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OCT, 2021
 EFFECT OF CUSTOMER RELATIONSHIP
MANAGEMENT PRACTICES
ON
CUSTOMER SATISFACTION:
THE CASE OF ETHIOPIAN ELECTRIC UTILITY
MBA THESIS PRESENTATION
COMPANY, ADAMA
By:
MULUKEN SEIFU
HARAMBE UNIVERSITY
MBA PROGRAM

ADVISOR: MILKIYAS AYELE (Ph.D.)

 PRESENTATION OUTLINES
1.BACKGROUND OF THE STUDY
2.PROBLEM STATEMENT
3.RESEARCH QUESTIONS & HYPOTHESES
4.OBJECTIVES OF THE STUDY
5.SCOPE OF THE STUDY
6.SIGNIFICANCE OF THE STUDY
7.CONCEPTUAL FRAMEWORK OF THE
STUDY
8. RESEARCH DESIGN & METHODOLOGY
9.RESULTS AND DISCUSSIONS
10.CONCLUSION AND RECOMMENDATIONS
11.LIMITATIONS
11/09/2021 AND SUGGESTION FOR3
BACKGROUND OF THE STUDY
One of the most significant changes in the paradigm of modern business
management is that Marketing is no longer just about developing selling and
delivering products. It is increasingly more concerned with the development and
maintenance of mutually satisfying long-term relationships with customers. It is
also true for EEU because it is obvious that Ethiopia is now building many power
generating Dams, like GERD Dam with 6500 and Coisha Dam with 2100 Mega watt
energy annually they generate. This projects are developed by own capacity
without any external sources of funds.
Therefore, In order to get money and to be profitable, Even Ethiopian Electric Utility
Company is government owned or monopoly holed market, customer relationship
and customer satisfaction has a great place because without customers and
customer relationship the company has no choice to generate money that
supports or used to build these projects and achieve its objectives..
Previous researches evidenced that Customer Relationship Management (CRM)
practices had significant effect on Customer Satisfaction
Therefore, it can be concluded that Customer Relationship Management (CRM) is one
of the most important tools that companies use to build a long lasting relationship
with their customers as it is a source of competitive advantage and retain them to
develop their performances.
Given this, the purpose of the study was to examine effect of customer relationship
management practices on Customer Satisfaction with reference of Ethiopian Electric 4Utility
operating in Adama city.
 PROBLEM STATEMENT
Despite CRM importance for EEU, to achieve the research
purpose the researcher was reviewed global and local
researches and found that:
 Most of literatures were written in the context of developed countries
which is little or limited local publications in the study area (CRM and
Customer Satisfaction) more specifically EEU operating in Adama city.
 And also previous literatures found different and ambiguous results
that can be attributed to disagreement and confusion regarding the
exact domain of CRM.
 Therefore, this gives the reason for the study was conducted to help
bridge the existing literature gap.
 In addition from the reviewed literatures the researcher identified
Seven CRM practices which were not used collectively by previous
researchers and set research objectives and hypothesis.

