the technological,
environmental, organizational (TEO) framework (Aboelmaged, 2014) with some appropriate
modifications.
In this context, the aim of this study is to identify the factors that would help an Indian Relationship
organization to adopt SCRM that would be beneficial to it. The findings of the research show management
that the actual use of SCRM is positively impacted by technological competence,
environmental characteristics, organizational environment and leadership support, and that
SCRM provides positive benefits to the organization that implements it. However, the trust
factor does not have any significant impact on the actual use of SCRM. Methodologically, it is
building on theoretical foundations to produce a conceptual model of factors affecting SCRM
in Indian organizations, which is subsequently empirically tested through a survey (sample
308) and corresponding analysis using SPSS and AMOS software. The quest of the study is
driven by three fundamental research questions (RQs) emerging from extant works in the
context of India:

RQ1. Which are the factors impacting the actual use of SCRM in organizations?
RQ2. Does the organizational environment impact the use of SCRM in organizations?
RQ3. Does the use of SCRM offer substantive business benefits to organizations?

2. Factors affecting social customer relationship management – the theoretical


foundation
The initial theoretical research has confirmed that, with Indian organizations recently
applying SCRM, extant research concerning this context is extremely limited, despite its
strategic importance (Bresciani et al., 2015). Consequently, this research has worked from
“first principles”, utilising pertinent literature of more international contexts. This has
indicated that CRM activities may generate significant business benefits to an organization
if its employees get effective support from management, if the organization secures external
support and if the organization enriches its organization–customer relationship through
meaningful planning and with an appropriate, customer-focused and customized
implementation process (Chan et al., 2018; Guha et al., 2018).
To ensure benefits, advanced technology needs to be adopted and applied to strengthen
CRM activities (Law et al., 2018). Studies reveal that the use of social media is the best
technology to strengthen CRM activities and bring the customers closer to the organization.
Hence, the need arises for SCRM activities (Sigala, 2018; Zerbino et al., 2018). Whenever an
organization adopts a new system or technology, the attitudes of the organization’s top
officials play vital roles (Askool and Nakata, 2011; Mathew, 2016). When the question of
adopting SCRM in an organization is raised, top managers should consider if this system is
trustworthy, how it can easily share information between the organization and the
customers and how the employees would react to and be made familiar with the new system
(SCRM) (Elena, 2016; Xu, 2017; Kantorová and Bachmann, 2018; Singh et al., 2019a).
Customer relationship performance is increased through the adoption of SCRM (Alt and
Reinhold, 2012; Trainor et al., 2014; Anshari et al., 2019), and marketing is a primary CRM
activity (Kaur et al., 2019). Marketing capabilities can be improved if the pulse of the
customers can be felt (Buzzetto-More, 2013). For this, the organization must have
capabilities to come close to ever more customers (Amirkhanpour et al., 2014; Singh et al.,
2019b). To achieve prolonged benefits, these customers need be retained, and their wishes
need to be managed by analyzing their characteristics (Parveen et al., 2015). Even if a
customer tends to dissociate relationship with the organization, the organization should
analyses why such things happen. All these come under the ambit of improved CRM
IJOA activities and these can be effectively achieved if SCRM is aptly applied (Dewnarain et al.,
2018; Kaur and Soch, 2018).
For improving business activities relevant to issues of expenditure, SCRM also plays a
vital role, because it is a highly cost-effective system (Hyytinen et al., 2015; Ghezzi et al.,
2016; Ruokolainen and Aarikka-Stenroos, 2016). Whenever an organization introduces a
new system or technology, the employees who are to handle the system feel uncertainty
(Koster and Stel, 2014). Initially, they suspect that the new technology might not fetch any
significant business benefits (Al-Gahtani, 2011; Singh, 2018), and they are naturally
reluctant to adopt the system. Thus, the trust factor comes into play (Hyytinen et al., 2015).
The organization’s top management must make the employees aware of the prospect for
success of the new system they contemplate introducing (Ghezzi et al., 2016). This would
help the employees to trust the new system. Hence, trust may be considered one of the
determinants for adopting SCRM (Rahimi and Kozak, 2017). If a new system or technology
is introduced in an organization, the employees should be appropriately trained and made
technologically competent to use it (Trainor et al., 2014). However, if the employees are
already conversant in such technology, the adoption will be easier (Harrigan et al., 2015).
Thus, environmental assistance and a conducive situation would accelerate the adoption.
Moreover, the support from top management plays a crucial role (Hameed et al., 2012). If
employees who will handle the technology do not have any tangible and intangible support
from the organization’s leadership, adoption will be inevitably retarded (Tate et al., 2015;
Thrassou et al., 2018b) Thus, when SCRM is introduced, these factors would affect its
adoption, as has been supported by other studies (Voges and Pulakanam, 2011; San-Martína
et al., 2016; Gummesson, 2017). The use of SCRM in turn would bring business benefit to
organizations (Sago, 2010; Trainor et al., 2014). The other factors: technological competence,
trust in SCRM, environmental characteristics, leadership support and organizational
environment need to be considered in this context (Aboelmaged, 2014).

