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Social Customer Relationship Management Factors and Business Bene Fits
Social Customer Relationship Management Factors and Business Bene Fits
https://www.emerald.com/insight/1934-8835.htm
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
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
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?
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:
Figure 1.
An integrated
conceptual model of
SCRM factors and
benefits
IJOA Construct Explanation Source
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.
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).
Figure 2.
Structural model with
path weights and
with level of
significance
BBUS mediating through AUSO. This endogenous mediating variable has strengthened the
model, rendering its explanative power as high as 81 per cent.
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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