11/09/2021 5
RESEARCH QUESTIONS &
OBJECTIVES
RESEARCH QUESTIONS
The following research questions are answered in the study:
1) What are the existing Customer Relationship Management practices in
EEU?
2) What is the relationship between Customer Relationship Management
practices and Customer Satisfaction of EEU?
3) What are effects of Customer Relationship Management practices on
Customer Satisfaction of EEU?
RESEARCH OBJECTIVES
GENERAL OBJECTIVE
The general objective the study was to examine effect of customer
relationship management practices on Customer Satisfaction of EEU,
Adama city branches.
SPECIFIC OBJECTIVES
 To determine existing Customer Relationship Management practices
of EEU.
 To examine the relationship between Customer Relationship
6
Management practices
11/09/2021
and Customer Satisfaction.
 SCOPE & SIGNIFICANCE OF THE STUDY
SCOPE OF THE STUDY
CRM encompasses vast areas of managerial practices. However, it is difficult and unmanageable
to conduct the study in all areas that summarizes CRM in terms of time, finance, and research
manageability. Therefore, the scope of the study WERE delimited to
Conceptual scope
effect of CRM practices (customer orientation, customer trust, commitment, communication,
conflict handling, empathy and responsiveness) on Customer Satisfaction of EEU.
Geographical scope
3 district branches of EEU operating in Adama city (EEU has total 3 district branches in Adama
city)
Subject scope
key customers of EEU were subject of the study
SIGNIFICANCE OF THE STUDY
 The study had significant importance in strengthening the existing knowledge and understanding of
CRM practices and Customer Satisfaction by examining and empirically testing the relationship
between CRM and Customer Satisfaction for the case of EEU Adama district branches.
 The study will also provide some insight or recommendations to EEU to evaluate and improve their
CRM practice based on the study findings.
 Finally, the study can serve as an additional reference to others researchers who are interested in the
area of CRM and Customer Satisfaction .
11/09/2021 7
 CONCEPTUAL FRAMEWORK OF THE STUDY &
8
RESEARCH HYPOTHESES
RESEARCH CONCEPTUAL FRAMEWORK
The HYPOTHESES
following hypotheses were formulated Independent Variables
based on the literature reviewed with the aim
of achieving objective of the study and tested
to confirm the theory. For this study Seven Customer Relationship Management
customer relationship practices i.e. customer Practices Dependent Variable
orientation, customer trust, commitment,
communication, conflict handling, empathy Customer Orientation
and responsiveness were used as independent Customer Trust
variables and Customer Satisfaction as
dependent variables.
H1: Customer Orientation has significant & Commitment
positive effect on Customer Satisfaction of
Customer
Ethiopian Electric Utility Company
Communication Satisfaction
H2: Customer Trust has significant & positive effect
on Customer Satisfaction of Ethiopian Electric Empathy
Utility Company. Conflict Handling
H3: Commitment has significant & positive effect on
Customer Satisfaction of Ethiopian Electric Utility
Company.
Responsiveness
H4: Communication has significant & positive effect
on Customer Satisfaction of Ethiopian Electric
Utility Company
H5: Conflict Handling has significant & positive Accordingly as you see on the slides and the
effect on Customer Satisfaction of Ethiopian Electric
Utility Company ank
H6: Empathy has significant & positive effect on research paper, the research title, objectives
Customer Satisfaction of Ethiopian Electric Utility
Company and conceptual frame work of the study
H7: Responsiveness has significant & positive effect
on Customer Satisfaction of Ethiopian Electric are consistent as the theory says they must
Utility Company
be consistent.
RESEARCH DESIGN & METHODOLOGY
Research Approach
Research Design
Source and Type Data
Target Population
Quantitative Research Approach: through structured
questionnaires with closed Likert type statement because it help
to measure instruments with numbered data using statistical
procedures
The study used descriptive and explanatory research
designs Data : The study used primary source of data through
Secondary
questionnaire which was sourced from primary means i.e. from
customers of EEU
Sample Design

312 Key customers of EEU

The researcher used Yemane (1967) formula to determine the
sample size when populations are infinite for the study based on a
Sampling Techniques
95% desired confidence level and a 5% desired level of precision .
Accordingly, 175 were considered as sample size of the study
Probability Sampling techniques Data Collection Tools
particularly Stratified Simple Random
sampling techniques Questionnaires with closed Likert type
Method of Data Analysis statement were used as data gathering
tools
The Collected data was analyzed using descriptive statistics, correlation and regression Analysis .
And also diagnostics tests of Regression assumptions including Multicollinearity,
Heteroscedasticity and normality tests were conducted to ensure safe application of multiple
regression models.
 TEST OF RELIABILITY & VALIDITY
Test of Validity

Validity is the most critical criterion and indicates the degree to which an instrument
measures what it is supposed to measure. Malhotra (2010) mentioned about three
types of validity in his study: content validity, predictive validity, and construct
validity. This study addressed content validity through the review of literature
and adapting instruments used in previous research.
Test of Reliability
As multiple items in all constructs were used, the internal consistency/reliabilities of CRM
Practices and Customer Satisfactionwere assessed using pilot test data of 14 respondents with
Cronbachs Alpha and the reliability values for all constructs are confirmed as greater than 0.7,
which are considered ideal (Pallant 2005). the results of reliability is presented on the following
table Construct Variables Cronbach’s Alpha Result Number of items
Customer Orientation .844 7
Customer Relationship Customer Trust .681 6
Management Practices
Commitment .744 7
Communication .850 8
Conflict Handling .903 6
Empathy .808 5
Responsiveness .958 5
Customer Satisfaction .899 11
Total 55
As it can be seen from the table, all values of the Cronbach’s alpha for CRM practices and Customer
Satisfaction show greater than 0.7. Therefore, it can be concluded that the data collection instruments were
acceptable as reliable.
 DATA PRESENTATION, ANALYSIS AND
DISCUSSION
D e s c r i p t i v e A n a l y s i s o n I n d e p e n d e n t Va r i a b l e s a n d
Dependant variables
The research questionnaire designed using 5 point Likert scale to collect appropriate responses, in relation to
this the respondents indicated the extent they were agreed with the statements by choosing: 5-Strongly
Agree, 4-Agree, 3-Neutral, 2-Disagree and 1-Strongly Disagree. To indicate the performance level the
researcher developed the base value taking the middle (average) value between two scores. Accordingly, A
mean (M) score of 0- 1.50 means that the respondents response for the question indicate poor performance,
between 1.51 to 2.50 means low performance, 2.51 to 3.50 indicate average, 3.51-4.50 indicate above average
(good performance) and a mean above 4.51 indicate High performance. Based on the response of the
respondents Mean computed most of the respondents were agreed on CRM Practices and Customer
Satisfaction of EEU is Good with the mean value of greater than 3.5 Except practices collected in the following table
Customer Relationship Management Practices
From EEU:- N Mean Std. Deviation
CO makes an effort to find out what the customer needs are &accordingly provide 154 3.36 .509
CO R\ships with customers are managed effectively & supported by top management. 154 3.21 .568
CT The overall technical performance of technicians of the CSC in terms of giving quality
services are believable (satisfying) 154 3.22 .461