3. Conceptualization and development of hypotheses


Organizations benefit from developed, updated and effective SCRM technologies for the
customers (Vrontis et al., 2017) to save money and time. Consumers will use this technology
if it benefits them Trainor et al. (2014), Braojos-Gomez et al. (2015), Ramayah et al. (2016).
SCRM technology should be compatible with the organizations’ available technologies
(Gupta et al., 2013). If a particular SCRM technology is highly observable, companies would
align to adopt that Miranda et al. (2016). Observability of SCRM technology would increase
through popularity of social networking platforms like Facebook, YouTube and Twitter
(Chau and Xu, 2012). Customers would be more likely to use SCRM technology if they are
competent to use it Lin and Chen (2012), Alshamaila et al. (2013), Ngai et al. (2015).
Technological competence includes perceived advantage, compatibility, observability and
effort expectancy (Trainor et al., 2014). Thus, these various studies indicate that advantages
in using SCRM, its compatibility, with an organization’s current technology, its ease of use,
and its observable outcomes will motivate organizations to use SCRM, and these attributes
are associated with organizations’ technological competence. Based on these assertions, we
proposed the following hypothesis:

H1. Organizations’ technological competence to apply SCRM technology is positively


concerned with their using an SCRM application.
SCRM technology relates to the use of the internet, and internet studies are significantly
connected with the trust factor of the organization. Any organization that attempts to adopt
a new technology like SCRM technology would initially consider how secured and reliable
this new system is (Mulero and Adeyeye, 2013; Alshibly, 2015). The organizations must Relationship
trust the SCRM system; otherwise, they would not actually use it (Turan, 2012). They must management
devise this SCRM technology so that customers can trust that their online activities are
secured and reliable (Al-Gahtani, 2011). Trustworthiness helps to mitigate risk. From the
various studies, it becomes clear that any technological benefit for an organization will be
applied if it appears to be safe, and once the organization feels that using that technology is
risk-free, trust will grow, thus motivating the organization to actually use that technology.
From this standpoint, the following hypothesis is proposed:

H2. Organizations’ trust in SCRM would positively impact on their actual usage of
SCRM.
External pressure from customers and competitors can influence business activities.
Support from government is also essential. In countries like Iran (Fathian et al., 2008),
Malaysia (Tan et al., 2009), the USA (Alam et al., 2011) and Indonesia (Rahayu and Day,
2015), government support is provided to organizations to adopt new technology like SCRM.
Some studies have noted that government support would not change adoption behaviour of
organizations that were forced to purchase unnecessary IT software and hardware (Kim
et al., 2015; Irani and Sharif, 2015). Contributions from venture capitalists, another
environmental characteristic, play an important role in funding, as they anticipate receiving
a considerable profit in return (Bartkus et al., 2013; Marcus et al., 2013; Wonglimpiyarat,
2016). Social networking platforms help organizations to connect with venture capitalists
who are able to take appropriate decision with the help of a social network platform to
assess if investment would be profitable or not (Braojos-Gomez et al., 2015). Thus,
environmental characteristics have a substantial influence on organizations to adopt new
technology like SCRM. Customer demand, competitors’ activities as well as the possibility of
getting financial support from venture capitalists might encourage an organization to use
any new technology to improve business activities. These factors can be considered
environmental issues that would influence an organization’s business activities. From this
standpoint, the following hypothesis is prescribed:

H3. Environmental characteristics can positively influence the actual usage of SCRM
applications in organizations.
Application of any innovative technology in an organization becomes successful
depending on the attitude of the organizations’ leadership (Hameed et al., 2012;
Thrassou et al., 2018b, 2018c), namely, the attitude of the top executives (Gualandris
and Kalchschmidt, 2014). Studies revealed that top executives’ innovativeness and
positive attitudes towards new technology, such as SCRM, affect the chance that an
organization will adopt the new technology (Chou et al., 2013; Tate et al., 2015).
Some studies highlight that an organization’s leadership’s attitude towards using
innovative technologies can be positive, while others show that management has
negative attitudes towards it. In Malaysia (Parveen et al., 2015), France (Lacoste, 2016)
and Chile (Bianchi and Andrews, 2015), the top leadership has positive attitudes in
using SCRM, whereas in Canada (Poba-Nzaou et al., 2016) and Pakistan (Ellahi and
Bokhari, 2013), the situation is the opposite. However, leadership attitudes and
innovative capabilities (Thakur et al., 2016) influence their organizations’ usage of
SCRM (Hameed et al., 2012). For the situation to be conducive to implementing SCRM,
top executives must support the organization’s adoption of new technology by
IJOA providing the funding for it and by motivating employees with appropriate training
and so on. With these inputs, the following hypothesis is developed:

H4. Leadership support positively affects the actual usage of SCRM in organizations.
Organizational demographic features are also factored when analyzing an organization’s
usage behaviour with new technology. Demographic features of organizations include its
location, size, cultural orientations of the employees, availability of technological expertise
and financial health. These characteristics count much to mould organizations’ adoption
capabilities. For adoption of any new technology by an organization, financial resources are
needed. SCRM technology is cost-effective, but its use should not be construed to be totally
free of cost (Kirtis and Karahan, 2011). To use SCRM, being a new technology, employees
need to be trained. The chosen SCRM solution should be customized to address the
organization’s needs (Harrigan et al., 2015). The organizational environment includes
financial health and business incubation, which are important factors for an organization to
adopt a new technology (Ratinho et al., 2013). Business incubators generally provide
physical premises and extend support to organizations with administrative functions,
knowledge transfer, marketing intelligence and even customer management, which
facilitate adoption of new technology like SCRM (Wonglimpiyarat, 2016). This has been seen
in China where business incubation had positive effects on organizations’ use of new
technologies (Lilai, 2010; Ratinho et al., 2013). Thus, studies revealed the factors an
organization needs to adopt a new technology. These include the organization’s size, its
demographics, employees’ dispositions to technology, the organization’s financial strength
and if business incubators are available. These factors constitute the organizational
environment.
From this standpoint, the following hypothesis is developed:

H5. An organization’s environment can positively impact its actual usage of SCRM.
When all the instrumental factors for an organization to adopt SCRM act favourably, it
adopts this technology. We have already hypothesized that organizational environment
impacts on actual use of SCRM in organizations (H5). However, this determinant, i.e.
organizational environment, includes many ingredients, which directly influence the
business benefit of the organizations (Sago, 2010). A favourable organizational environment
brings customers to frequently use online platforms. This improves the organization’s
business benefit (Shen and Eder, 2011). The organizational environment includes the
organization’s technological expertise (Aral, 2011). These results in business benefit using
SCRM in organization (Evans, 2012). Thus, a conducive organizational environment will
help organizations to use an innovative technology that is beneficial for its business. With
all these inputs, the following hypothesis is prescribed:

H6. Organizational environment can positively influence the business benefits of


organizations through usage of SCRM.
SCRM is a new concept in organizational functioning, and it provides effective benefit to the
organizations that use it (Greenberg, 2010). Through applying SCRM technology, an
organization can create its own customer community. It can monitor customers effectively, it
can share customer contacts as and when needed, it can meaningfully analyze customer
feedback and it can provide product information (Chiu et al., 2012; Schultz et al., 2012). Use of
SCRM in organizations suggests that the SCRM era could eventually take over the entire
marketing environment, providing effective and substantial business benefits to
organizations (Marsden, 2010; Stephen and Toubia, 2010). It has impacted on the business of Relationship
the organizations towards gaining benefits (Lee and Phang, 2015). As the SCRM technology management
is cost-effective, is easy to use, easily analyzes customers’ likes and dislikes and identifies
group of customers, an organization perceives that using it will be beneficial in many ways.
With all these inputs, we can derive the following hypothesis:

H7. Actual use of SCRM in organizations improves business benefits.


The above theoretical findings and consequent hypotheses are, thus, conceptualized in a
single integrated model of SCRM (Figure 1).
Additionally, our theoretical research has identified seven constructs targeting the goal
of “business benefits using SCRM” (BBUS). Table I presents and briefly explains these.

4. Research methodology, tests and analyses


The theoretical part of the research methodically led to the development of the conceptual
model depicted in Figure 1, and it and its hypotheses are subsequently validated and tested.
The number of independent variables being greater than that of dependent variables, partial
least square (PLS) regression analysis mechanism is adopted (Abdi, 2010) for validating the
conceptual model and for hypotheses testing.

4.1 The survey


Resting also on extant works’ inputs and knowledge derived from the constructs, we
prepared 40 questions (items) to get feedback from prospective respondents. While
preparing the questionnaire, we followed standard guidelines. The layout of the
questionnaire was purposefully kept simple, and leading questions and ambiguous

Figure 1.
An integrated
conceptual model of
SCRM factors and
benefits
IJOA Construct Explanation Source

Technological Technological competence includes compatibility, San-Martína et al. (2016),