CT facility provides an environment that is free from danger, risk, or doubt that the
customer trusts. 154 3.33 .512

CMT Commits time and resources to meet customer relationships management goals. 154 2.99 .313
CMT Ethiopian Electric Utility makes adjustments to meet customers’ needs 154 2.78 .639
COM provides accurate and reliable information for its customers 154 3.28 .505
EM All customers are sincerely entertained by the EEU employees. 154 2.71 .664
RP Is consistent in providing quality service. 154 2.96 .694
Therefore, in order to improve overall performance EEU has to improve those
practices which have lower than the middle value of the mean 3.5.
 Inferential Statistics for CRM Practices and CS
The collected data from the customers of EEU were used to make the inferential analysis of the study.
Accordingly, the correlation results, regression Assumptions and regression Analysis results are
presented and discussed in the following sections els.
Table 4.9 Correlation matrix between constructs of CRMP practices and CS

C
CO CT CMT COM CH EM RP S
CO Pearson Correlation 1
Sig. (2-tailed)
CT Pearson Correlation .325** 1
Sig. (2-tailed) .000
CMT Pearson Correlation .315** .249** 1
Sig. (2-tailed) .000 .002
COM Pearson Correlation .316** .286** .410** 1
Sig. (2-tailed) .000 .000 .000
CH Pearson Correlation .481** .519** .448** .424** 1
Sig. (2-tailed) .000 .000 .000 .000
EM Pearson Correlation .283** .345** .477** .300** .399** 1
Sig. (2-tailed) .000 .000 .000 .000 .000
RP Pearson Correlation .229** .301** .386** .329** .356** .415** 1
Sig. (2-tailed) .004 .000 .000 .000 .000 .000
CS Pearson Correlation .506** .500** .549** .546** .599** .544** .534** 1
Sig. (2-tailed) .000 .000 .000 .000 .000 .000 .000
**. Correlation is significant at the 0.01 level (2-tailed).  
b. Listwise N=154  
The correlation table revealed that there was a positive significant relationship between Customer
Relationship Management Dimensions (Customer Orientation, Customer Trust, Commitment,
Communication, Conflict Handling, Empathy, Responsiveness) and Customer Satisfaction with (0.506 ** **,