competence (TECO) visibility, trialability and perceived advantages. This Aboelmaged (2014),
construct has been used to explain why, how and in Trainor et al. (2014)
what ways new idea through technologies are used in
organizations to fetch business benefit
Trust on SCRM It is associated with degree of uncertainty. Security and Al-Gahtani (2011), Turan
(TRUS) privacy are construed to be factors in the centre of trust (2012), Mulero and
in the internet ambience. Trust is concerned with users’ Adeyeye (2013), Alshibly
satisfaction with technology. If you are satisfied, you (2015)
possess trust on the issue. Trust in SCRM by the
organization is a vital issue in using SCRM to fetch
business benefits
Environmental Environmental characteristics include external factors Tan et al. (2009), Kim et al.
characteristic (ENH) like external pressure, government support, venture (2015), Rahayu and Day
capital support. These factors simultaneously constitute (2015)
environmental characteristics that effectively influence
business activities of organizations, including usage of
SCRM.
Leadership support For an organization, to adopt or use innovative Hameed et al. (2012), Chou
(LESU) technology, like SCRM, top executives’ attitudes and et al. (2013), Tate et al.
innovative ideas count much. Hence, leadership support (2015)
is an essential factor in using SCRM in organizations
Organizational Locality of the organization, financial health, Kirtis and Karahan (2011),
environment technological expertise, cultural orientation of the Harrigan et al. (2015)
(OREN) employees are attributes of organizational environment.
Each of these factors influences the actual use of SCRM
in organizations. This eventually improves business
benefits of organizations
Actual use of SCRM Whenever all the factors affecting organizations’ use of Greenberg (2010), Stephen
in organization SCRM act favourably, the organizations would proceed and Toubia (2010), Chiu
(AUSO) to adopt and use SCRM to make profits. Thus, use of et al. (2012), Schultz et al.
SCRM helps organizations to analyze all aspect of (2012)
customers’ behaviour. It is beneficial for fetching
business profits
Table I. Business benefits If organizations can use SCRM and are favoured by all Sago (2010), Evans (2012),
Explanation of using SCRM factors influencing its use, they would benefit Lee and Phang (2015)
constructs with (BBUS) enormously. Organizations would incur less costs as the
source use of SCRM is cost-effective

questions were precluded. The questions were framed in the form of statements and
made easy to reply. The questions became progressively more difficult. The
questionnaire was designed using scale development architecture (De Vellis, 2012;
Carpenter et al., 2016; Carpenter, 2018) and was verified by nine industry experts and
scholars. Out of these nine experts, five came from organizational backgrounds,
working in R&D departments. They have made scholarly contributions to social
networking in business issues. All five had more than ten years’ industry experience.
The remaining four experts came from academic areas and are engaged in research
relevant to SNS in business. They all had a minimum of five years of research
experience in the field. These nine experts verified the 40 questions and opined that
nine were vague or not understandable. These were rejected and the questionnaire was
accordingly corrected to finally incorporate a total of 31 questions.
For our sample, we randomly selected 96 small, big and medium organizations in India. Relationship
We collected the names of the organizations by attending different conferences throughout management
2017 and 2018. The subject matter of each conference also covered CRM and SNS in
organizations. We contacted different people from those conferences and identified 96
appropriate organizations. We further obtained the contact details of their top- and middle-
level executives. From that group, we selected 397 persons as our prospective respondents,
comprising males and females of different age groups and varied educational qualifications.
We emailed all 397 respondents, underlining the importance of the survey and providing a
link to the online questionnaire. They were asked to state on a five-point Likert scale
whether they agreed or disagreed with each question and return the questionnaire within
one month. We received 357 responses, which were subsequently scrutinized by the afore-
described expert panel. They recommended to exclude 49 replies that were vague and biased
which left us with 308 usable responses. As the ultimate response was 77.6 per cent, which is
high, the results should not be affected by nonresponsive bias.
The item-responses ratio should be 1:4 to 1:10 (Deb and David, 2014), and with 31 items
and 308 useable responses, we were within the acceptable range. We quantified the
responses on a five-point Likert scale, marking strongly disagree as 1 to strongly agree as 5.
The demographic information of respondents is shown in Table II.
The table above indicates a feedback of 70.5 per cent male and 29.5 per cent female
executives. We received feedback from 52.6 per cent of executives with an age range of 31 to
40 years and from 1.3 per cent with an age range below 20, 49 per cent executives with a
qualification standard of BE/ME/MTech, 0.6 per cent of executives with a PhD, 55.5 per cent
middle-level executives and 15.2 per cent C-level executives of the organizations.

4.2 Construct reliability and multicollinearity test


To ascertain if the seven constructs chosen are reliable and consistent, we estimated
Cronbach’s a of each construct. We found that each has a value of more than 0.6, which is

Category No. (%)

Gender
Male 217 70.5
Female 91 29.5
Age (years)
< 20 4 1.3
21-30 50 16.2
31-40 162 52.6
41-50 66 21.5
> 50 26 8.4
Highest education
Graduate (non-technical) 65 21.1
Post-graduate (non-technical) 90 29.3
BE/ME/MTech (technical) 151 49.0
PhD (research) 2 0.6
Managerial level Table II.
C-level executive 47 15.2 Demographic
Medium-level executive 171 55.5 information of
First-level executive 90 29.3 respondents
IJOA the lowest acceptable value (Hair et al., 1998). In this study, we found that values of
Cronbach’s a lie between 0.896 to 0.941. Again, if the inner meaning of each construct comes
very close to each other, we say that the constructs identified suffer from the
multicollinearity defect. In that case, it poses problems in applying PLS regression analysis.
For this, we needed to estimate the variance inflation factor (VIF) of each construct (James
et al., 2017). In computing the VIF of each construct, we found that their values lie between
3.3 and 5, which is the acceptable range (Kock and Lynn, 2012). Hence, identifying
constructs does not suffer from the defect of multicollinearity. The entire results are shown
in Table III.

4.3 Computation of loading factors, average variances extracted, composite reliabilities and
maximum shared variances
To ascertain if each item can fully interpret its own construct, the loading factor (LF) of each
item was measured. We determined if the constructs identified are valid by finding out the
average variance extracted (AVE) of each. To reconfirm the reliability of each construct, we
needed to estimate the composite reliability (CR) and maximum shared variance (MSV) of
each construct (Fornell and Larcker, 1981). The LFs of items, AVEs, CRs and MSVs of the
constructs have been estimated and are shown in Table IV.
The acceptable lowest value of LF is 0.707 (Barroso et al., 2010), AVE is 0.5 (Hair et al.,
2011) and CR is 0.7 (Urbach and Ahlemann, 2010). The results shown in Table IV show that
values of LF, AVE and CR are within acceptable ranges. Hence, items are reliable, and the
constructs are valid as well as reliable and consistent. It appears from Table IV that each
value of MSV of a construct is less than its corresponding value of AVE, which signifies that
the constructs are validly chosen (Fornell and Larcker, 1981).

4.4 Discriminant validity test


If it appears that items related to a construct can strongly explain that construct and weakly
explain other constructs, we say that discriminant validity has been established (Fornell and
Larcker, 1981). This can be tested in two ways. The square root of AVE of each construct,
known as average variance (AV), is estimated. If it is greater than the Pearson correlation
coefficients of that construct relating to other constructs, it is said that discriminant validity
has been established. The results are shown in Table V.
The results show that each value of AV (shown in diagonal position of Table V) is
greater than the corresponding correlation coefficients of that construct with other
constructs (shown in off-diagonal positions). It establishes discriminant validity. By another
way, we can establish discriminant validity. In this case, we are required to find the LF of
each item relating to its own construct and to find the cross-loading factor of each item
relating to other constructs. If it is found that LFs are all greater than the corresponding

Construct No. of items Estimation of Cronbach’s a VIF

Technological competence (TECO) 4 0.921 3.4


Trust in SCRM (TRUS) 4 0.901 3.6
Environmental characteristics (ENCH) 4 0.913 4.1
Leadership support (LESU) 4 0.896 3.9
Table III. Organizational environment (OREN) 4 0.941 4.6
Construct reliability Actual use of SCRM in organization (AUSO) 5 0.911 4.8
test Business benefit using SCRM (BBUS) 6 0.907 4.5
Construct/item LF AVE CR MSV
Relationship
management
Technological competence (TECO) 0.797 0.831 0.270
TECO1 0.911
TECO2 0.890
TECO3 0.850
TECO4 0.917
Trust in SCRM (TRUS) 0.826 0.857 0.316
TRUS1 0.905
TRUS2 0.911
TRUS3 0.907
TRUS4 0.913
Environmental characteristics (ENCH) 0.819 0.893 0.256
ENCH1 0.913
ENCH2 0.901
ENCH3 0.890
ENCH4 0.915
Leadership support (LESU) 0.858 0.906 0.348
LESU1 0.961
LESU2 0.892
LESU3 0.913
LESU4 0.937
Organizational environment (OREN) 0.820 0.867 0.267
OREN1 0.934
OREN2 0.890
OREN3 0.911
OREN4 0.967
Actual use of SCRM in organization (AUSO) 0.854 0.903 0.249
AUSO1 0.911
AUSO2 0.927
AUSO3 0.930
AUSO4 0.924
AUSO5 0.929
Business benefit using SCRM (BBUS) 0.865 0.891 0.348
BBUS1 0.913
BBUS2 0.917
BBUS3 0.971
BBUS4 0.955 Table IV.
BBUS5 0.925 LF, AVE, CR, MSV
BBUS6 0.897 estimation

Construct TECO TRUS ENCH LESU OREN AUSO BBUS AVE

TECO 0.893 0.797


TRUS 0.513 0.909 0.826
ENCH 0.490 0.516 0.905 0.819
LESU 0.516 0.490 0.491 0.926 0.858
OREN 0.407 0.562 0.499 0.511 0.906 0.820 Table V.
AUSO 0.517 0.556 0.501 0.517 0.517 0.924 0.854 Discriminant validity
BBUS 0.519 0.550 0.506 0.590 0.514 0.499 0.930 0.865 test
IJOA cross loading factors, it is said that each item is strongly related to its own construct and
weakly related to other constructs. It confirms that the discriminant validity has been
established. The estimates of loadings and cross-loadings are shown in Table VI.
It appears from the results that the LF of each item is greater than the corresponding
cross-loading values, establishing discriminant validity.

4.5 Structural equation modelling (SEM)


With the help of AMOS 22, the fit indices and other parameters were calculated. SEM was
used to assess the relationship among latent variables. It helps to confirm if the model
correctly represents underlying data. The fit indices and root mean square error (RMSE)
have been estimated. They are represented in Table VII.
Table VII shows that all fit indices are within their acceptable limits. Thus, we have been
able to establish relative adequacy of the model fit. The detailed results containing paths,
hypotheses, b -values, p-values are shown in Table VIII.
The detail model after validation is shown in Figure 2.
The dotted line shown in Figure 2 signifies that hypothesis (H2) TRUS ! AUSO has not
been supported. Besides, to visualize the entire structure, including values of R2 along with
path weights, significance level and remarks, the results are shown in Table IX.