p<0.001) (0.500** **p<0.001), (0.549**

**,p<0.001), (0.546 ** **,p<0.001), (0.599**
**,p<0.001), (0.544**
**,p<0.001),

(0.534**
**,p<0.001) respectively. This implies that the seven independent variables have the potential to
influence Customer Satisfaction of Ethiopian Electric Utility.
 Diagnostic Tests of the Regression Model
Before directly proceeding to regression analysis (to analyze the data collected for this study), all
necessary assumptions of Regression were checked. 4 assumptions were conducted to ensure safe
application of multiple linear regression models.
Assumption One: Sample Size
The first assumption required is that As it is cited Field (2009), Green (1991)If you want to test the model overall, then he recommends a minimum
sample size of 50 + 8k, where k is the number of predictors. So, with six predictors, you’d need a sample size of 50 + 48 = 98. Therefore, since the
samples for this survey is 154 that means it provide enough case for the survey in predicting both the model overall or individual predictors in
the model.
Assumption Two: Multi-co linearity Test
This assumption can be assessed by examining tolerance and the variance inflation factor (VIF). VIF values well below 10 and the tolerance
statistics well above 0.2 can safely to conclude that there is no co linearity within the data (Field, 2009). The result in table 4.12 shows that the co
linearity between independent variables had no series problem since the value of tolerance for all independent variable is greater than 0.2 and
all VIF is less than ten (VIF<10) (Pallant 2005). From the above table hence, we can conclude that there is no co linearity between the data of
the study.
Assumption Three: Homoscedasticity vs Heteroscedasticity Tests (variance of the errors are constant)
According to the statistical solution (2017), to test the linear relationship assumption, Intellect’s in the statistics plot the standardized residuals verses
the predicted Y' values can show whether points are equally distributed across all values of the independent variables or not. Biased standard errors
lead to biased inference, so results of hypothesis tests are possibly wrong. For a basic analysis, we first plot *ZRESID (Y-axis) against *ZPRED (X-
axis) on SPSS because this plot is useful to determine whether the assumptions of random errors and Homoscedasticity have been met (Field, 2009).
As can be seen in the scattered plot on fig 4.4 above, the residuals at each level of explanatory variables look like they are evenly dispersed and
that the graph do not assume any type of shaped. Therefore, it is safe to say that this study has no Heteroscedasticity problem..
Assumption Four: Normality Test
According to statistics solution (2017), in multiple linear regression analysis requires that the error between observed and predicted values (i.e., the
residuals of the regression) should be that the residuals have a sound normal distribution because the plotted residuals were around the diagonal
straight normally distributed. This assumption can best be checked by plotting residual values on a histogram with a fitted normal curve or by
reviewing a Q-Q-Plot. Figure 4.5 show that the residuals have a sound normal distribution because the plotted residuals were around the
diagonal straight line instead of making any other shape or curve
 Result of Regression Analysis
Regression Analysis: Multiple regression analysis employed
to test the relationship among independent
variables and dependent variable and to
know how much the independent variable
explains the dependent variable.
Model summer:
The coefficient of determination (R square)was found to be 0.646
indicating that customer relationship management practices account
for 64.6% of the variability in Customer Satisfaction. This suggests that
35.4% of the variation is not explained by customer relationship
management practices.
ANOVA results of the multiple regression analysis:
The significance value of 0.000 indicates that the
regression relationship is significant in predicting the effect
of the seven constructs of the independent variables on
Customer Satisfaction.
 Result of Regression Analysis
Coefficients of Regression Analysis:
based on the research objective which of the predictors’ (constructs) has contributed significantly
to our understanding of Customer Satisfaction exploring beta (β) value and its level of significance.

Regression Coefficients between CRMPs and MP

Unstandardized Coefficients Standardized Coefficients

Model B Std. Error Beta t Sig.
1 (Constant) .184 .235 .785 .434
Customer Orientation .183 .057 .184 3.216 .002
Customer Trust .145 .056 .155 2.613 .010
Commitment .117 .049 .149 2.405 .017
Communication .144 .040 .208 3.617 .000
Conflict Handling .090 .044 .137 2.029 .044
Empathy .128 .046 .168 2.782 .006
Responsiveness .196 .056 .201 3.512 .001
a. Dependent Variable: CS