Item TECO TRUS ENCH LESU OREN AUSO BBUS

TECO1 0.911 0.417 0.399 0.414 0.417 0.418 0.492


TECO2 0.890 0.418 0.410 0.441 0.443 0.462 0.321
TECO3 0.850 0.420 0.411 0.443 0.464 0.456 0.312
TECO4 0.917 0.432 0.467 0.456 0.461 0.453 0.458
TRUS1 0.415 0.905 0.456 0.413 0.565 0.463 0.456
TRUS2 0.417 0.911 0.419 0.431 0.309 0.411 0.413
TRUS3 0.461 0.907 0.462 0.416 0.462 0.417 0.448
TRUS4 0.512 0.913 0,417 0,418 0.417 0.471 0.417
ENCH1 0.490 0.417 0.913 0.417 0.473 0.473 0.437
ENCH2 0.301 0.456 0.901 0.461 0.443 0.444 0.414
ENCH3 0.417 0.463 0.890 0.419 0.447 0.456 0.412
ENCH4 0.463 0.512 0.915 0.417 0.467 0.431 0.381
LESU1 0.472 0.517 0.456 0.961 0.411 0.413 0.391
LESU2 0.416 0.503 0.455 0.892 0.461 0.415 0.307
LESU3 0.460 0.509 0.481 0.913 0.417 0.416 0.449
LESU4 0.491 0.505 0.483 0.937 0.419 0.491 0.455
OREN1 0.417 0.363 0.456 0.490 0.934 0.431 0.456
OREN2 0.433 0.392 0.499 0.491 0.890 0.417 0.419
OREN3 0.456 0.491 0.497 0.494 0.911 0.408 0.417
OREN4 0.512 0.417 0.404 0.503 0.967 0.431 0.481
AUSO1 0.517 0.503 0.506 0.408 0.417 0.911 0.478
AUSO2 0.519 0.501 0.503 0.431 0.431 0.927 0.478
AUSO3 0.555 0.431 0.411 0.474 0.473 0.930 0.417
AUSO4 0.490 0.489 0.491 0.472 0.427 0.924 0.441
AUSO5 0.497 0.412 0.421 0.491 0.419 0.929 0.473
BBUS1 0.411 0.504 0.405 0.480 0.408 0.417 0.913
BBUS2 0.416 0.506 0.507 0.484 0.447 0.456 0.917
Table VI. BBUS3 0.462 0.494 0.493 0.491 0.419 0.447 0.971
Computation of BBUS4 0.480 0.457 0.456 0.457 0.475 0.474 0.955
loading and cross- BBUS5 0.411 0.462 0.460 0.463 0.436 0.438 0.925
loading factors BBUS6 0.464 0.517 0.513 0.505 0.507 0.411 0.897
4.6 Common method bias Relationship
It was necessary to examine if the data set is free from common method bias (Algharabata management
et al., 2018). Therefore, we used Harman’s single-factor test (Harman, 1976) through SPSS
software to alleviate the issue of common method bias. We considered all the items from all
the constructs for analysis (Podsakoff et al., 2003). The factor that emerged explains 43.6 per
cent of the variance. It is less than the cut-off value of 50 per cent, as suggested by Podsakoff
et al. (2003). As such, we can say that our sample is free from common method bias.

5. Findings and discussion


5.1 Results
In the conceptual model, we have developed seven hypotheses, out of which only H2 has not
been supported. It signifies that the impact of TRUS on AUSO has not been supported,
indicating that trust in SCRM cannot have significant influence on the actual use of SCRM in
organizations and it contradicts earlier studies (Al-Gahtani, 2011). This is presumably
because all levels of employees lack confidence in using SCRM, as they do not know about it
or what its benefits are for organizations. Governments should lead organizations to make
potential users aware of the benefits of SCRM to enhance their confidence. Moreover, the
results indicate that out of the five exogenous constructs, the impact of LESU on AUSO is
the highest because the corresponding path coefficient is 0.69. It is the highest with a
significance level p < 0.01 (**). The construct OREN impacts on both AUSO and BBUS
which is the goal of the study, thus supporting earlier studies (Marcus et al., 2013). It appears
that impact of OREN on BBUS is greater than its impact on AUSO, as the corresponding
path coefficients are 0.57 and 0.49, respectively, with the same significance level p** < 0.01
(H5 and H6). The constructs TECO, TRUS, ENCH, LESU and OREN can explain AUSO to
the extent of 68 per cent, as the corresponding R2 = 0.68. The constructs OREN and AUSO
simultaneously can explain the BBUS to 81 per cent because the corresponding value of R2
is 0.81. The explanative power of the model is therefore considerably high in explaining
BBUS. The exogenous constructs TECO, TRUS, ENCH, LESU and OREN can impact on

Fit Index Recommended value Value in the model

x 2/df # 3.000 Gefen (2000) 2.004


Goodness-of-fit index (GFI)  0.900 Hoyle (1995) 0.969
Adjusted GFI (AGFI)  0.800 Segars and Grover (1993) 0.977 Table VII.
Comparative fit index (CFI)  0.900 Hoyle (1995) 0.992 Model fit summary
Tucker–Lewis index (TLI)  0.950 Hu and Bentler (1999) 0.963 relating to the
RMSE # 0.080 Hu and Bentler (1999) 0.025 research model

Path Hypothesis b -value Significance level Remarks

TECO ! AUSO H1 0.470 p < 0.01(**) Supported


TRUS ! AUSO H2 0.014 p > 0.05 (ns) Not supported
ENCH ! AUSO H3 0.590 p < 0.01(**) Supported
LESU ! AUSO H4 0.690 p < 0.01(**) Supported
OREN ! AUSO H5 0.490 p < 0.01(**) Supported
OREN ! BBUS H6 0.570 p < 0.01(**) Supported
AUSO ! BBUS H7 0.720 p < 0.001(***) Supported
Table VIII.
Note: **The relationship is significant Detailed results
IJOA

Figure 2.
Structural model with
path weights and
with level of
significance

Measure Hypothesis b -vale p-value Remarks


2
Effect on AUSO R = 0.68
By TECO H1 0.470 p < 0.01 (**) Supported
By TRUS H2 0.014 p > 0.05 (ns) Not supported
By ENCH H3 0.590 p < 0.01 (**) Supported
By LESU H4 0.690 p < 0.01 (**) Supported
By OREN H5 0.490 p < 0.01 (**) Supported
Effect on BBUS R2 = 0.81
Table IX. By OREN H6 0.570 p < 0.01 (**) Supported
Detailed results with By AUSO H7 0.720 p < 0.001 (***) Supported
path weights and R2
value Note: **The relationship is significant

BBUS mediating through AUSO. This endogenous mediating variable has strengthened the
model, rendering its explanative power as high as 81 per cent.

5.2 Theoretical contribution


Our theoretical model has a high explanative power of 81 per cent. This could possibly be
achieved by choosing better suited measures in the context of using SCRM in organizations
in India. We were able to achieve good results because we did not immediately include
constructs from standard adoption theories or models. To give a sense of organization using Relationship
SCRM, we used the TEO framework in our proposed theoretical model with the addition of management
two factors, leadership support and trust, because they are considered SCRM-specific
exogenous variables. These are claimed to have enriched the model to yield better results
and contribute towards theoretical knowledge of SCRM adoption in organizations. Our
model also highlights how social media platforms can be useful tools in this field, which is
an improvement of an organization’s CRM philosophy. The concept of adding other
constructs to the TEO framework is construed to be the theoretical contribution of this
proposed model. Moreover, inclusion of the construct “trust” in our theoretical model is
considered practical and timely to study organizations’ risk-taking factors in using SCRM
(Alshibly, 2015). Our analysis found this factor not significant. This is presumably owing to
employees’ lack of awareness of SCRM that organizations adopt. But the inclusion of the
trust factor has made the model more effective. The five exogenous factors indirectly, except
partly for OREN, benefit organizations’ business by mediating through their use of SCRM.
This endogenous mediating variable has strengthened the explanative power of this
theoretical model to 81 per cent. However, modifying the TEO framework in this way has
effectively revitalized the marketing management scenario in this perspective. In some
adoption models, like UTAUT, employee’s age, experience, gender and voluntariness have
been considered important moderators (Venkatesh et al., 2003). But the explanative power of
this proposed model is high (81 per cent) without including these, because they are perceived
to be ineffective in the present context.
Our theoretical model is simple and effective for generic situations. We did not include
moderators covering individualistic issues, as they did not make appreciable sense. In our
theoretical model, we have included the construct of technological competence to assess
compatibility, visibility, trialability and perceived advantages. By considering
environmental characteristics, we have included the effect of external pressure, government
support and venture capital support. In the organizational environment, we have focused on
organizations’ locational issues, financial health and technological and cultural issues.
Hence, in our model, we have clustered many factors together and have used factors from
standard models. By adding some relevant constructs to the TEO framework, this model
has become effective at elaborating how the use of social media platforms can improve an
organization’s CRM activities towards efficient and successful marketing management.