Based on the research model developed in chapter two the mathematical relationship
between CRM Dimensions and Customer Satisfaction was expressed in the multiple
regression equation as:
Y = X0 +X1 (CO) + X2 (CT) + X3(CMT) +X4 (COM) +X5(CH) + X6(EM) + X7(RP) +e
In accordance with this mathematical model the constructed hypothesizes were tested
by considering significance level of each constant parameter and Regression
Coefficients in multiple regression analysis.
 Hypotheses Testing
As it is indicated on the table above, based on the finding of this study, all Customer Relationship
Management constructs i.e. Customer Orientation, Customer Trust, Commitment, Communication, Empathy,
Conflict Handling and Responsiveness Practices had significant and positive influence on Customer
Satisfaction of EEU. since all predictors significance level is less than 0.05. This in turn indicated that, by
improving Customer Relationship Management practices, Customer Satisfaction of the EEU could be
significantly and positively improved.
Therefore, the hypothesis which were stated as
 Customer Orientation (CO) Practices had significant & positive effect on Customer Satisfaction of
EEU & was possible to be accepted by the researcher in the study.
 Customer Trust (CT) Practices had significant & positive effect on Customer Satisfaction of EEU &
was possible to be accepted by the researcher in the study.
 Commitment(CMT) Practices had significant & positive effect on Customer Satisfaction of EEU & was
possible to be accepted by the researcher in the study.
 Communication(COM) Practices had significant & positive effect on Customer Satisfaction of EEU &
was possible to be accepted by the researcher in the study.
 Conflict Handling(CH) Practices had significant & positive effect on Customer Satisfaction of EEU &
was possible to be accepted by the researcher in the study.
 Empathy (EM) Practices had significant & positive effect on Customer Satisfaction of EEU & was
possible to be accepted by the researcher in the study.
 Responsiveness (RP) Practices had significant & positive effect on Customer Satisfaction of EEU &
was possible to be accepted by the researcher in the study
This finding is in line with the findings of Alemu Muleta Kebed & Zewdu Lake Tegegne (2018),
who found that a positive relationship between CRM organization and performance as the
customer satisfaction is the key indicator to performance. And This study is supported by
Seyyedeh et al. (2011) who found that a positive relationship between trust, commitment,
communication, conflict management and competence as independent variable and customer
loyalty as dependent variable. And also consistence with the finding of Khabiri (2014) who
examined and found that four variables namely trust, commitment, communication, and
competence had a significant effect. Sivadas and Dwyer (2000) identified trust as one of the key
SUMMARY OF MAJOR FINDINGS, CONCLUSION
AND RECOMMENDATION
Summary of Major Findings
Customer Orientation Practices and Customer Satisfaction were positively and significantly related. CO has
β=18.4% contribution on Customer Satisfaction at tolerance level t= 3.216 and significance level at p=0.002.
Customer Trust had strong, significant and positive influences on Customer Satisfaction at β =15.5%,
t=2.613 and significance level p=0.010 which is less than the limit 0.05.
Commitment Practices had strong significant and positive influences on Customer Satisfaction at β =14.9%,
t =2.405 and significance level p=0.017 which is less than the limit 0.05.
Communication Practices and Customer Satisfaction positively and significantly related. Communication
Practices had a positive effect and 20.8% contribution on Customer Satisfaction at t =3.617 and significant
level p= 0.000.
Conflict Handling Practice and Customer Satisfaction are positively and significantly related. Conflict
Handling Practice had 13.7% contribution on Customer Satisfaction at t = 2.029 and significance level
p=0.044.
Empathy and Customer Satisfaction are positively and significantly related. Empathy had 16.8%
contribution on Customer Satisfaction at t = 2.782 and significance level p=0.006.
Responsiveness Practice and Customer Satisfaction are positively and significantly related. Responsiveness
had 20.1% contribution on Customer Satisfaction at t = 3.521 and significance level p=0.001
Conclusions
From Regression Analysis between CRM Practices and Customer Satisfaction from Seven constructs of
Customer Relationship Management practices All variables (CO, CT, CMT, COM, CH, EM and RP) had strong
and significant influence on Customer Satisfaction Ethiopian Electric Utility Company.
The coefficient of determination (R square) was found to be 0.646 indicating that CRM practices account for
64.6% of the variability in Customer Satisfaction. And The test of overall significance of all the seven
variables jointly significant at 0.000 levels which found out that the model used for this study is also to be
valid.
SUMMARY OF MAJOR FINDINGS, CONCLUSION
AND RECOMMENDATION
Recommendation
Based on the study results and conclusions drawn above, some recommendations
are proposed as a means of alleviating the problems found.
The result of the study as clearly indicates that CRM practices (Customer Orientation,
Customer Trust, Commitment, Communication, Conflict Handling, Empathy and
Responsiveness) have significant effect on the company’s customer satisfaction. Therefore the
company should have to give due attention in properly implementing for those CRM practices to
improve overall their performance and retain potential customer in their business architecture.
One area that needs attention from management is in the area of complaints handling. The data
received from the field showed that customers have in one way or the other felt dissatisfied
complained about the service or product the Ethiopian Electric Utility has in offer. Customers of
EEU Company have the general feeling that when complaints are made, the Company does not
put in enough effort to resolving them. Therefore, in order to maintain a good relationship that
benefit the company and customers the company should give due attention and work on its
customers compliant on time.
There is need to concentrate more on customer focused services, complaint management,
friendliness of employees, responsiveness, communication, high quality service delivery, and
other CRM variables of the study as findings have shown that commitment to the use of these
variables lead to increase in profit and competitive advantage through satisfying customers.
Finally the study recommends that Ethiopian Electric Utility Company should frequently
monitor and evaluate the current CRM practices. It is essential to regularly monitor, analyze and
assess the existing CRM practices so as to tell if they are effective.
And also In order to achieve advancement in marketing and financial performance in the long
run through enhancing organizational performance, it is better for the organization to give due
 Limitation and Suggestion for Future Research

 While these results are valuable, the limitation of this study must also
be considered. Potential limitations of this research are not considering
or conducting other performance measures, only taking customer
satisfaction as the performance measures, and not considering the
other contextual factors i.e. type of industry. Based on this, the
researcher suggests some researches that the academics and the
researchers can conduct in the future, studying the scope of the effect
of CRM on the general performance of the EEU Company and other
industries including other dimensions of performance measures are
recommended for generalizing the findings
 !!!
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