5.3 Practical implications


Corporate landscape has undergone considerable change with the rapid emergence of social
networking technologies (Moroni et al., 2015). This social networking (SN) platform is
providing immense opportunities for constant contact with customers. It helps in selling
products to customers and for making close relationships with them (Eric, 2011; Blank and
Dorf, 2012). The theoretical model, whose value is realized with its practicable adoption
(Thrassou et al., 2018c, 2019) has seven hypotheses out of which one hypothesis, i.e. H2, has
not been supported. The organizations’ top management presumably could not make
employees aware of the effective contribution of SCRM. The organizations’ employees feel
uncertain in using SCRM technologies, which hampers organizations from using SCRM.
Hence, leadership of organizations should frame effective plans and policies to inform
employees of the advantages for organizations to use SCRM. Employees would develop
trust in SCRM applications. We have seen that TECO positively affects the use of SCRM in
organizations (H1). This implies that organizations must work to enhance the technical
expertise of all employees concerned to increase their use of SCRM, thereby bringing
increased benefits to the organizations. It is seen from the results that environmental
IJOA characteristics positively impact organizations use of SCRM (H3). This implies that top
executives of those organizations should mobilize governments to offer financial support
and to give required permits without any hindrance. Moreover, top management should
search for venture capital to get appropriate funds for the application of SCRM.
Organizations’ use of SCRM means their employees will use it. From this angle, it is
important to motivate the employees to adopt SCRM without reluctance. Towards this,
leadership support plays a vital role, and their attitudes and sense of innovativeness need to
be improved. It would bring business benefits to the organizations.

5.4 Limitations and future research direction


We have systematically developed our theoretical model and verified it with standard
statistical analysis with a sample of 308 usable responses. Still, our proposed model is not
free from limitations. In our survey, we contacted many persons of different organizations in
India for feedback to our questionnaire containing 31 questions. We got 308 usable
responses and analyzed the results. However, the responses were obtained from employees
of organizations where SCRM has not yet been fully adopted. Hence, the feedback was
predictive, and precaution needs to be taken while generalizing the findings to actual
adopters of SCRM.
It is recommended that future researchers should validate the model with actual adopters
when SCRM will be fully used in organizations. Perhaps, consideration of other boundary
conditions would be then essential. Again, India is a vast country with many companies,
and we considered just a few. This research should not be construed to be a general
representation. It is left for the future researchers to conduct surveys with more respondents.
A longitudinal study may give rise to different results. In our proposed model, we did not
consider every factor, such as employees’ anxiety, risk perception and so on. Future
researchers can consider other constructs in analyzing the results. Some adoption models
like UTAUT (Venkatesh et al., 2003) considered moderators like age, gender, experience and
voluntariness. However, we only considered direct effects of some constructs because
previous studies of adoption did not consider these moderators. No information from these
studies revealed what their effects were. Future researchers should assess how
these moderators may influence the result. Our proposed model has 81 per cent explanative
power, and future researchers might consider other boundary conditions to fill this 19 per
cent gap to enrich the model. The result has only focused on SCRM adoption. It did not
consider contributions of traditional CRM, e-CRM and m-CRM. These areas should also be
nurtured in the future.

6. Conclusion
With CRM, a new era has dawned on business philosophy and practice. With the rapid
progress in using CRM technologies, organizations are using types of CRM, other than
traditional CRM. These are e-CRM, m-CRM and most recently, SCRM. SCRM has taken
effective place in organizations’ business environment. Customer involvement determines
organizations’ success or failure. To fetch considerable business benefits, it has become
important to use SCRM in organizations. This is because SCRM technologies are not
expensive, and their use brings much profit to an organization. It is important to promote
the benefits of SCRM technologies, especially compared to other technologies. The study
also concludes that easily available internal financial support enhances adoption of SCRM
applications. Therefore, organizations’ marketing teams, responsible for improving SCRM
solutions, must focus their endeavour to strengthen funding positions. It is seen that
government support is an important factor of environmental characteristics towards
adopting SCRM technologies. It is logical to target those organizations that market SCRM to Relationship
have special expertise to successfully attract government funding. It appears that increased management
government funding would improve the adoption rate of SCRM in organizations.
After validation, the model is simple and effective, presumably because employee factors
such as age, gender, experience and voluntariness were not considered. Nevertheless, the
model has a high explanative power of 81 per cent. This model is meaningful to understand
the necessity for organizations to use SCRM. The proposed model has not indiscriminately
copied any standard model of adoption. It has used those constructs which would fit
appropriately to the context. This model may be used in the adoption of m-CRM and e-CRM
too. It is expected that then it would bring encouraging results if the endogenous and
exogenous variables are properly nurtured.
In conclusion, this study ultimately infers the following outcomes:
 Technological competence, environmental characteristics, leadership support and
organizational environment impact on the actual use of SCRM in organizations.
Among these determinants, leadership support has the maximum impact on
organizations using SCRM.
 Trust in SCRM has insignificant impact on the actual use of SCRM in organizations.
 Organizational environment has almost equal impact on the actual use of SCRM in
organizations and on the business benefit organizations receive using SCRM.
 Actual use of SCRM by an organization has a considerable influence on the business
benefits of that organization.

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Further reading
Thrassou, A., Orfanos, D., Tsoukatos, E., (2018a), “Linking motivational leadership with creativity, in”,
Vrontis, D., Weber, Y., Thrassou, A., Shams, R. and Tsoukatos, E. (Eds), Innovation and
Capacity Building -Cross-Disciplinary Management Theories for Practical Applications, Vol. 1,
Palgrave Macmillan, Cham, pp. 77-108, doi: 10.1007/978-3-319-90945-5_5.

Corresponding author
Ranjan Chaudhuri can be contacted at: ranjan@nitie.ac.in

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